Nevin's Data "Points"

Last week, the LA Times ran a three-part series on 401(k) fees. The headline, “Fees Eat Away at Employees' 401(k) Nest Eggs,” didn’t seem to be a harbinger of real news. I figured it was just another one of those moments of journalistic “awakening” to things those of us in this business are already well aware of. But as I skimmed the story, I realized that this was not just a story about outrageous 401(k) fees per se. While acknowledging that “Mutual fund management fees are the biggest expense,” the authors gave them a quick pass, noting that they are “prominently disclosed, have attracted wide publicity, and have been declining as fund providers compete for customers.” Well, they surely are the largest expense, they have been attracting publicity, and they surely are disclosed (“prominently” is another matter, IMHO). As for fees declining, well personally, I don’t see much evidence that most are, but that’s a point for another column. So, if those mutual fund fees that are t...

For several years now, the Employee Benefit Research Institute (EBRI) has been publishing its Retirement Confidence Index. This year, as in years past, the index painted a relatively rosy picture from the standpoint of workers – with sizeable minorities and/or majorities feeling pretty good about their retirement living prospects despite having no real idea how much they were going to need, alongside an optimistic sense of how long they would live in retirement, and how much of their pre-retirement income they would need to live on. A sizeable minority also appears to be counting on receiving a pension to supplement those needs – and they also seem to be counting on the help of employer-provided retiree health-care insurance, though both are in increasingly short supply these days. In fact, based on its findings, one is tempted to retitle it the Retirement Over-Confidence Index. What’s interesting to me, however, is not the respondents’ blithe assumptions about their prospects for a...

Apparently, the nation’s savings problem is even worse than we think: Not only are we not saving enough, we’re spending more than we make. The Commerce Department's Bureau of Economic Analysis monthly report of the National Income and Product Accounts (NIPA) personal savings rate was a negative 0.5% recently. In fact, media coverage of the report noted that, in the course of 2005, Americans spent more than they earned for the first time since the Great Depression. As it is currently defined, NIPA’s definition of personal saving is simply the difference between personal disposable income and personal spending. Personal income includes wages, asset income (dividends and interest), rental income, and supplements to wages, including those pension and 401(k) contributions. And yes, it counts those pension contributions made by employers to traditional defined benefit plans as though they were individual income – but not the subsequent gains (or losses) they might incur. NIPA’s exclu...

I had just wrapped up last week’s column when I got a call from my sister. My father, who had been battling cancer for several years now, had suffered a series of heart attacks. By the end of the day, he had passed. As the family converged, my siblings and I tried as best as we could, together with Mom, to deal with the tasks that required our attention, and divvied up the ones that seemed to call out for individual attention. Having spent my entire professional career in financial services, and having picked up a law degree along the way, my “job” was to organize the will and assets. My parents each chose careers of service to others; Dad as a minister, and then a director of missions where he helped other ministers until his “official” retirement several years ago (far as I could tell, Dad’s only retirement was from the receipt of a regular paycheck), while Mom was a school teacher – a teacher who took a fairly significant “sabbatical” so that she could stay at home with her four ...

I know it isn’t for everyone, but the NCAA tournament (and, without meaning to give offense to to those who are adherents of other college sports, the Division 1 men’s basketball tournament has to be considered THE NCAA tournament) has always found a way to creep into the workplace. Not just the ubiquitous grid sheets, but even – in pre-Internet days – with folks importing tiny black and white TVs, or listening to the games on those little transistor radios. It’s much easier to stay up-to-date these days, of course (unless your workplace blocks access to such things). Ultimately, the “magic” of the contest lies in the basic premise that on any night any team can beat any team in the nation – and you need look no further than George Mason University’s toppling of UConn last week to see that principle in action. The tournament itself is a marvel of design, IMHO (for those who are interested in how this process works, it is outlined at http://www.ncaasports.com/basketball/mens/story/91...