Nevin's Data "Points"

Thanksgiving has been called a “uniquely American” holiday, and one on which it seems fitting to reflect on all for which we should be thankful. Here’s my 2014 list: I’m thankful that retirement plan coverage and participation is up, if slightly, and that there seems to be a expanding national dialogue about how to expand that. I’m thankful that a growing number of policy makers are willing to admit that the “deferred” nature of 401(k) tax preferences are, in fact, different from the permanent forbearance of other tax preferences — even if the governmental accountants and academics remain oblivious. I’m thankful that so many employers offer access to a retirement plan in the workplace — and that so many workers, given an opportunity to participate, do. I’m thankful that most workers defaulted into retirement savings programs tend to remain there — and that there are mechanisms in place to help them save and invest better than they might otherwise. I’m thankful that thos...

At a recent conference, our luncheon table got to talking about savings trends and the unique challenges of Millennials, specifically the impact of graduating with so much college debt. While several at the table had graduated with (and since paid off) college debt, the sums paled in comparison to the kinds of figures bandied about in recent headlines — or did, until I loaded up an online calculator that allowed us to see what our college debt at graduation amounted to in today’s dollars. To the collective astonishment of the retirement experts at that table, the totals, adjusted for inflation, were very much in line with the figures reported for today’s graduates. Factoring in those kinds of cost-of-living adjustments is, of course, a crucial aspect of retirement planning. Unlike Social Security, there is no annual cost-of-living “adjustment” for retirement savings—no systematic means by which those accumulated savings are increased to offset the increased costs of things like ...

The Nov. 7 issue of The   New York Times included a story about “ Finding, and Battling, Hidden Costs of 401(k) Plans .” The story focused primarily on the plight of Ronald Tussey, the named plaintiff in Tussey v. ABB, Inc. , one of the so-called “excess fee” revenue sharing cases. Tussey, now 70, claims that he was told that his retirement plan was “free,” even though, according to the Times article, “middlemen 1 were deducting expenses from his savings.” The story also notes that Tussey “never thought that his retirement plan might be flawed,” and that “he trusted his company so much he kept his money in his 401(k) long after he left.” Over the years, I have been astounded at the allegations of fiduciary misconduct in these revenue-sharing cases. Each has its own flavor, of course, but for the most part they have struck me not so much as the outcomes of bad acts, per se, but rather steps that should have been taken in keeping with their fiduciary duty to ensure that t...

Though I’ve now spent more than three decades working with employment-based benefit plans, I’ve also worked for some very different employers, ranging from organizations that employed tens of thousands of workers to those that were a fraction of that size. Those organizations were all very different, of course, but they all had at least one thing in common: All offered a workplace retirement savings program. That’s apparently not as common as one might think, certainly among smaller employers. In fact, a new study from the Employee Benefit Research Institute (EBRI) notes that the probability of a worker participating in an employment-based retirement plan increased significantly along with the size of his or her employer. How significantly? Well, the EBRI report notes that for wage and salary workers ages 21‒64 who worked for employers with fewer than 10 employees, just 13.2% participated in a plan, compared with 57.0% of those working for employers with 1,000 or more employees. ...