Nevin's Data "Points"

In the course of my day, I talk to (and email with) people, read a lot, and every so often jot down a random thought or insight that gives me pause and makes me think. See what you think. Disclosure isn’t the same thing as clarity. Sometimes it’s the opposite. It’s not what you’re doing wrong; it’s what you’re not doing that’s wrong. Sometimes just saying you’re thinking about doing an RFP can get results. The best way to stay out of court is to avoid situations where participants lose money. The key to successful retirement savings is not how you invest, but how much you save. It’s the match, not the tax preferences, that drives plan participation. Does anybody still expect taxes to be lower in retirement? If you don’t know how much you’re paying, you can’t know if it’s reasonable. You want your provider to be profitable, not go out of business. Retirement income is a challenge to solve, not a product to build. When selecting plan investments, keep in mind the 80-10-10 r...

In about a month, the IRS will announce the new contribution and benefit limits for 2018 – and that could be good news even for those who don’t bump against those thresholds. These are limits that are adjusted for inflation, after all – designed to help retirement savings (and benefits) keep pace with increases in the cost of living. In other words, if today you could only defer on a pre-tax basis that same $7,000 that highly compensated workers were permitted in 1986 – well, let’s just say that you’d lose a lot of purchasing power in retirement. But since industry surveys suggest that “only” about 9%-12% currently contribute to the maximum levels, one might well wonder if raising the current limits matters. Indeed, one of the comments you hear frequently from those who want to do away with the current retirement system is that the tax incentives for 401(k)s are “upside down,” that they go primarily to those at higher income levels, who perhaps don’t need the encouragement to save....

A recent ad campaign focuses on the distinction between identifying a problem and actually doing something about it. In one version  a so-called “dental monitor” tells a concerned patient that he has “one of the worst cavities that I’ve ever seen” before heading out to lunch, leaving that cavity unattended. Another features a “security monitor” who looks like a bank guard, but only notifies people when there is a robbery. As an industry, we have long worried about the plight of the average retirement plan participant, who doesn’t know much (if anything) about investing, who doesn’t have time to deal with issues about their retirement investments, and who, perhaps as a result, would really just prefer that someone else take care of it. What gets less attention — but is just as real a phenomenon — is how many plan sponsors don’t know anything about investments, don’t have time to deal with issues about their retirement plan investments, and who, perhaps as a result, would — y...

In addition to the books, reference guides, and a few personal “knick knacks,” I have for years had in my office a couple of model cars – but not for the reason people generally think. These models happen to be Studebakers (a 1950 Champion, a 1953 Starliner and a 1963 Avanti). I’d wager that a majority of Americans have never even heard of a Studebaker, and the notion that a major U.S. automobile maker once operated out of South Bend, Indiana would likely come as a surprise to most. I keep them in my office not because I have an appreciation for classic cars (though I do), but because of the role the automaker played in ERISA’s formation. Born into a wagon-making family, the Studebaker brothers (there were five of them) went from being blacksmiths in the 1850s to making parts for wagons, to making wheelbarrows (that were in great demand during the 1849 Gold Rush) to building wagons used by the Union Army during the Civil War, before turning to making cars (first electric, then gaso...

Watching the incredible, heart-rending coverage this past weekend of Hurricane Harvey’s devastation, I was reminded of a personal experience with nature’s fury. It was 2011, and we had just deposited our youngest off for his first semester of college, stopped off long enough in Washington, DC to visit our daughters (both in college there at the time), and then sped home up the East Coast with reports of Hurricane Irene’s potential destruction and probable landfall(s) close behind. We arrived home, unloaded in record time, and rushed straight to the local hardware store to stock up for the coming storm. We weren’t the only ones to do so, of course. And what we had most hoped to acquire (a generator) was not to be found – there, or at that moment, apparently anywhere in the state. What made that situation all the more infuriating was that, while the prospect of a hurricane landfall near our Connecticut home was relatively rare, we’d already had one narrow miss with an earlier hurric...