Nevin's Data "Points"

   As Halloween approaches, a leading behavioral science academic has embraced a truly scary idea that involves your 401(k) account. That academic, as you might deduce from the title, is none other than Shlomo Benartzi, professor emeritus at UCLA Anderson School of Management — and more specifically a champion of the application of behavioral finance concepts to retirement plans, notably automatic enrollment and contribution acceleration. As for that scary recommendation, Benartzi has — in a Wall Street Journal op-ed — effectively backed the notion of creating big government-run pools of retirement savings — where ALL retirement savings would be put. “We no longer have jobs for life” he rationalizes, though employment tenure in the private sector has been pretty consistent going all the way back to the 1940s. What HAS changed is the predominance of defined contribution savings plans and — ironically — that system’s increasing reliance on the behavioral science designs that ...

  Last week, I shared   five of my Top 10 Pet Peeves   about the Retirement Industry. Here’s the rest of the list. Making “apples to oranges” comparisons of world pension systems. Let’s face it — nobody wants to be “average.” And yet, there are now a handful of retirement industry consultants that, each year, publish a ranking of how the world’s retirement systems rate — and year after year the United States generally comes in about the middle of the pack. Considering just how diverse these systems and the populations they serve are — one might well wonder at the need to rank them. But rank them they do, employing a relatively complex rating system to do so. The  most recent was by Mercer  — who, once again — held the U.S. in relatively poor esteem compared with the Netherlands, Iceland, Denmark and Israel. The Nordic countries are a perennial favorite here — though they all happen to be (much) smaller in population, and more culturally and racially monolithic t...

   Life is full of annoyances – all the better to appreciate the blessings that surround us. That said, there are things about the retirement industry that really bug me.  I recently had the privilege of being part of the Leafhouse National Retirement Symposium. The theme was unfiltered – the unvarnished truth.  And it seemed an appropriate forum to share some of the things about the retirement industry that really bug me.  Here’s the list: Using the average or median retirement balance as a proxy for retirement readiness. Generally speaking, retirement plans are comprised of a myriad of individual circumstances – participants of ages that run from late teens to beyond traditional retirement, savings behaviors based on income – and age – and company match… Not to mention that this might be only a half dozen years of a worker’s accumulation, with the rest on some other recordkeeping platform… Why any rational person would think that combining those disparate elem...

   The images and stories of the horrific path of destruction left by Hurricane Helene have been both eye-opening and heart-breaking – a tragic reminder of the uncertainty of life. Who would have thought that a hurricane coming off the Gulf would wreak so much havoc in the hills of North Carolina and Tennessee?  But as the recovery from Helene begins – and we now wonder what Milton will do, perhaps to many already struggling. As we sit here and pray for the best while many prepare for the worst, I’m mindful of my last serious brush with nature’s fury. It was 2011, and we had just dropped our youngest off for his first semester of college in North Carolina, stopped off long enough in Washington, DC to check in with our daughters (both in college there at the time), and then sped home up the east coast to our then-home in Connecticut with reports of Hurricane Irene’s potential destruction and probable landfall(s) close behind. We arrived home, unloaded in record time, and r...