A news release said Hickey will be responsible for working with
consultants, recordkeepers and plan sponsors to increase the adoption of
Schwab’s retirement investment products in defined contribution plans.
Hickey will be based in Boston.
Hickey joins Schwab from Old Mutual Asset Management where he
was a Vice President responsible for distribution of investment products
including mutual funds, SMA’s and alternative investments to
consultants, plan sponsors and retirement platforms as well as the RIA
market.
Prior to Old Mutual Asset Management, Hickey spent 15 years at
Fidelity Investments where he was responsible for sales and relationship
management coverage providing custody, investment and product solutions
to fee-based registered investment advisers, bank trust, family offices
and third party retirement plan administrators.
Long-term 401(k) participants took a big hit to their accounts in
2008 but otherwise enjoyed an average 31.9%-advance in 2009, according
to a new study.
The Employee Benefit Research Institute (EBRI) and the Investment
Company Institute (ICI) said in a news release that that was one result of
their joint study of a database on 20.7 million 401(k) participants,
including 4.3 million who maintained their accounts with the same plan
from year-end 2003 through year-end 2009.
The 2009 showing was consistent with the pattern of steady
account balance increases from 2003 to 2007 and only interrupted by the
2008 performance driven by the market downturn when the long-term 401(k)
investors saw an average 27.8% decline.
“Looking at consistent participants provides insights into the
powerful impact of ongoing participation in 401(k) plans,” said Sarah
Holden, ICI senior director of retirement and investor research, in the
news release. “Retirement savers, by continuing to invest
paycheck-by-paycheck, saw the benefits of being in the market in 2009,
as stock values generally climbed during the year.”
The average 401(k) account showed an average annual growth rate
of 10.5%, reaching $109,723 at year-end 2009 – up from $61,106 at
year-end 2003, according to the study. The changes in 401(k) participant
account balances reflect ongoing worker contributions, employer
contributions, investment gains and losses, and loan or withdrawal
activity, which also impact the 31.9% increase in the average account
balance in 2009. By way of comparison, in 2009, the Standard &
Poor’s 500 stock index rose 26.5%, while the Russell 2000 index rose
27.2%. The Barclays Capital U.S. Aggregate Bond Index rose by about
5.9%.
Examining the entire 20 million plus participant database, the
study found that at year-end 2009, 21% of 401(k) participants in plans
offering loans had loans outstanding—up from 18% at both year-end 2008
and year-end 2007. At year-end 2009, 89% of 401(k) participants were in
plans offering loans.
(Cont...)
Diversified Accounts
The
full database analysis also showed that 401(k) participants continued
to seek diversification of their investments. The share of 401(k)
accounts invested in company stock continued to shrink, falling by half
of a percentage point to 9.2% in 2009, according to a news release. That
continued a steady decline that started in 1999. Recently hired 401(k)
participants contributed to this trend: they generally were less likely
to hold employer stock.
The analysis found that the bulk of 401(k)
assets continued to be invested in equities. On average, at year-end
2009, 60% of 401(k) participants’ assets were invested in equity
securities through equity funds, the equity portion of balanced funds,
and company stock. Thirty-six percent were in fixed-income securities
such as stable value investments and bond and money funds. In 2009, more
than three-quarters of 401(k) plans included target-date funds in their
investment lineup.
At year-end 2009, nearly 10% of the assets in
the database were invested in target-date funds and 33% of 401(k)
participants held target-date funds.
“401(k) participants
continued to embrace target-date fund investing in 2009,” said Jack
VanDerhei, EBRI director of research, in the news release. “Although
target-date funds represent only one-tenth of 401(k) assets, the data
highlight the significant role that they play in individual
participants’ accounts, particularly recently hired and younger
employees who are increasingly using target-date funds to save for
retirement.”
According to the analysis, 401(k) investors tended to
be more likely to hold balanced or target date funds compared with
earlier time periods. For example, at year-end 2009, about 42% of the
account balances of recently-hired participants in their 20s was
invested in balanced funds, compared with 36% in 2008 and about 7% in
1998. At year-end 2009, 31% of the account balances of recently hired
participants in their 20s was invested in target-date funds, compared
with almost 23% at year-end 2008.