Products October 21, 2010

Web Site Helps Employers Choose Best Retirement Plan

The U.S. Department of Labor (DoL) and the American Institute of Certified Public Accountants (AICPA) have launched a Web site to help small businesses select a retirement plan suitable for their employees.
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The Web site, “Choosing A Retirement Solution for Your Small Business,” was jointly developed and is co-sponsored by the Labor Department’s Employee Benefits Security Administration (EBSA) and the AICPA.

The site introduces employers to a number of retirement plan options from a simpler individual retirement account-based plan to the more sophisticated automatic enrollment 401(k) program.  It describes the advantages and features of various retirement plans. 

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“Having the right plan will give small business owners a way to save for their own retirement while also helping their employees achieve a more secure retirement,” said EBSA Assistant Secretary Phyllis C. Borzi, in a news release.

The site is at http://www.choosingaretirementsolution.org/.

Data & Research October 21, 2010

DC Plan Loan and Withdrawal Activity Edged Higher in 2010

A report from the Investment Company Institute shows that in the first half of 2010, defined contribution plan participants’ loan and withdrawal activity rose slightly compared with the same time period a year earlier.
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The research looked at nearly 24 million defined contribution retirement accounts Nevertheless, participants’ commitment to 401(k) and similar plans continued, as evidenced by stronger contribution activity and lower levels of participant-initiated changes in asset allocations, ICI said in a press release.  

The data showed that as of June 2010, 17.5% of DC plan participants had loans outstanding, compared with 16.5% with loans outstanding at year-end 2009. Only 2.1% of DC plan participants took withdrawals in the first half of 2010, compared with 1.8% in the first half of 2009. The share of workers taking hardship withdrawals was only 0.9%, the same as in the first half of 2009.  

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Only 1.5% of DC plan participants stopped contributing in the first half of 2010, compared with 4.6% in the same time frame in 2009. Only 6.6% of DC plan participants changed the asset allocation of their account balances; 6.3% changed the asset allocation of their contributions. 

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