Deals & People July 8, 2010

Senderowitz Joins 401(k) Advisors, Opens Orlando Office

Independent retirement consulting firm 401(k) Advisors has announced the opening of an office in Orlando, Florida, under the leadership of Phillip Senderowitz.
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Senderowitz was formerly Chief Investment Officer at Chepenik Financial, and before that a private financial advisor at SunTrust Bank, and team manager at Charles Schwab. He reports to Paul Powell, Managing Director, 401(k) Advisors for the southeastern region. 

In his new capacity as senior plan consultant for the Florida office, he will drive growth opportunities in the region with new and existing clients. According to the announcement, Senderowitz is a specialist in investment management, financial planning, executive compensation and corporate retirement planning with over a decade of experience in the industry. 

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 “Building a great company takes leading talent. We’re quite pleased Phil has decided to join 401(k) Advisors where he can now express the full strength of his talent,” says Paul Powell, Managing Director, 401(k) Advisors. 

401(k) Advisors specializes in retirement plan consulting for major and mid-sized private and institutional plan sponsors, and currently oversees $10 billion in assets under advisement. Offices are located in the Midwest, Northeast, Southeast, Southcentral and Western regions of the United States.  

More information is available at http://www.401kadvisors.com.          

Data & Research July 8, 2010

Research Shows Retirement Income Adequacy Lacking at Large Firms

A study of 84 large employers from Hewitt Associates finds that employees who contribute to their savings plans over a full career are on track to have retirement resources of 13.3 times pay at retirement age.
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This is 15% short of their need of 15.7 times pay, according to Hewitt’s report. The shortfall grows to 32% when including both employees who contribute and those who do not.  

The study found about 18% of employees are expected to satisfy 100% of their needs at retirement, while about 19% are expected to have a shortfall of more than five times pay at retirement age. The differences are largely attributable to individual factors such as in which plans they participate, savings plan behaviors, and gender, the report says.  

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The average shortfall for employees with access to a defined benefit plan, whether frozen or not, is only 1.4 times pay at retirement age, compared to a shortfall of 4.3 times pay at retirement age for those with access to only a defined contribution plan.  

The study assumes retirees will have access only to group medical plans from their prior employers, without any company-provided subsidy.  If an employer provides a subsidy worth 50% of the plan cost, the percentage of retirement needs met for employees would increase from 85% to 94%, Hewitt found. 

Since females in the study tend to have lower pay and smaller retirement plan account balances, the shortfall for women is higher by 1.3 times pay at retirement. 

Hewitt notes that early retirement (age 62) significantly increases the shortfall for employees and late retirement (age 67) significantly improves retirement income adequacy.  

Not surprisingly, non-contributing employees are projected to have resources totaling only 43% of their retirement income needs.  

The Hewitt report, Retirement Income Adequacy at Large Companies: The Real Deal, is here.

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