In this role, Lombardi will be responsible for leading the firm’s DCIO sales team, which covers intermediaries such as financial advisors and consultants, and works with regional salespeople from the retirement platforms where AllianceBernstein funds are included.
“Craig’s experience in sales management and his knowledge of the DC market make him well positioned to bring the distribution of our DC products and services in the intermediary space to the next level,” said Joel R. Stevens II, Senior Managing Director—Americas, AllianceBernstein Institutional Investments, in a press release.
Lombardi is a 20-year veteran of Fidelity Investments Institutional Services, Inc., where he served as national sales manager of the Institutional Insurance Platform Variable Annuity and DC sales teams, among other roles.
“Because the DC business continues to be a priority for the firm, we are bolstering our resources in this area. We continue to experience growth in both our assets under management and the range of products we offer,” says Thomas J. Fontaine, Head of AllianceBernstein Defined Contribution Investments.
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Retirement Savings Tax Break Critical for Lower Income Workers
New findings from the Employee Benefit Research Institute (EBRI)
suggest that lower-income workers are more likely to
reduce their deferral rate if the tax break for contributions to retirement savings plans was lowered or eliminated.
Results from EBRI’s recently released 2011 Retirement Confidence
Survey (RCS) show that more than three quarters of full-time workers
with household income of $15,000 to $25,000 say that having the ability
to deduct their contributions to retirement savings plans is “very
important.” More than half (56%) of full-time workers currently saving
for retirement say they would reduce the amount they save if they were
no longer able to deduct retirement savings plan contributions from
taxable income.
By comparison, only 22% of full-time workers saving
for retirement with household incomes of $100,000 or more say they would
save less if the tax treatment of their retirement savings plan was
reduced or eliminated. The reactions become even graver as saving
amounts grow, EBRI found: 71% of those with less than $1,000 in savings
said they would reduce the amount saved if they were no longer allowed
to deduct their contributions, compared with about 13% of those with
$500,000 or more.
“Our research suggests that that some proposals to modify the
exclusion of employee contributions for retirement savings plans from
taxable income may have unintended consequences,” said Jack VanDerhei,
EBRI research director and author of the report. “Instead of reducing
the contribution levels of those with larger taxable incomes (and hence
higher marginal tax rates), the RCS results indicate that workers with
low levels of household income would be most likely to cut their
contribution—in some cases completely.”
Those found to be most likely to reduce their contributions to
retirement savings plans were individuals who work for small, private
organizations or those with relatively low education levels.
In recent years, EBRI said, proposals have surfaced to reform
the 401(k) system based on the assumption that higher income individuals
receive more tax-related benefits from these programs than do
individuals in lower marginal tax brackets (as well as those who may pay
no federal income taxes in a particular year). Some of these proposals
have included modifications of the current federal income taxation
treatment that excludes some or all of the contributions employees make
to tax-qualified defined contribution plans.
From a strictly financial perspective, VanDerhei said, it is logical
to assume that the lower-income individuals (those most likely to pay no
or low marginal tax rates and therefore have a smaller financial
incentive to deduct retirement savings contributions from taxable
income) would be least likely to rate the exclusion of employee
contributions for retirement savings plans from taxable income as “very
important.” However, the RCS data show that those in the household
income category of $15,000 to $25,000 actually have the largest
percentage of respondents classifying the tax deductibility of
contributions as very important.
The EBRI analysis notes that
determining the overall tax advantage of making before-tax contributions
to a 401(k) plan involves the prediction of several factors, including
amounts and timing of contributions, marginal tax rates during the
accumulation and decumulation periods, rates of return, and withdrawal
behavior during the decumulation period.
Among the report’s other findings:
Of
the full-time workers who are currently saving for retirement who
report that they currently have less than $1,000, 71.3 % indicate they
would reduce the amount saved. This value declines to 38.8 % for those
with savings of $1,000 to less than $10,000.
Approximately 32.2%
of high school graduates indicate they would reduce savings, whereas
only 22.1% of those with a graduate or professional degree have a
similar response.