Overseeing the retirement practice’s
defined benefit group, Scalise will provide consulting and actuarial services
to clients with defined benefit plans, post-employment benefit programs and
nonqualified plans. He will be based in Cammack LaRhette’s New York office.
Scalise has more than 20 years of
actuarial experience. Most recently, he served as an associate partner at Aon
Hewitt, managing client relationships and actuarial support/valuation teams in
New York and Boston. Scalise has also held positions at Metropolitan Life
Insurance Company and TIAA-CREF.
Scalise received his Bachelor of
Engineering in mechanical engineering from the State University of New York at
Stony Brook. He holds numerous actuarial designations, including Associate of
the Society of Actuaries (ASA), Enrolled Actuary (EA) and Fellow of Conference
and Consulting Actuaries.
Within the next few years, more than half of 401(k)
participants will be entirely invested in a professionally managed investment
option, Vanguard predicts.
According to the report, “How America Saves 2013,” it is
estimated that 55% of all participants will be entirely invested in a
professionally managed investment option by 2017. Vanguard found that in 2012,
36% of all participants in 401(k) retirement plans at Vanguard invested their
plan assets in a professionally managed investment option.
The firm also found 27% of all participants in 2012 were
invested in a single target-date fund (TDF), 6% held a single traditional balanced
fund, and 3% used a managed account advisory program. The total number of
participants invested in a professionally managed allocation has more than
doubled from 17% at the end of 2007.
Furthermore, 14% of participants who were offered an
investment advice service through their plan adopted one. “The number of
participants completely turning their portfolio construction over to a
professional, or obtaining advice from professionals, is an important trend in
the potential future financial security of retirees,” said Jean Young,
co-author of the report. “It represents a shift in responsibility for
investment decisionmaking away from participants—many of whom may be
inexperienced investors—to investment and advice programs that have been vetted
by employers as part of their fiduciary obligations.”
The average plan account balances rose by 10% in 2012, to
$86,212, reflecting the effect of both ongoing contributions and market
returns. For participants with a balance at both the end of 2007 and the end of
2012—the worst five-year period in the markets in most people’s lifetimes—the
median account balance grew by 67% for the same reasons. Nearly 90% of
participants in this group saw their balances rise during this time.
“Some may look solely at plan account balances and
underestimate the retirement readiness of Americans, saying that most of us
still aren’t financially prepared for retirement,” said Steve Utkus, director
of the Vanguard Center for Retirement Research and co-author of the report.
“But when you look at the data comprehensively, the fact remains that many
Americans are doing a good job accumulating private savings to supplement
Social Security in retirement.”
Many participants were found to be strong savers in their
plan. One-fifth of them saved 10% or more, 11% saved the maximum allowed, and
15% of participants older than age 50 made catch-up contributions in 2012.
Taking into account both contributions made by participants and those made by
employers to participants’ accounts, the average total savings rate was 10.5%
in 2012.
However, one-third of participants contributed less than 4%. The average participant deferral rate was 7% in 2012, down slightly
from the peak of 7.3% in 2007. The decline is largely due to the default
contribution rates set by many automatic enrollment plans. Although automatic
enrollment raises plan participation rates and thereby helps to ensure more people
overall save for retirement, the default rates can be set too low (3% or less),
said the report, and pull down the average savings rate.
Vanguard recommends an annual savings rate of 12% to 15%,
depending on income level. “While we are seeing good news overall in the
retirement planning habits of participants, many Americans are still not saving
enough for the future,” Young said. “Simply put, people need to save more and
save more now.”
Other 2012 highlights of the report include:
51% of all participants were invested in one
or more target-date funds;
32% of Vanguard plans had adopted automatic
enrollment, up 3 percentage points from 2011;
More than half of all
contributing participants in 2012 were in plans with automatic enrollment, and seven in 10 such plans had implemented automatic annual deferral-rate
increases;
97% of automatic enrollment plans defaulted their participants
into a balanced investment strategy, with nine in 10 choosing a target-date
fund as the default;
49% of Vanguard
plans adopted Roth 401(k) features, and 11% of participants within these plans had elected the option;
82% of participants held equity index
investments, including index target-date funds;
66% of plan assets were invested in equities, down from 73% in 2007;
Only 12% of plan participants traded within their accounts;
About 30% of all participants could have taken their account
as a distribution because they left their employer by 2012. The
majority of them (82%) preserved their plan assets for retirement by remaining
in their employer’s plan or rolling over their savings to an individual retirement account (IRA) or to a new
employer’s plan.