Data & Research July 31, 2009

Investors Ignore Investments?

A recent Charles Schwab survey found that less than a third (31%) of respondents claimed they speak with their broker or financial adviser on a regular basis.

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The survey also found that just four out of 10 mutual fund investors surveyed (39%) have made changes to their portfolio allocations since the stock market began to decline. Less than half (45%) indicated they have become more knowledgeable about their investments since the financial crisis began roughly two years ago, according to a Schwab press release.

In addition, 36% of respondents indicated they do not know which mutual funds they own.

“When market volatility occurs, it presents a great opportunity for individuals to increase their levels of engagement in how they manage their investments,” said Peter Crawford, senior vice president for investment management service at Charles Schwab.

The Charles Schwab Mutual Fund Survey is based on responses of 602 mutual fund owners age 18 and older, and was conducted by Kelton Research in April.

Compliance July 31, 2009

DoL Extends 403(b) Relief on Form 5500 to Future Plan Years

The Department of Labor (DoL) has said its Form 5500 transition relief for 403(b) plans applies to years beyond the 2009 plan year.

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The relief generally allows 403(b) plans making good faith efforts to comply to avoid the administrative burden and expense of having to collect and include in their 2009 Form 5500 financial report information on certain individual annuity contracts and mutual fund custodial accounts of current and former employees which were entered into before 2009 and for which the employer has no ongoing contribution obligation after 2008. However, as the guidance referred only to the 2009 Form 5500, that left open the question of whether the data would still need to be included in future plan years (see “DoL Provides Form 5500 Reporting Relief for 403(b) Plans“).

However, BNA reports that the department said the relief was never intended to be limited to just one year. The relief applies to future years beyond the 2009 plan year, the DoL told BNA last week.

The agency also told BNA it was not currently considering any changes to Field Assistance Bulletin (FAB) 2009-02.

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