Deals & People August 20, 2007

Pentegra to Offer SSgA Target Date Funds to DC Plan Participants

Pentegra Retirement Services will add State Street Global Advisor’s (SSgA) Target Retirement Strategies to its offerings for defined contribution plan participants.
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In a press release, Gwen Burroughs, Chief Marketing Officer, Pentegra Retirement Services, said the SSgA strategies are index-based and therefore carry lower charges than many other target-date strategies. The funds are based on target retirement dates of 2015, 2025, 2035, and 2045.

“Our strategies focus on wealth creation during the working years and income replacement to better manage the transition into retirement. The strategies’ ease-of-use will likely encourage greater plan participation,” said Michael Dalis, director of Institutional Sub-Advisory Service at SSgA, in the release.

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Each fund is a mix of cash, bonds and stocks, the percentage of each based on years to retirement. As the years go by, the funds are rebalanced and become incrementally more conservative.

For more information visit http://www.pentegra.com.

Data & Research August 20, 2007

Employer Provided Financial Advice Welcomed by Workers

Seven out of 10 respondents to a recent poll said they would be moderately or very interested in one-on-one financial planning if offered through their employer and nearly nine in 10 (87%) said a financial planning benefit would make them feel their employer values their efforts.
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Eighty-nine percent of respondents said a financial plan that directly addressed their workplace benefit costs and contingent financial decisions would be helpful, according to an Ameriprise Financial news release.

According to the study, fewer than one in five workers have a written, professionally prepared and paid-for financial plan, and those without a financial plan are more likely to cut back on their saving and investments in company-sponsored plans when confronted with increases in out-of-pocket benefit expenses.

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Of those employees facing one or more benefit cost increases, 54% of those without a financial plan said they would reduce their retirement savings level, compared with 46% of those with a financial plan, the news release said.

The data comes from Ameriprise’s 2007 Ameriprise Workplace Financial Planning Benefit Decisions study, which the announcement said recorded increased stress among U.S. workers in every category measured, with the highest stress factors saving for retirement and paying for health care in retirement.

A significant problem is that workers seem unable to come up with strategies for facing rising out-of-pocket health care costs while maintaining their level of retirement saving. According to the press release, the study found that while 61% of respondents said reducing discretionary spending was a method used for dealing with rising benefit costs, almost half (46%) said they would decrease overall saving and investing.

More than 40% of workers reported an impact on their financial health and stress levels related to increases in their health care insurance costs and 44% said increasing benefit costs will impact their ability to fund retirement and other financial goals.

For the research, a telephone study among 617 consumers was completed. Respondents included those with access to employer sponsored health insurance and enrollment in (or eligibility for) a 401(k) retirement plan through their employer.

A complete survey report can be requested by emailing ameriprisefinancialeducation@ampf.com or calling (800) 437-0600.

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