Products November 9, 2009

Fiduciary Benchmarks Offers 401(k) Fee Benchmarking

Fiduciary Benchmarks, a 401(k) plan benchmarking firm, has compiled the data and reporting necessary to benchmark more than 98% of U.S. 401(k) plans.

Reported by

A news release said Fiduciary Benchmarks began issuing reports to clients during mid-October. The company released its first report, titled “Fees, Plan Complexity and Participant Success Measures.”

Fiduciary Benchmarks is producing reports for all market segments under $100 million, representing about 98% of all 401(k) plans in America. In addition, Fiduciary Benchmarks expects to produce reports for market segments above $100 million within the next 60 days, the company said.

The company has put in place working protocols Fiduciary Benchmarks has developed with 35 recordkeepers to facilitate getting plan data.

“The Fiduciary Benchmarks report contains a level of actionable intelligence that truly helps a fiduciary understand the fees for their plan—in total, by service provider and by investment option,” said Tom Kmak, CEO of Fiduciary Benchmarks. 

More information is available at www.fiduciarybenchmarks.com.

The Markets November 9, 2009

401(k) Investors Exit Bonds, Equity at Same Pace

Retirement plan investors seemed of two minds in October, with asset transfers out of 401(k) plans showing equal numbers favoring equities as fixed income, according to the latest data from the Hewitt 401(k) Index.

Reported by

The directions of transfers were equity-oriented during half of the days in the month, and fixed-income-oriented during the remaining days. In terms of volume, Hewitt reported the October transfer activity was below the 12-month trailing average.

A net $16 million transferred from fixed-income investments into equities in October, which is significantly lower than the average net transfer between equity and fixed-income asset classes ($240 million) so far this year.

Bond funds received the largest inflows during the month, with $132 million moving into this asset class, which represented nearly 40% of the total transfer amount in October. Both lifestyle funds and international funds received $93 million and $90 million in assets, respectively.

Company stock funds had the largest outflows in October. A total of $131 million moved out of these funds during the month. GIC/stable value experienced $109 million transferring out for the month, while money market funds had outflows of $87 million.

Total equity holdings were down slightly to 56.9% at the end of October, from 57.2% at the end of September. The change is largely due to market movement.

On the other hand, participants’ overall equity contributions rose slightly during the month, from 58.6% at the end of September, to 59.3% at the end of October.

In terms of October asset allocation, Hewitt reported that 27.79% was in GIC/Stable Value, 16.68% in Large U.S. Equity, 14.61% in Company Stock, and 10.65 in Lifestyle/Pre-Mix.

Participants put 22.35% of their October contributions into Lifestyle/Pre-Mix, 20.96% into GIC/Stable Value, 16.99% on Large U.S. Equity, and 8.61% in International.

Less than 1% of balances transferred on a net daily basis during the month, compared to the average 0.04% in the past 12 months. Only one day in the month had an above-normal level of transfer activity—when the Dow Jones Industrial Average had the highest return in the month (more than 2% return on October 29), transfer activity was strongly equity-oriented, with 0.09% of balances shifting during the day.

Hewitt’s October 401(k) data is available here.

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