Products October 11, 2016

John Hancock Expands Open Architecture Platform for TPAs

John Hancock Retirement Plan Services aims to help plan consultants expand their business by shifting focus to TPAs.
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John Hancock Retirement Plan Services has made its mid-market, open architecture platform available for third-party administrators (TPAs).

“John Hancock has partnered with plan consultants for decades, and we understand the important role they play in providing their small-business clients with local, high-touch service,” says Patrick Murphy, president of John Hancock Retirement Plan Services. “With access to our open architecture platform, plan consultants will be able to continue working with their larger clients, bringing their local expertise and insight up market as their clients grow.”

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“Not only will this move serve pent-up demand among plan sponsors and advisers alike, it will help plan consultants grow their business,” says Ann Slotwinski, assistant vice president of Plan Consultant Relations. “John Hancock’s retirement plan business was founded with the TPA service model and we want plan consultants to know we remain committed to their marketplace.”

John Hancock offers a variety of services to professionals in the retirement plan industry including plan design, plan review tools, compliance reporting and participant research.

Data & Research October 11, 2016

Nearly Three-Quarters of Retirees Experience a Financial Shock

For one in three retirees, it depletes their savings by 25%.
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Nearly three-quarters, 72%, of retirees experience at least one financial shock, and for one third of them, it depletes their savings by 25%, according to the Society of Actuaries’ (SOA) 2015 Risks and Processes of Retirement Survey.

Pre-retirees expect to live to age 85, but the latest SOA mortality data finds that a 65-year-old male will live to age 86.6, while a 65-year-old female will reach age 88.8. Nonetheless, 55% of pre-retirees and retirees do not expect to live that long.

Sixty percent of pre-retirees expect their spending to decline as they age in retirement. This is consistent with what retirees experience, according to SOA. Only 38% of retirees said expenses in retirement were higher than they expected.

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To reduce costs in retirement, 90% of retirees are spending less on purchases, 70% are dining out less frequently, 56% are traveling less, 44% are cutting back on gifts and charitable giving, 17% moved to less expensive housing, and 11% refinanced their mortgage.

Twenty percent of pre-retirees and 30% of retirees said that if an emergency were to arise, they could spend up to $25,000 without jeopardizing their retirement security. However, 20% of both groups said they could only spend less than $1,000 on an emergency without putting a serious dent in their savings.

Fifty-six percent of pre-retirees said that the debt they carry has either somewhat or greatly limited the amount they can save for retirement. By contrast, 56% of retirees said their debt has little or no impact on their lifestyle.

The survey also found that pre-retirees are more worried about expenses than retirees. Sixty-nine percent are worried about paying for long-term care, compared with 52% of retirees. Other concerns include: health care costs (67% versus 47%), maintaining a reasonable standard of living (63% versus 45%), running out of savings (62% versus 43%) and inflation (76% versus 66%).

Half of both pre-retirees and retirees have not consulted with a financial adviser. Only 15% of pre-retirees and 20% of retirees consult with an adviser at least once a year.

“The developing situation with regard to retirement resources, such as Baby Boomers entering retirement ages and the decline in defined benefit (DB) plans, means that many older Americans will be faced with difficult spending and debt management challenges,” says Carol Bogosian, a member of the SOA’s Committee on Post-Retirement Needs and Risks. “The actuarial profession in particular will be called on to revisit strategies and help systems adapt, as will other specialties that focus on the lives and issues of American pre-retirees and retirees.”

Matthew Greenwald & Associates conducted the online survey for SOA, reaching 2,000 Americans between the ages of 45 and 80, half of whom were pre-retirees and half of whom were retired. In addition, SOA conducted 12 focus groups and 15 interviews. The full report can be downloaded here.

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