Products February 9, 2009

John Hancock Increases Support to Adviser Partners

John Hancock Retirement Plan Services (RPS) has increased its sales support by adding eight regional vice presidents and a new internal sales desk with 10 sales associates.
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The expansion represents growth of 15% in the number of individuals who are supporting advisers selling 401(k) plans, the company said in a press release.

The 10 new internal sales associates will form a new Boston-based sales desk and will primarily support the Eastern Division. The company said it plans to add five additional sales associates to the Boston sales desk by year end and additional sales associates to the company’s other sales desks, located in Chicago and Atlanta, over the same period.

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The eight new regional vice presidents will be located throughout the country.

“With more support, we can better respond to the needs of financial advisers and TPAs – our business partners,” said Art Creel, Executive Vice President, Sales & Marketing, John Hancock RPS, in the announcement.

More information is available at www.jhrps.com/us.

 

Data & Research February 9, 2009

Industry, Salary Level Affect Participation Rates

Charles Schwab’s 401(k) plan benchmarking data show employee participation and savings rates vary according to employer industry and employee salary level.
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According to a press release, the data reveal a 67% overall participation rate and a 7.63% overall participant savings rate. However, participation rates range from a low of 54% in the retail industry to 77% in the technology industry.

The participation rate for the Accounting/Consulting/Business Services industry is 69% and the Banking & Financial Industry has a 71% participation rate. Health Care industry 401(k) sponsors see a 59% participation rate, the press release said.

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Meanwhile, participants in the technology industry also save more on average (8.25%) than other industries, while participants of plans in the Wholesale industry save the lowest (6.57%). Participants’ savings levels are 8.18% in Accounting/Consulting/Business Services, 7.6% in Banking & Financial, and 6.83% in Health Care.

According to Schwab, while there are several contributing factors to explain why industries have different results in their plans—including an employer’s approach to automatic enrollment, savings increase programs, and matching contribution levels—participation and savings levels are also significantly affected by a person’s salary, age, and length of time with the company.

Schwab data show that an average of 48% of employees earning less than $30,000 per year participate in their 401(k) plans, compared with 77% of those making between $50,000 and $74,999. Participation rates increase with income, up to 89% for participants earning $250,000 or more.

However, savings levels plateau among participants earning $75,000 to $99,999 at 8.72% and drop off for those with higher earnings. The average savings level for those earning more than $250,000 is 6.76%, while the average rate of savings for those earning less than $30,000 is 7.57%.

Schwab’s benchmarking data, which includes both participating plan sponsor and third-party administrator clients, represents two million plan participants and 2,400 plans.

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