Products December 10, 2008

OppenheimerFunds Introduces Retirement Income Program for Advisers

OppenheimerFunds, Inc. (OFI) Retirement Solutions Division announced the launch of Lifetime Income Distributor.
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Lifetime Income Distributor is a free investment and income management program designed to help advisers create and implement retirement income strategies, according to a company release. The program enables advisers to determine sustainable withdrawal amounts and develop automated cash flow strategies to provide a steady stream of income for their clients in or entering retirement.

“We recognize that advisers are under siege today,’ said Keith Hylind, vice president of Retirement Solutions at OppenheimerFunds, Inc., in the release. “Given current market volatility and the complexity of managing multiple portfolios to generate retirement income, we feel this is the ideal time to introduce Lifetime Income Distributor. While pre-retirement planning is and will always be important, advisers need simple yet comprehensive tools such as Lifetime Income Distributor to help them manage client spending in retirement.’

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According to OppenheimerFunds, Lifetime Income Distributor combines the following:

  • a Monte Carlo-based modeling software used to determine sustainable income amounts
  • professional asset management capabilities through the OppenheimerFunds’ Portfolio Builder program
  • income distribution support through flexible systematic withdrawal systems.

Specifically, Lifetime Income Distributor runs 500 Monte Carlo simulations, which measure the effect of different investment scenarios, single or joint life expectancies, general inflation rates, and other factors. The program then projects the likelihood of an investor sustaining spending levels throughout retirement.

Lifetime Income Distributor is designed to be used most effectively with OppenheimerFunds’ Portfolio Builder, an asset allocation program introduced in 2000, the firm said. Portfolio Builder also provides automatic rebalancing and enables advisers to build and maintain a customized portfolio that reflects the needs and risk tolerances of their clients. Advisers can also use Lifetime Income Distributor as a standalone diagnostic tool for investors who do not participate in the Portfolio Builder program.

Data & Research December 9, 2008

Schwab Finds Participants Paying More Attention

Charles Schwab has found that participant engagement in Schwab-serviced 401(k) plans increased both online and over the phone during the months of September and October.
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A Schwab news release said participant activity online increased 37% and phone calls into Schwab service teams were up nearly 30% over monthly averages from January through August 2008.

“The most common inquiry our service teams are receiving is participants asking for account log-in information like pin numbers and passwords,” said Catherine Miller, Charles Schwab vice president of 401(k) education and advice, in the news release. “This is a real indication that people who have been very hands-off with their 401(k) in the past are all of the sudden getting engaged and paying much more attention.’

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In addition, one-on-one participant advice consultations via the phone increased more than 40% from September to October.

While the number of people reducing their contribution rates into plans has increased, Schwab found the majority of participants in Schwab-serviced plans are not significantly shifting asset allocations. Participants enrolling into plans for the first time or increasing deferral amounts remained consistent or even increased compared with prior months; however, the number of participants decreasing their deferral amount rose to 3% in October, compared with a little more than 1% in a typical month.

Participants conducted 50% to 70% more transfers compared with the same period in 2007, and more participants moved assets to stable value and money market funds than usual. However, transfers during the two month period still represented less than 1% of total plan assets.

Although the percentage of participants taking hardship withdrawals increased in September and October, the combined percentage of participants taking loans or hardship withdrawals remained below 1% for each month, Schwab said.

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