Participant Transfer Activity Significantly Higher in October

Participants' transfer activity level was significantly higher than usual in October, according to the results of the Hewitt 401(k) Index.

Ten days of the month experienced above normal level of transfer activities. On average, 0.10% of balances were transferred on a net daily basis—twice as much as the trailing average of the past 12 months. Hewitt said the last time the index had such high level of transfers was in late 2002.

In addition, a total of 1.25% of balances was transferred on a net basis during October—2.7 times the historical average (0.46%).

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Flight to Fixed Income

In dollar terms, the direction of the transfers were strongly fixed-income-oriented during October, as participants moved $776 million from equities to fixed-income investments. However, on a daily basis, only 57% of the days were fixed-income-oriented, according to Hewitt data.

GIC/stable value received the largest amount of inflows in October ($1 billion), which represented 76% of the net transfers for the month. Company stock funds received inflows of $233 million, followed by money market funds with $85 million.

Nearly all the equity asset classes experienced outflows. International funds were the biggest loser, with $279 million transferring out of this asset class. Lifestyle funds had $258 million moving out; followed by balanced funds with $216 million of outflows; and large U.S. equity funds, which lost $208 million.

Equity Asset Loss

Due to both negative market return and participant transfers, the overall equity allocation in the Hewitt 401(k) index dropped 5% during the month, to 53.8%, which is the lowest equity allocation since the beginning of the 401(k) index in 1997, according to Hewitt.

GIC/Stable Value held the largest share of assets at 31.84%.

GIC/Stable Value also gained the largest share of participant discretionary contributions at 22.04%, followed by Lifestyle/Pre-Mix (20.09%), and Large U.S. Equity (17.57%).

The Hewitt 401(k) Index data is available here.

GE Asset Management Adds to Institutional Sales Team

GE Asset Management Incorporated (GEAM) on Tuesday announced several additions to its institutional sales team, expanding the firm’s presence in both the public and corporate plan markets.

Paul Eisenhardt, CIMA, joined GEAM earlier this year as a senior vice president, Public Funds, responsible for large public plan sales in the Eastern U.S. In this role, he partners with Kevin O’Connor, who has transitioned within the firm to join GEAM’s institutional sales team as a vice president, also with responsibility for public plans in the Eastern region, according to a GEAM announcement.

Chris Mullahy has joined the firm as a senior vice president, Corporate Plans, responsible for institutional sales to the corporate marketplace in the Northeastern U.S. Mullahy is one of GEAM’s six regional institutional sales team members focused on the corporate marketplace in the U.S., the announcement said.

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All three new positions report to Bret Young, senior vice president and U.S. sales leader.

Eisenhardt was previously a principal with State Street Global Advisors, where he was responsible for the sale of separate accounts, mutual funds, and ETFs. Earlier in his career, he was a regional vice president with Mellon/Dreyfus, with responsibilities for the sale of separate accounts and investment-only retirement plans in the broker/dealer, bank, and financial planner channels. He has also held roles with Alliance Benefit Group, Pension & Estate Planners, and BISYS Qualified Plan Services.

O’Connor previously was GEAM’s Director of Enterprise Sales, leading the firm’s national cross-sell effort with other GE businesses. O’Connor has worked for GE since 1998. Before joining GEAM, he spent several years at GE Commercial Finance and GE Energy in commercial sales and marketing roles.

Mullahy was previously with UBS Global Asset Management, where he was executive director—head of defined contribution sales. At UBS he was responsible for representing the firm in investment-only opportunities with plan sponsors with over $1 billion in assets. Previously, he was senior vice president and director of sales for the Institutional Solutions Group of IXIS, where he managed a team of eight sales professionals and two client service specialists calling on the defined contribution investment-only and sub-advisory/variable annuity markets.

GEAM is a global asset manager wholly owned by General Electric Company and, along with its subsidiaries, manages approximately $135 billion (as of September 30) in total assets.

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