Data & Research July 29, 2009

Plans to Retire Take Back Seat for Business Owners

Research from The Principal Financial Group found that American business owners lack a long-term plan to exit or transition their business.

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Conducted in December and January, the survey of business owners with two to 500 employees found two-thirds (66%) do not have an exit plan to transition their business in the event of death, disability, or retirement. Instead, owners focus on growing their business (70%), followed by achieving business stability and remaining active in the business after retirement (both 47%).

“Many owners said their retirement plan is to never retire, while others plan to fund retirement by selling their business,” said Steve Parrish, national advanced solutions consultant for the Principal Financial Group.

The findings also indicate business owners’ stated priorities often do not match their actions, according to a release from The Principal. Health insurance was the top priority for business owners, yet more than half (58%) do not currently offer this benefit.

Business protection followed in importance, but according to the survey, six out of 10 (61%) do not have plans in place to help them protect their business in the case of death, disability, or termination of key employees. Retirement plans came in at number three, yet only about one in five (19%) offer a 401(k) plan to employees.

“The economic environment highlights the importance of preparing for the unexpected. While it’s understandable individuals will focus on the short-term now, they need to make time to plan for their future so they can protect their business and meet their financial goals,” said Parrish.

Products July 29, 2009

BrightScope Launches 401k Plan Management Dashboard

BrightScope, a 401k ratings and analytics firm, has rolled out what the firm calls a “groundbreaking Web application for 401k decision makers at companies of every size.”

 

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According to the announcement, the Plan Management Dashboard benchmarks a plan’s BrightScope Rating and all six component Ratings against a group of similar companies, enables viewing and verification of the underlying data and calculations, and provides for direct plan to plan comparisons.  The firm says that the Plan Management Dashboard uses “real data, from real plans – not survey data or other less precise methods”.

In an effort to deliver transparency BrightScope releases Form 5500 data on its public disclosure Web site to highlight pension plans’ required annual reports that document their financial condition, investments and operations.  Additionally, the Form 5500 data has been integrated into BrightScope’s primary site navigation bar.  

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The firm notes that “with the dashboard, those directly responsible for managing 401k plans also see a myriad of other data that fills in what doesn’t exist on the Form 5500 – including fees, investment information and more.”

BrightScope obtains its data directly, either from plan sponsors, or from publicly available sources ranging from The United States Department of Labor (DOL) to the Securities and Exchange Commission (SEC). Additionally, BrightScope receives investment data from Xignite.

BrightScope says it has rated 4,000 401k plans, spanning 20 million workers and $1.2 trillion in assets. The BrightScope Rating for small plans with assets of $50,000 to large plans with more than $30 billion can be found at www.BrightScope.com. The company says it is working to rate more than 30,000 plans by the end of 2009.

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