Deals & People February 14, 2013

Reliance Trust Hires Two in Retirement Strategies

Reliance Trust Co. added Robert Thomann and David H. Williams to its Retirement Strategies group.
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Thomann joins the company’s retirement strategies group as product manager for its collective investment trust (CIT) business, and Williams will manage all of the special fiduciary services team’s activities.

Thomann brings more than 25 years of experience in the financial services industry, including collective investment funds, client services, investment management, finance, operations, regulatory and legal affairs, investment performance reporting, audit, custody, fund accounting, investment sub-advisers and vendor management.

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Before joining Reliance Trust, Thomann served as head of trust services for a national trust company affiliated with a global investment management firm, and he previously led a division of a global financial services company that provided investment management and trust services for personal trust, defined benefit (DB) and defined contribution (DC) plans, including 401(k) and other qualified ERISA plans. He holds a Bachelor of Science degree and a Master of Business Administration degree from Fairleigh Dickinson University.

Williams brings more than 40 years of Employee Retirement Income Security Act (ERISA) legal and employee stock ownership plan (ESOP) experience to Reliance Trust. He will manage the special fiduciary services group and contribute to the strategic development of fiduciary activities for Reliance Trust. Williams will also work with Reliance Trust’s senior leadership to advance several of the company’s long-term initiatives and programs for its special fiduciary services group. He will work alongside Reliance Trust’s senior fiduciary consultants Stephen Martin, Howard Kaplan and Lance Studdard.

Williams is a former partner and attorney at Schiff Hardin LLP. Before his position at Schiff Hardin, Williams was a partner at two additional law firms and an associate at two others. He received a Juris Doctor from The Ohio State University College of Law, a Master of Arts in political science from Columbia University and a bachelor’s degree from Denison University.

Data & Research February 14, 2013

401(k) Participants Savings More

An analysis of 401(k) plans administered by Fidelity Investments shows the average participant balance increased to another record high by the end of 2012.

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The average 401(k) balance hit $77,300 at the end of the year, up from $69,100 one year earlier, an increase of 12%. The fourth-quarter average balance tops the previous quarter’s high of $75,900. About two-thirds of the 2012 increase was attributable to market action, while one-third was due to participant contributions, Fidelity said.  

Participants, on average, save 8% of their annual salaries in their 401(k) plans. When the typical employer contribution is factored in, be it a match or profit-sharing, the average participant’s total savings rate increases to 12%. In addition, for a 15th straight quarter, more participants increased their savings rate than decreased it (5.8% versus 3.1%).   

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Fidelity noted that regulations now allow participants to convert money in existing qualified savings plans to a Roth account, should their plan include the investment option (see “The Increased Availability of Roth In-Plan Conversions”). According to Fidelity, 37% of workplace retirement plans offer a Roth savings option, up from 12% five years ago. Of these plans, 12% offer the Roth in-plan conversion option.   

Younger investors tend to utilize Roth the most. One-in-10 participants in their 20s contribute to this option, versus 6% overall. These individuals may be well-positioned to benefit from Roth due to their long investment horizon and the likelihood they will be in a higher tax bracket upon retirement, Fidelity noted.   

Roth contributors also boast a higher savings rate, deferring an average of 11%. Nearly six out of 10 (59%) of these participants utilize a tax diversification strategy by saving a portion in a post-tax Roth 401(k) as well as a pre-tax savings option. When factoring in employer contributions, Roth participants show a total savings rate of 15.3%, Fidelity data shows.

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