Data & Research April 12, 2011

Social Security Statements Increase Knowledge

The Social Security Statement received annually by workers increases the probability that they will be able to estimate their benefit more accurately by 4.5 percentage points, according to a new study.
Reported by

The Center for Retirement Research at Boston College conducted the Health and Retirement Study (HRS), a longitudinal, biennial, and nationally representative survey of older Americans that began in 1992. It found that before the Statements started circulating, around 50% of households would contact the Social Security Administration by age 62. The CRR found the Statement appears to have improved the estimates for workers who did not contact the SSA, bringing the accuracy of their estimates in line with those of the workers who did contact the SSA. 

However, the analysis found no impact of the Statement on retirement behavior. CRR said this might mean workers are already behaving optimally, or the information in the Statement is not sufficient to improve their retirement behavior.   

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CRR contends that the Statement might still improve workers’ retirement planning if they become less likely to be surprised by the amount of their benefits. For example, if workers learned that their Social Security benefits would be less than anticipated, they might not change when they plan to retire, but they could decide to save more ahead of retirement.  

The CRR Issue Brief is available here.
Deals & People April 12, 2011

Russell Expands Hedge Fund Team

Russell Investments is expanding its hedge fund team with the addition of Brian Burke as risk management officer and Lance Babbit as senior portfolio manager, hedge funds.
Reported by

Burke will be responsible for analyzing market risk exposures in individual alternative investment manager portfolios, as well as aggregate Russell fund of funds portfolios. As a senior portfolio manager, Babbit will oversee the firm’s multi-strategy hedge fund of funds portfolios, both custom and commingled, for institutional and private clients.   

Both will be based in Russell’s New York office and will report to Ed Robertiello, managing director, hedge funds. The hedge fund team includes 13 professionals with experience working at pension funds, funds of hedge funds, direct hedge funds and trading firms.   

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According to the announcement, Burke brings to the team nearly 10 years of experience in providing risk services to institutional investors in hedge funds and other alternative investments. Most recently he was executive director and head of the analyst team at Measurisk, a risk analytical system for hedge funds.   

Babbit joins Russell from Credit Suisse Group where he was director, head of North America portfolio hedge fund of funds in the Alpha Strategies Group.

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