WINDSOR, Conn. - Defined contribution plan participants cast doubts about the helpfulness of the plan information provided by their employers, preliminary results of an Access Research Inc. survey show.
Of the more than 1,300 401(k) plan participants who responded to the nationwide survey, less than one-third had a very favorable view of the materials describing their plan. They felt the materials were not easy to understand. Less than one-quarter of those surveyed held a very favorable view of the materials sent to them by the plan's investment managers.
Participants use an average of 2.8 sources of information in making investment decisions about their 401(k) assets, according to survey data. A spouse or relative and information from an enrollment meeting are most frequently used. The written materials from the employer and the opinion of a knowledgeable friend are the next most frequently used sources.
Participants seem to be fairly satisfied with the information resources available to them, since only one-third of respondents said personalized financial planning and pre-retirement counseling for a fee were attractive plan features.
Just one out of five participants would be willing to pay for investment advice from a representative of the company that manages the investments in the plan. The median amount participants said they would be willing to pay was $40.
Retirement planning worksheets were rated as an attractive or somewhat attractive plan service by 82.1% of respondents. Investment education seminars at work were found to be helpful by 81.8% of respondents, and group pre-retirement counseling was rated as an attractive option by 80.7% of plan participants.
Access will publish the full results of its participant attitude survey before June 30.
COLUMBUS, Ohio - Public Employees Benefit Services Corp. hired Acumen Financial Inc., Cambridge, Mass., to provide personalized financial planning to 457 plan participants.
Acumen's software will integrate personal data from PEBSCO's record-keeping system to provide a customized report for each employee, illustrating retirement savings goals, what-if scenarios with different asset allocations and suggestions for optimal investment management.
PEBSCO is testing the program this year with 90 existing public agency clients, said Brad Ramer, manager of financial planning. PEBSCO will offer the personal financial planning service at no additional charge to all participants or sponsors in January 1996.
The program will be used primarily by PEBSCO field representatives, who will prepare and review the report with individuals or small groups. Service providers generally deal directly with the participant to market participation and investment selection and to deal with administrative issues.
DENVER - TIAA-CREF opened a state-of-the-art participant service center in Denver to supplement the system's New York service center. The Denver center will handle participant calls to an automated voice response system and customer service operators who will provide personalized retirement counseling and information to TIAA-CREF's 1.7 million participants.
Claire Sheahan, press relations director, said locating the center in Denver means TIAA-CREF can offer services over an extended time period: from 8 a.m. EST to 8 p.m. PST. TIAA-CREF typically fields more than 300,000 calls per month from participants in the $135 billion retirement system.
A new data center also is part of the Denver site. It provides TIAA-CREF with better backup and disaster recovery protection in the event of power outages or weather-related difficulties in New York.
BOSTON - State Street Bank and Trust Co. introduced the first certificates of deposit designed for use by public defined contribution plans, such as 457 plans.
The three CDs range across the risk spectrum. The least risky is the Guaranteed CD, with a fixed rate of return and no equity link. The Guaranteed CD Plus guarantees a floor rate of return and opportunities for higher returns based on 35% of the average annual return from the Standard & Poor's 500 Stock Index over the previous three years. The most aggressive option is the Guaranteed CD Max, which offers the opportunity for highest return based on 100% of the S&P 500 average return over the previous three years.
Franklin Templeton Distributors promoted Kent Strazza to vice president and national manager of retirement sales, heading a new division that will target small to midsize 401(k) plans.
Mr. Strazza said Franklin executives are working on a business strategy for the division, although Franklin will do its own record keeping for plans larger than $1 million or more than 200 participants. In addition, Franklin is going to be hiring sales, marketing, administrative and service people to staff the new division. Mr. Strazza was vice president and national sales manager for the bank division. He will be replaced by H.G. "Toby" Mumford, who continues as executive vice president of Franklin Institutional Sales.