J.P. Morgan Asset Management also moved faster now than in 2008 getting information to clients, said Michael Falcon, the New York-based managing director and head of retirement. “We were proactive. We were better by a measure of hours.”
His firm provided talking points and explanatory materials to sponsors. Officials held dial-in conference calls and webinars for sponsors, advisers and brokers during the week of Aug. 8-12, featuring J.P. Morgan market strategists and retirement specialists. “The sponsors' response was very calm,” he said.
Mr. Falcon said the growing use of target-date funds and managed accounts has contributed to participants' and sponsors' rolling with the punches of short-term market volatility. “I see diminished volatility vs. September 2008,” he said. “People are behaving better.”
During the first two weeks of August, Mr. Falcon said he didn't see any increase in loans or withdrawals or any drop in participants' contribution rates. Although call volumes were higher than normal and the transfer rate to money market, stable value and bond funds from stock funds was higher than usual, at less than 1% of total DC assets, the transfer rate didn't raise any red flags.
Among clients of Aon Hewitt, Lincolnshire, Ill., call volume from July 21 to Aug. 15 was up 15% to 20% and web traffic was up as much as 50%, said Pamela Hess, director of retirement research. But there was no indication of participants halting or reducing contributions.
More than 1% of DC assets moved from equities to stable value and cash, “definitely higher” than normal, she said. But this was less than during the worst part of the recession — from August 2008 through March 2009 — when 6% of assets moved into cash and stable value from equities.
“More employers see this (retirement savings) as an important issue, so they are offering more” products and services that encourage long-term investing, diversification and professional advice, said Ms. Hess.
Fidelity Investments, Boston, was “much quicker to deploy” information in 2011 than in 2008, providing call-center representatives with talking points and information about research resources, said Beth McHugh, vice president for market insights. “We were already prepared to respond to the debt crisis and what it might mean.”
For example, Fidelity created a “market volatility resource center” on its website with market commentary from Fidelity experts on topics such as “panic is not a strategy” and “trading tips for manic markets.”
Ms. McHugh said social media may have played a calming role in late July and early August. “People are counseling each other, offering support and reassurance on our Facebook and Twitter sites,” she said.
Vanguard has been using Facebook, Twitter, videos and blogs to get its message to investors, with comments from company executives extolling the benefits of long-term investing and discussing the dynamics of market volatility.
Vanguard detected higher call volume during the debt-ceiling crisis and immediately after the S&P downgrade, and these spikes were “very similar” to the market declines in 2008, said Ms. Young. “The more reassuring story (in 2011) is that people are not trading.”
“We typically see reduced savings rates when there are layoffs or corporate match reductions,” said Deanna Garen, managing director of strategic marketing for New York Life Retirement Plan Services, Westwood, Mass. “It's too early to tell whether changes are resulting in the overall savings rate.”