The shift to so-called hybrid pension plans by larger employers appears to be slowing – and perhaps responding to different motivations, according to new analysis from Watson Wyatt Worldwide.A third of the companies in the Fortune 100 offer employees hybrid pension plans, a slight increase from 32% of the same group in 2000. In 1985 just one of the Fortune 100 firms offered a hybrid plan. Shifting Priorities?On the other hand, half now offer workers a traditional defined benefit pension plan, also down slightly from 52 over the same two-year period, according to the analysis. While most of those firms also offer a 401(k), the number of Fortune 100 firms offering just a 401(k) plan now totals 17, up from 10 in 1998. ‘As the conversion to hybrid pensions has drawn attention from Congress over the past two years, the price tag for these conversions has escalated,” according to Eric Lofgren, director of the benefits consulting group at Watson Wyatt. ‘The companies that have recently adopted hybrid plan designs are mainly those that want to facilitate a cultural change or for whom a traditional career-long employment model is simply no longer realistic — not companies looking to generate cost savings.”Lofgren notes that some employers may be holding off on plan conversions as they await further clarification of the legal status of hybrid plans in the wake of recent litigation.3Plansponsor.comLSE To Probe Savings Industry in Europe
Researchers at the prestigious London School of Economics (LSE) will kick off a five-year research project into the state of savings rates and pension programs across Europe. UBS Global Asset Management is funding the effort.According to a report on the IPE newswire, the project will examine the problems of an aging population and effective retirement schemes – considering the impact of government money, employer involvement, and the worker’s own savings.In particular, LSE and UBS say the study will focus on three pension themes:
- pension fund management including the differences in structure and challenges facing both defined benefit and defined contribution plans as well as performance and risk measurement,
- household savings trends including the different forms of savings programs across Europe, and
- public and legal pension policies
Participants in retirement plans at Fidelity Investments may soon be able to monitor all of their investments from one Web site – regardless of the mutual fund, brokerage, or bank in which the money is deposited.Fidelity officials said they planned to offer the Full View feature – gathering data about all of a participant’s accounts – to plan sponsors starting in May, and for it to be widely available to workplace investors later this year.If the employer opts for the new plan option, Fidelity said in a press release, participants would be able to consolidate online data from more than 2,100 financial institutions.Automatic Account UpdatesFidelity said the Full View feature automatically updates financial data, which the investment company said would allow participants a better chance of implementing investment strategies that took into account their entire financial picture.According to the press release, Fidelity participants used to have to manually type in other account data into Fidelity PortfolioPlanner, the company’s financial planning tool, and then update the data each time they reviewed their plan’s progress.Fidelity Investments has assets in custody of $1.5 trillion, including managed assets of $887 billion. It offers investment management, retirement, brokerage and shareholder services to 16 million individuals and institutions, as well as through 5,500 financial intermediaries.3Plansponsor.comWM Says Only One in a Thousand Mutual Funds Up Last Year
A new study of UK mutual fund performance shows how badly they were hammered during 2001, with only one out of 1,000 funds turning in a positive return.Overall, according to the survey by WM, it was the poorest fund showing in a decade with an 8.9% drop, a report from IPE newswire said. Nine out of ten funds, which collectively had 423 billion in assets, ended in the minus column with showings of -5% to -14.3%, according to WM.The year also saw a flight from equities. The average fund followed by WM allocated 71% to equities at the beginning of 2001 – 48% to UK issues and 23% overseas. During the year, funds pulled out 3.5 billion, which brought down the overall equity average to 46%.WM said that was the lowest it has been since the mid-1980s. Monetary assets and index-linked assets now represent almost 20% of the average fund’s portfolio – more than double that of 10 years ago, WM said. WM’s figures also show a considerable rise in allocations to overseas equities with an additional 12 billion committed during 2001. Even after falling markets are taken into consideration, the allocation of 25% is the highest level recorded in the WM universe. American and Japan were the two greatest beneficiaries of this influx of cash.3Plansponsor.com