Retirement Readiness Index

Fiduciary Benchmarks has launched a Retirement Readiness Index (RRI) for 20,000 retirement plans. Coverage includes virtually every plan with more than $10 million in assets.

The RRI reveals a wide disparity in the retirement-readiness between industries. For example, the average employee in transportation equipment manufacturing has an RRI of 96%. By contrast, the average employee in hospitals has an RRI of only 73%. In addition, RRI figures can vary dramatically for companies within a particular industry. Within the transportation equipment manufacturing industry the range is from 60% to 153%, while in hospitals it is from 59% to 208%.

Retirement Fairness Act of 2009

Rep. Lloyd Doggett, D-Texas, has introduced the Retirement Fairness Act of 2009 which would "amend the Internal Revenue Code of 1986 to prevent the overstatement of benefits payable to non-highly compensated employees under qualified plans."

Doggett introduced the bill on Nov. 19 with 16 co-sponsors. It has been referred to the House Ways and Means Committee.

Irvine Retirement, California

Irvine, California, school officials have accepted the voluntary retirement of 69 veteran teachers as the Irvine Unified School District grapples with a projected $14.7 million budget deficit.

Early Retirement Near Fresno

The Clovis Unified School District, near Fresno, California, has offered an early retirement option to its 1,100 qualified employees. About 115 of them have opted for the offer.

Generous Retirement Options

Agencies of the California state government may choose among several retirement plans offered by the state retirement system CalPERS.

For example, the LVMWD plan is also known as 2% @ 55, which means that an employee retiring at age 55 would receive a lifetime pension of 2 percent of the employee’s highest salary for each year employed by the district or previous public- agency employer. Thus, an employee who worked for 30 years and retired at 55, would receive a lifetime pension of 60 percent of highest salary. Benefits increase with age and years of employment, e.g., under the 2% @ 55 plan, if that employee chose to work to age 63 and thus had 38 years of service, the lifetime annual pension would be 95 percent of highest salary.

The most employee-generous CalPERS program, known as 3% @ 60, would pay an employee retiring at 60 with 35 years of service a lifetime base pension of 105 percent of highest salary.

The STAR Award

Securian Retirement's 401(k) plan enrollment guide has earned the Mutual Fund Education Alliance's STAR award for excellence in marketing, education, and communications.

The customizable guide, entitled "Grab a piece of retirement security," walks employees through a four-step enrollment process that enables participants to create a retirement savings plan according to their own individual saving and investing styles. For participants wanting more investing information, the guide offers illustrations that show potential growth of savings over time, worksheets to help them decide how much to save and where to invest their contributions, and information about their retirement plan and the investment options available to them. For those wanting less, it offers a quick and easy enrollment path using the plan's pre-allocated investment features.

Retirement Savings Exceeds Home Ownership as a Canadian Priority

Retirement savings nudged out home ownership as a financial priority for Canadian adults, according to a new poll. The Ipsos Reid poll, conducted in September for the Royal Bank of Canada, found exactly half of Canadians focus more on retirement savings, while 47 per cent said owning their home took priority. The ability to make regular debt-reduction payments followed in third place with a total of 41 per cent saying that was their primary concern.

In further findings, 38 per cent of Canadians were trying to save money for rainy-day situations while 33 per cent admitted they were "just trying to keep their head above water."

Delaying Retirement in the Puget Sound

More than 60 percent of residents in Washington’s Puget Sound-area say they have delayed or plan to delay their retirement beyond their ideal age.

Support Goes a Long Way

Research shows that city and state government employees are twice as likely to save for retirement when employers provide support, resources, and education for doing so. MB&A Market Research has studied the motivational behaviors that keep some public employees from saving for retirement. The average participation rate in 457 plans, a retirement savings plan primarily for state and local government employees, was 54 percent when employers were highly supportive and actively involved versus 25 percent when employers were less supportive.

Rollovers into an IRA

Individual retirement arrangements (IRAs) are benefiting significantly from rollovers from employer-sponsored retirement plans and contributions, according to a new report published today by the Investment Company Institute. At year-end 2008, IRAs accounted for one-quarter of all U.S. retirement wealth and 8.5 percent of total U.S. household financial assets.

The analysis found that the employer-sponsored retirement plan system has fueled growth in IRA ownership and balances as workers roll over plan assets when they leave jobs or retire. Rollovers generate a significant portion of the flows into IRAs, dwarfing new contributions as a source of growth. Such rollovers nearly doubled between 1996 and 2004. In addition, trends in the U.S. labor market and in retirement coverage such as the aging of the workforce and shortened vesting periods have increased IRA accumulations.