Data & Research December 9, 2006

Study: Pre-Retiree ‘Affluent’ Americans Still Spending Money

While the top two income tiers of Americans approaching retirement have comparable assets, those classified in a new study as affluent are still focused on accumulating assets and are more likely to need their money for short-term life events.
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That was a key conclusion of a new study prepared for the Boston-based Retirement Income Industry Association (RIIA), according to a news release from the organization, which asserts that retirees most need income generation products to help them have enough to live out their retirement years.

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The RIIA news release said the study found that affluent pre-retiree Americans’ assets are also widely distributed over a variety of financial institutions.

The study broke down American households into: Wealthy (Top 5%), Affluent (Next 15%), Mass Market (Middle 50%), Marginal (Last 30%), and life stages: Starters, Builders, Pre-Retirees and Retirees.

The study examined household assets and income, institutions where the assets are held, the kinds of retirement products being used, household decisionmaking and use of financial advisers and selected financial attitudes toward investing, Social Security and retirement.

The report was prepared by the Consumer Financial Decisions (CFD) group of SRI Consulting Business Intelligence (SRIC-BI) and Turner Consulting LLC to analyze the comprehensive household data in SRIC-BI’s MacroMonitor for a series of reports including the newly released offering.

This study is offered free to RIIA members while non-RIIA members may purchase copies by going to www.riia-usa.org for more information.

Compliance December 9, 2006

JPMorgan Retirement Plan Services Sues Former Exec Over Security Breach

JPMorgan Retirement Plan Services has filed a multi-count suit against former vice president of sales Paul Freeman, accusing him of lifting confidential client files when he defected to Fidelity’s retirement services operation last month.
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Freeman handed in his resignation into the Kansas City-headquartered company in mid November after nearly 14 years with the company, and the suit alleges that he spent hours the night before he left printing files that contained confidential client information, the Kansas City Star reported.

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The suit seeks a restraining order against Freeman as well as unspecified damages for breach of contract, breach of fiduciary duty and conversion, and seeks damages for violations of the Computer Fraud and Abuse Act.

Such actions against employees have often been brought under state trade secret laws, which require an employer to show that a employee misappropriated legally protected trade secrets.However, JPMorgan is invoking the Computer Fraud and Abuse Act in Freeman’s case, which requires that an employer show that the confidential information in question was stored in a protected computer and that the employer took steps to protect it, according to the newspaper.

The company said that it went through great lengths to secure its systems that store client information, and that computer logs show that Freeman had viewed 37 confidential files on the day before he left and that a diskette he had asked to be created for a prospective client was missing.

At first, Freeman denied taking anything but 14 boxes of his own information, but later brought the missing diskette and the boxes back to JPMorgan. However, he refused to sign a statement attesting to why he took the files and to make other comments about his activities, the newspaper reported.

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