Data Mine—November 2019

The retirement plan industry is flush with data points and analyses. In this November 2019 edition of Data Mine, we have dug out the most useful findings from a range of published works.

Art by Jennifer Xiao


Survey

2019 Wells Fargo Retirement Study

Published by Wells Fargo  

Key Findings
  • One in Three  workers have personally saved less than $25,000 for retirement 
  • 13%  have saved between $25,000 and $100,000
  • 11%  have saved between $100,000 and $250,000 
  • Half of workers have saved less than $250,000

Full survey available here.

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Survey

Investment Perspectives: Reduced Recession Risk

Published by Northern Trust Asset Management

Key Findings

The short-term drivers of market performance are not always clear, but an improving outlook toward economic growth seems to be a clear contributor to the recent rally in equities. At the same time, a rapidly slowing manufacturing sector has raised concerns over the outlook for global growth, which have also been reflected in a flat yield curve.

Full survey available here.

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Survey

2019 403(b) Provider Survey 

Published by PLANSPONSOR Magazine

Key Findings

Investment lineups are changing as more contemporary investment options like mutual funds and other institutional investments displace the annuity contracts on which the industry was built. All of this change has fueled recent improvements in processes, systems and technology that have helped to modernize the plan sponsor and participant experience.

Full survey available here.

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Survey

Health and Retirement Survey 

Published by the Employee Benefit Research Institute (EBRI)

Key Findings

The average household expenses for those 50-64 were $55,000 in 2005. In that same year, they were $43,000 for those 65-75, which was 22% less. For those ages 75 and older, total household expenses were $33,000, or 23% less than the 65-74 age cohort and 40% less than the 50-64 cohort. This pattern was consistent across all survey years. 

Full survey available here.

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Survey

19 Facts About Women’s Retirement Outlook 

Published by Transamerica Center for Retirement Studies 

Key Findings
  • 12% of women say they are “very” confident that they will be able to fully retire with a comfortable lifestyle 
  • 55% of women expect to retire after age 65 or do not plan to retire 
  • 84% of women who reported that they planned to work beyond 65 cited financial reasons 
  • 56% of women reported taking key steps to protecting their long-term health, including eating healthfully, exercising regularly and seeking medical attention promptly 
  • $23,000 – the median household retirement savings reported in the survey

Full survey available here.

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Data Mine – September 2019

Data Mine – October 2019

SunTrust Bank 401(k) Litigation Heading to Remediation

After years of litigation, the plaintiffs and defendants have jointly moved for entry of an order referring the case to mediation before a neutral third party.

A new joint motion has been filed in the Employee Retirement Income Security Act (ERISA) lawsuit targeting the retirement plan of SunTrust Bank, which could bring years of litigation to an end. 

The underlying lawsuit alleges that SunTrust Bank’s 401(k) plan engaged in corporate self-dealing at the expense of plan participants. The lead plaintiff suggests that plan officials violated their fiduciary duties of loyalty and prudence by selecting a series of proprietary funds (referred to as the STI Classic Funds) that were more expensive and performed worse than other funds they could have included in the plan—and by repeatedly failing to remove or replace the funds.

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Back in early October, the U.S. District Court for the Northern District of Georgia’s Atlanta Division issued a lengthy order in the long-running ERISA lawsuit. In the October ruling, the District Court granted the defendants’ motion seeking to discredit certain expert testimony generated by the plaintiffs. At the same time, the ruling denied the plaintiffs’ motion to reject the expert reporting of two pro-defense witnesses. Finally, defendants’ motion for summary judgment was granted in part and denied in part. It was granted to the extent plaintiffs’ claims are premised on defendants’ conduct regarding the Short Term Bond Fund, Investment Grade Bond Fund, Small Cap Growth Fund, Capital Appreciation Fund, and Prime Quality Money Market Fund. It was denied to the extent plaintiffs’ claims are premised on defendants’ conduct regarding the Mid-Cap Equity Fund, Growth and Income Fund, and International Equity Index Fund.

Now, the plaintiffs and defendants have jointly moved under Local Rule 16.7 for entry of an order referring the case to mediation before Robert A. Meyer, Esq., of the JAMS organization. The parties have also moved for a stay of all proceedings to permit them time to pursue the resolution of this dispute, including at the mediation conference tentatively scheduled with Meyer on January 7, 2020, subject to the Court’s approval.

“The parties respectfully request that the Court refer this case to mediation and appoint Robert A. Meyer as neutral third-party mediator,” the joint remediation motion states. “The parties further respectfully request that the Court stay all proceedings and deadlines in this case pending mediation before Mr. Meyer and remove the case from the Court’s January 6, 2020 trial calendar. The parties will report to the Court on the status of the January 7 mediation and the case no later than January 31, 2020.”

In the report, the parties anticipate stating either that (i) a settlement agreement has been reached and proposing deadlines for subsequent filings seeking Court approval of the proposed settlement, or (ii) that no settlement agreement could be reached and proposing deadlines that will enable the parties to move promptly to trial, including deadlines for remaining briefing on plaintiffs’ motion for reconsideration and submission of a joint consolidated pretrial order.

The full text of the remediation motion is available here.

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