Data & Research November 16, 2006

Hispanics Lack Retirement Savings

A joint survey from Americans for Secure Retirement (ASR) and the Latino Coalition has found that 70.9% of Hispanic adults have less than $5,000 saved for retirement.
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According to an ASR press release on the survey findings, this lack of savings is true for Hispanics in all age groups. Almost seven in ten (69.4%) of those surveyed over age 40 have less than $5,000 in retirement savings, and 72.5% of those over age 55 said the same.

In addition, a majority of Hispanic workers are not offered retirement benefits at the workplace, ASR said. Sixty percent of the 1,000 Hispanic adults surveyed said they are not offered a 401(k) plan by their employer. ASR said this finding indicated few Hispanics were likely to have access to any retirement benefit at their workplace.

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Of those respondents who were registered voters, 64% said Social Security and pensions would not provide enough income for retirement. Respondents were not opposed to looking to Congress for help, as 72% said they would support a proposal providing tax incentives for people to invest in retirement vehicles such as lifetime annuities that provide a steady stream of income for life.

More information about ASR and the survey can be found atwww.paycheckforlife.org.
The Markets November 16, 2006

SSgA to Eliminate Redemption Fees

State Street Global Advisors Inc. (SSgA) has filed papers with the Securities and Exchange Commission (SEC) signaling its intention to halt redemption fees from its international and high-yield funds beginning in 2007.
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InvestmentNews.com reported that Jim Ross, co-head of the adviser services unit at SSgA, said the decision was based on the company’s assessment of the effectiveness of redemption fees and other methods to prevent market-timing. SSgA decided fair-valuation tools are sufficient to eliminate the need to charge redemption fees, he said, according to InvestmentNews.com.

Putnam Investments of Boston and its fund boards reached a similar conclusion, according to the news report, and on October 2 the company reduced to 1%, from 2%, the redemption fees it charges investors in many of its funds. Unlike SSgA, though, Putnam did not eliminate redemption fees entirely and decided the fees in conjunction with improved fair-market values and internal controls can help curb market-timing, said Gordon Forrester, a managing director at Putnam, according to the news report.

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Paul Kraft, a Boston-based partner with the asset management practice at Deloitte & Touche LLP, says more fund companies are implementing fair-valuation procedures, and those that already have them are revising them to make them stronger. Revisions can be attributed to the lowering of “triggers” of fair-valuation procedures, he said.

The revisions could mean more accurate prices, which will in turn lessen the need for redemption fees.

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