Products August 1, 2007

John Hancock Announces New Retirement Portfolio Calculator

John Hancock Funds recently launched a new retirement portfolio calculator on its Web site.
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The goal of the Lifecycle Retirement Portfolio Probability Calculator is to show the results of a model portfolio built with the same asset allocation as the John Hancock Lifecycle Retirement Portfolio, the fund manager said, in a press release. The Calculator determines the probability that such a portfolio would last throughout retirement, given different retirement lengths and annual withdrawal rates.

By adjusting the sliders to view different annual withdrawal rates and distribution periods, investors will see a projected probability of success, defined as a percentage chance of retirement portfolio survival, according to the announcement. The chance of portfolio survival is projected using Monte Carlo simulation, which is useful for modeling outcomes with significant uncertainty and variety of inputs.

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Carey Foran Hoch, Senior Vice President, Marketing, John Hancock Funds, said in the release that the calculator runs more than 5,000 simulations for 14 different asset classes. “During retirement, making your money last is critical. The insights gained from our Retirement Portfolio Calculator can help investors select a lifelong investment solution and more efficiently plan for their retirement,” according to Hoch.

Visitors to the John Hancock Funds site (www.jhfunds.com) can find the calculator by selecting the “Retirement Planning” tab at the top of the home page, choosing “Tools and Calculators” and then “Preparing for Retirement.”

Compliance July 31, 2007

Judge Blasts Principal Fee Suit Plaintiff Lawyers in Appeal Delay

A federal judge presiding over a lawsuit against the Principal Financial Group over its 401(k) revenue sharing arrangements has cleared the way for the case to be moved to Iowa after plaintiff’s lawyers never mounted the appeal they had promised.
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Bemoaning the “inordinate delay” in plaintiff’s lawyers asking for a review before a federal appellate court, U.S. District Judge David R. Herndon of the U.S. District Court for the Southern District of Illinois this week lifted his earlier stay of the Illinois-to-Iowa case transfer (See Principal Suit Transfer Order Postponed).

“The (appeal) proposal seems to the Court illusory and now clearly a dilatory tactic,” Herndon complained in his later order lifting the transfer stay, charging that lawyers for Plaintiff Joseph Ruppert never explained to him why the appeal to the 7th U.S. Circuit Court of Appeals had not yet been filed.

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Ruppert, vice president of Fairmount Park Inc., which runs the Fairmount Park Racetrack in Collinsville, Illinois near St. Louis, alleged in the suit that Principal’s revenue sharing practices violated the Employee Retirement Income Security Act (ERISA). Ruppert acts as trustee for his company’s 401(k) plan (See Plan Sponsor Sues Principal over 401(k) Fund Revenue Sharing).

Herndon’s instructions to transfer further proceedings to the U.S. District Court for the Southern District of Iowa in Des Moines came at the request of lawyers for the Des Moines-based Principal after they argued that it was unfair to force the financial services firm to litigate the case in an Illinois federal courtroom.

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