Earlier this year Fidelity reviewed loan and withdrawal
activity among 21,200 retirement plans and 13.5 million participants, finding loans
are often viewed as an unavoidable financial necessity for those taking them.
Despite the perceived necessity, retirement savers almost
never see a long-term improvement in the financial situation by choosing a loan
or even a hardship withdrawal, Fidelity says.
Overall about one in 10 plan participants elected to take a
loan last year, the research shows, with an average amount around $10,000.
Hardship withdrawals occur even less frequently—drawn by about 2.2% of
participants during the year-long sample period. Most often participants taking
a hardship withdrawal cited medical expenses (19%) or the need to avoid foreclosure on a
home (34%).
Part of what makes taking loans harmful for the long-term is
that those who take one loan are likely to take at least one more in the future. While 50%
of 401(k) borrowers take just one loan, the other 50% borrow multiple times,
Fidelity says, and 10% go on to take a hardship withdrawal.
The reporting echoes earlier research, published by the National Bureau
for Economic Research (NBER), which suggests when a plan sponsor permits
multiple rather than only one loan, each individual loan tends to be smaller,
but the probability of plan borrowing nearly doubles, and the aggregate amount
borrowed rises by 16%. The researchers contend that this suggests employees
perceive that easier loan access is actually an encouragement to borrow.
Perhaps unsurprising, Fidelity finds borrowers tend to save less on average over time after their first loan. For example, fully one
in four borrowers reduced their savings rate within five years of taking a
loan, generating $180 to $690 less per month in anticipated annuitized
retirement income. Even more troubling, Fidelity concludes, 15% of those who take a loan go on to
stop saving altogether within a fairly short period of time.
These findings and others are presented in a helpful infographic here.
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Asset International (AI) a global leader in providing
critical data, business intelligence, and information services to the worldwide
investment management industry, today announced the hiring of five executives,
two senior staff and two advisers in support of the growing global demand for
rapidly delivered insightful, relevant, and reliable, market intelligence and
data.
Joel Mandelbaum, chief executive officer of Asset
International states, “This is a big step toward creating the global leader of
business intelligence and digital media in the investment management space.
This is a proven team with deep commercial experience and repeated success.
Included among the firms from which they joined Asset International are:
Bloomberg, Bottomline Technologies, Openlink, Ion Trading, and Cerulli
Associates. These joiners, when coupled with our excellent staff and deep
client community, will drive this business far, and enable us to help our
clients advance their objectives with their clients.”
Mandelbaum’s appointment as CEO and president of Asset
International was announced in late August this
year.
Tony Salewski, Managing Director at Genstar Capital, Asset
International’s majority investor, says, “Genstar is excited about the
increased depth of talent and experience these new hires bring to Asset International.
AI presents an exciting opportunity for growth in the asset management space
and we believe the decision by our new executive team members to join AI is an
endorsement of Joel’s proven track record and the significant and growing value
we provide to our clients.”
“Only a sponsor with a long-term view on value creation and
confidence in the company and the team would embrace such a swift and material
investment in people. I am thrilled to be working with such a partner in
Genstar Capital and to be reunited with this team” says Mandelbaum.
Every day, with its data, analytics, media, and research,
the 11 business units of Asset International touch 175,000 professionals across
1,000 clients that include almost all of the world’s largest asset owners,
asset managers, custodians, and corporate retirement plan sponsors with
aggregate assets in excess of $30 trillion. Every month, Asset International’s
business units conduct client transaction cost analysis, examining 500 million
equity, fixed income, and foreign exchange trades with an aggregate value of $2
trillion dollars.
NEXT: New members of Executive Committee
Terry Beadle is chief revenue officer responsible for Sales,
Account Management, Professional Services, and Client Support and a member of
the Executive Committee. Most recently, Beadle was at Bloomberg. Prior to
Bloomberg, he held various executive positions at Wall Street Systems including
managing director of Professional Services, managing director of Treasury
Systems Products and managing director of Global Treasury Sales.
Tony White is chief content officer, global product manager
and a member of the Executive Committee. Most recently, White was business
development director at Bottomline Technologies. Previuosly, he held various
executive positions at Wall Street Systems including managing director of
Software Development, managing director of Account Management and managing
director of FX Trading Products, including the Wallstreet FX platform and the
Electronic Settlement Network.
Andrew Guillette is chief Data and Research officer, global
product manager, and a member of the Executive Committee. Most recently,
Guillette was chief operating officer of Cerulli Associates and has held
various asset management research, planning, and marketing positions with
Columbia Investments, John Hancock, and Fidelity Investments.
Seth Cohen is senior adviser to the Executive Committee.
Cohen was formerly the CFO of Newtek Business Services, Inc. and a trustee of
the City of New York’s Public Pension Funds.
NEXT: New appointments
Garry Hodnett is director of Human Capital. Most recently,
Hodnett was director of Human Resources at Ion Trading. Previously, he was
director of Human Resources at Wall Street Systems.
Leonie Alsop is director of Global Marketing. Most recently,
Alsop was SVP, global head of Marketing at OpenLink Financial. She was the
former global head of Marketing Operations at Temenos and global head of
Marketing at Wall Street Systems.
Allison Joy Phillips was appointed executive assistant to
the CEO. Phillips was formerly a sales professional at SuperDerivatives, Ion Trading
and Wall Street Systems.
Mandelbaum also announced that Avi Nachmany has been
appointed senior adviser to Strategic Insight, which he founded 30 years ago
and where he was most recently executive vice president, director of Research.
John Lee has been appointed adviser to Global Custodian, The
Trade and LiquidMetrix. Lee founded The Trade 10 years ago and was most
recently managing director, Europe for Asset International.
About Asset International Asset International
(AI) provides critical data, business intelligence, and information services to
the global investment management industry. AI delivers proprietary data and
analytics, as well as marketing solutions that target global asset managers.
The company’s client base includes more than 500 of the most prominent names in
the asset management industry. Its recognized data brands include Strategic
Insight, Investor Economics, Corporate Insights, LiquidMetrix, FWW, and Plan
for Life. AI’s portfolio of leading editorial titles includes brands such as PLANSPONSOR,
PLANADVISER, Chief Investment Officer, Global Custodian, and The Trade. The
company’s headquarters are in New York and it maintains offices in Stamford,
Connecticut; Boston; the San Francisco Bay area; London; Toronto; Munich;
Melbourne, Australia; and Hong Kong. AI is backed by Genstar Capital. For more
information, visitwww.assetinternational.com.
About Genstar Capital Genstar Capital (www.gencap.com)
is a leading private equity firm that has been actively investing in high
quality companies for more than 20 years. Based in San Francisco, Genstar works
in partnership with its management teams and its network of operating
executives and strategic advisers to transform its portfolio companies into
industry-leading businesses. Genstar manages funds with total capital
commitments of more than $5 billion and targets investments focused on selected
sectors within the financial services, software, industrial technology, and
health care industries.