Products February 24, 2016

T. Rowe Price Latest to Adopt SmartDollar Financial Wellness

Retirement plan clients of T. Rowe Price using the firm’s Retire With Confidence program can now access Dave Ramsey’s SmartDollar financial wellness solution. 
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T. Rowe Price announced that Ramsey Solutions’ SmartDollar will soon be available for integration into the Retire With Confidence program.

Upon plan sponsor election, participants will have access to SmartDollar’s online tools and interactive lessons “designed to help them pursue a better path to retirement readiness.” Full-service recordkeeping clients will be able to deliver the service to participants as soon as April 2016, according to T. Rowe Price.

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Diana Awed, head of product and marketing for T. Rowe Price Retirement Plan Services, says the addition of SmartDollar adds to the firm’s multi-channel approach to financial wellness and will “encourage employees to address their financial and budgeting needs, and ultimately help them build a stronger financial foundation.”

Speaking with PLANADVISER last year, Ramsey explained the SmartDollar program as “a common-sense approach about making and sticking to a budget, eliminating debt and building, at least initially, a $1,000 emergency fund. These are at the root of the program.”

With the announcement that T. Rowe Price would add SmartDollar, Brian Hamilton, vice president of Financial Wellness for Ramsey Solutions, adds that building emergency savings is key because it “frees up an individual’s largest wealth-building tool: their income. With so many Americans living paycheck to paycheck, it’s no wonder that participants are not on track for retirement.”

More information on T. Rowe Price’s Retire With Confidence and the SmartDollar integration is here. LPL Financial was an early retirement adviser to adopt SmartDollar as a client deliverable, along with retirement plan administrator Fifth Third Bank. 

Data & Research February 23, 2016

DC Participants Mostly Stayed the Course with Investing in 2015

However, levels of reallocation activity were slightly higher than the reallocation activity observed in the first three quarters of 2014., ICI found.

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Americans continue saving for retirement through defined contribution (DC) plans, according to the Investment Company Institute’s (ICI’s) latest study of retirement plan savers’ actions.

The vast majority of DC plan participants continued contributing to their plans. Only 2.5% of DC plan participants stopped contributing in the first three quarters of 2015, compared with 2.7% in the first three quarters of 2014.

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Most DC plan participants stayed the course in their asset allocations, as stock values declined over the first nine months of the year, according to ICI. In the first three quarters of 2015, 8.3% of DC plan participants changed the asset allocation of their account balances and 6.8% changed the asset allocation of their contributions. These levels of reallocation activity were slightly higher than the reallocation activity observed in the first three quarters of 2014.

DC plan withdrawal activity remained low and was in line with the activity in the first three quarters of 2014. Only 2.9% of DC plan participants took withdrawals in the first three quarters of 2015, compared with 3.1% during the first three quarters of 2014. Only 1.3% of DC plan participants took hardship withdrawals during the first three quarters of the year, similar to the pace observed in the same time frame a year earlier.

Loan activity was slightly lower than a year earlier, though still elevated compared with seven years ago. At the end of September 2015, 17.6% of DC plan participants had loans outstanding, compared with 18% at the end of September 2014. Loan activity continues to remain elevated compared with seven years ago (at the end of 2008, 15.3% of DC plan participants had loans outstanding).

According to ICI, assets in all DC plans represented more than one-quarter of assets in the total retirement market and accounted for nearly one-tenth of U.S. households’ aggregate financial assets at the end of the third quarter of 2015.

The study, “Defined Contribution Plan Participants’ Activities, First Three Quarters of 2015,” includes data from January through September 2015 and is based on DC plan recordkeeper data covering more than 26 million participant accounts at employer-based DC plans.

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