Data & Research February 19, 2015

Written Retirement Plans Are Better Motivators

New LIMRA Secure Retirement Institute research suggests a formal written plan can make a big difference in creating a secure retirement through the defined contribution system.
Reported by

The top financial concern among Americans remains having enough money for a comfortable retirement, according to a new analysis on the LIMRA Secure Retirement Institute’s web portal, “A Written Retirement Plan Can Make a Big Difference.”

Despite this high level of concern, four in 10 Americans are not confident they will have a secure retirement. Part of their concern may involve a lack of sufficient regular saving, LIMRA notes, as 80% of workers acknowledge they need to save more to be on track for their retirement. 

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

LIMRA’s survey results show nine out of 10 savers say a written plan helps them to better understand their goals, while three out of four feel they are more likely to follow a written retirement plan.

Not surprisingly, LIMRA reports that retirees and pre-retirees who work with a financial professional are twice as likely to have developed a written plan for generating income in retirement. They are also more likely to have done comprehensive planning, such as calculating total retirement assets across savings plans or estimating retirement income and expenses, LIMRA says.

Further highlighting the important of professional advice, 71% of people who work with an adviser say they are confident about saving enough for retirement. Only 43% who do not work with an adviser express this confidence, LIMRA notes. 

Additional research and analysis is available at www.limra.com/secureretirementinstitute/. 

The Markets February 19, 2015

Northern Trust Agrees to Settle Securities Lending Suit

Northern Trust wants to put an end to litigation that has been ongoing since 2009.
Reported by

Northern Trust Investments has agreed to pay $36 million to settle a lawsuit claiming it violated the Employee Retirement Income Security Act (ERISA) in handling retirement plan assets invested in its securities lending program. 

The lawsuit alleges that Northern Trust breached its duties to retirement plans and their participants and beneficiaries by imprudently investing collateral received from securities lending activities and by charging impermissibly high fees. Plaintiffs Joseph Diebold, representing the ExxonMobil Savings Plan, and Paul Hundt, representing the Texas Instruments 401(k) Savings Plan, filed the lawsuit in 2009, alleging Northern Trust Investments and Northern Trust Co. had ignored warning signs indicating a different investment strategy was in order. 

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The proposed settlement has been achieved on behalf of retirement funds that invested in Northern Trust’s Commingled Lending Funds, which participated in Northern Trust’s securities lending program, during the period January 1, 2007, through October 31, 2010. 

According to the settlement agreement, Northern Trust is entering into the agreement solely to eliminate the burden, expense and distraction of further litigation. The settlement is not an admission of any guilt. 

The final settlement in Diebold v. Northern Trust Investments is conditioned on final approval of the partial settlement of a similar case, Louisiana Firefighters’ Retirement System, et al. v. Northern Trust Investments, N.A., et al.

«