Practice

NEW YORK - Selling retirement income guarantees after a recession is like selling flood insurance after a flood. Timing is everything, and currently the timing could not be better.

Forty-six percent of those leaving a job in 2008 tapped into their 401(k), maintaining an “alarmingly high” rate of people cashing in since 2005, Hewitt Associates said. Sixty-percent of those cashing in were in their 20s, and 33% were in their 50s.

The Senate Special Committee on Aging held a hearing Wednesday to examine the risks and potential conflicts of interest inherent in target-date funds.

The percentage of Americans at risk of having to cope with lower living standards in retirement has risen to 51%, seven percentage points higher than the 44% last measured in 2007, the Center for Retirement Research at Boston College found. And the figures would be even higher if they accounted for healthcare and long-term care, the center said.

Eighty-four percent of workers who are automatically enrolled in a 401(k) plan stick with the plan, up from 77% in 2007, Charles Schwab found. Participation among all plans rose to 77%, up from 73% in 2007.

Noting the urgency and immensity of their task, global financial leaders are frantically making small and large changes to U.S. Generally Accepted Accounting Principles (GAAP) and international financial accounting standards (IFRS) to make them more similar, and the Securities and Exchange Commission has recently made a single set of standards a high priority.

Following up on President Obama's mandate for change, regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission recently crafted a report that details their plans to harmonize the regulation of futures and securities.

Prudential Financial on Oct. 18 launched its “Morse Code SOS” advertising campaign touting the 401(k) administration and healthcare insurance services it offers U.S. companies.

Russell Investments has introduced Russell Enhanced Asset Allocation, which using forecasting models to identify unsustainable movements in the market and map out a plan to maximize returns while limiting risk and maintaining adequate liquidity. The strategy covers 11 geographic regions and 11 asset classes and produces 114 asset class pair combinations.

Stunned by trillions of dollars of losses in the financial crisis, Americans will be investing significantly less in the future, according to a new survey by AlixPartners. Forty-nine percent of the 1,000 people the consulting firm surveyed have either stopped or reduced investing in stocks or mutual funds, 26% have no intention to return to these bedrock financial vehicles in the next three years, and another 27% were unsure whether they had the endurance to return to the markets in that timeframe.