Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Report: Massive 401(k) outflows on the horizon
BOSTON (6/9/14)--Credit unions and other financial advisers will have an opportunity to assist more members and consumers in financial planning and management, as defined contribution plans will experience seismic outflows as baby boomers retire, creating both opportunities, and real challenges.
 
That's the upshot of new analysis from Cerulli Associates that projects distributions from 401(k) plans will outpace new contributions by 2016.
 
"This has significant implications for asset managers and other financial services providers," said Bing Waldert, a director at Boston-based Cerulli. "Distributions create opportunities as money moves from employer-sponsored plans to IRAs. On the other hand, the allure of the defined contribution market fades as the stickiness of assets comes into question, and net flows decline or may turn negative for some asset managers."
 
In its report, "Evolution of the Retirement Investor 2013," Cerulli aggregates data on enrollees' contribution habits throughout their investing life cycle, examining IRA rollovers and enrollees' relationship with advisers as they cash out their 401(k)s and begin to allocate resources for retirement.
 
Cerulli's report suggests advisers redouble their efforts on increasing contribution rates with younger workers in order to counter the massive outflows following boomers into retirement.
 
Over 60% of workers under the age of 30 use their company match as a gauge of how much they contribute to their plans, suggesting that an increase in match would lead to increased contributions. Short of that, Cerulli says advisers will have to intensify their efforts to safeguard their sponsor relationships.


RSS print
News Now LiveWire
Falling #gas prices: Pros, cons for U.S. economy #NewsNow #Market http://t.co/XWwwERwe7e
14 hours ago
Members of Interstate FCU have voted to merge with Credit Union of Southern California https://t.co/yYeSWEG4GH
17 hours ago
.@InfinityFCU has named Liz Hayes as president/CEO. Hayes was formerly EVP and chief administrative offficer at @Affinity_Plus
17 hours ago
.@wpcu battles Speedway in round 3 of Dayton Brand Madness via @DBJnews http://t.co/EbQL5f9be8
19 hours ago
New at #NewsNow: Fed regulators approve new #QRM rule. http://t.co/Bdz5q43xjZ
19 hours ago