Participants June 9, 2020

401(k) Investors Barely Touched Their Accounts in May

Those who did trade favored fixed income, according to the Alight Solutions 401(k) Index.

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May was the lightest month of trading activity among 401(k) investors in 2020, according to the Alight Solutions 401(k) Index. On average, a mere 0.018% of balances were traded daily, down from 0.023% in April and 0.078% in March. Throughout the month of May, 401(k) participants traded 0.11% of their balances. Year-to-date, they have traded 1.72%. There were no above-normal trading days.

401(k) investors continued to favor fixed income, with those trades dominating 13, or 65%, of the total trading days in the month, and equities leading for seven days, or 35%.

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Asset classes with the most trading inflows in May were bond funds, taking in 31% of the inflows, valued at $73 million, followed by international equity funds (23%; $53 million) and money market funds (19%; $44 million).

Asset classes with the most trading outflows in May were target-date funds (TDFs) (48%; $113 million) and large U.S. equity funds (28%; $65 million).

Asset classes with the largest percentage of total balances at the end of May were TDFs (29%; $61.6 billion), large U.S. equity funds (25%; $53.5 billion) and stable value funds (11%; $22.6 billion).

Asset classes with the most contributions in May were TDFs (46%; $513 million), large U.S. equity funds (21%; $230 million) and international equity funds (7%; $76 million).

During the month, small U.S. equities rose 6.5%. Large U.S. equities rose 4.8%, international equities were up 3.3% and U.S. bonds were up by 0.5%.

Products June 9, 2020

AIG Retirement Services Offers Help Navigating Student Loan Forgiveness Programs

Employees of nonprofit and public sector AIG Retirement Services clients that are offering the new student debt solution will be able to find Savi’s technology on their retirement plan website.

Reported by

AIG Retirement Services, a retirement plan provider for tax-exempt and public sector employers, announced it has engaged Savi, a social impact technology firm, to provide nonprofit and public service employees with an online tool to navigate government loan forgiveness programs.

The firm notes that Public Service Loan Forgiveness, a federal program that eliminates all remaining federal student debt after 120 months of qualifying payments have been made, has experienced high rejection rates for applicants, with less than 2% of applications being approved as of April 30. For many, it says, this is due to incomplete applications and a lack of understanding of program requirements.

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AIG Retirement Services and Savi seek to improve and simplify the experience for employees by providing an end-to-end digital process that helps:

  • determine qualification for student loan forgiveness;
  • identify potential savings;
  • navigate through enrollment;
  • maintain eligibility; and
  • provide a clear path to applying for full forgiveness.

Employees of nonprofit and public sector AIG Retirement Services clients that are offering the new student debt solution will be able to find the technology on their retirement plan website. This service also provides Savi’s analysis of government rules concerning student loan debt, including provisions in the Coronavirus Aid, Relief and Economic Security (CARES) Act.

“The new program can chart the path for nonprofit and public service employees to loan forgiveness, helping to improve their financial future and creating enhanced flexibility around other goals, including saving for retirement,” says Rob Scheinerman, chief executive officer of AIG Retirement Services.

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