September 25, 2001(PLANSPONSOR.com) - The combined
assets of the nation's exchange-traded funds (ETFs) fell by
4.5% in August to $72.09 billion at month-end, down from a
$75.52 billion at the end of July, according to the
Investment Company Institute.
Net issuance of ETF shares increased to $2.68 billion
from $2.58 billion the previous month. Gross issuance fell
to $5.42 billion from $5.62 billion in July, while
redemptions fell to $2.74 billion from $3.03
billion.
Broad-based domestic equity ETF assets fell to $63.24
billion at the end of August, compared to the $67,03 level
recorded at the end of the previous month, while domestic
sector/industry funds were up slightly to $6.75 billion
from $6.65 billion in July.
Global/international ETFs also climbed slightly, to
$2.09 billion from $1.84 billion the prior month.
The ICI report includes 33 broad-based domestic equity
ETFs, 33 domestic sector/industry focused funds, and 26
global/internationally-oriented ETFs.
Statistics contained in the monthly ETF report have been
obtained from information provided to ICI by
exchange-traded funds. Trust-issued receipts, such as
Holding Company Depository Receipts (HOLDRS), are not
included in the report because registered investment
companies do not issue them.
September 24, 2001 (PLANSPONSOR.com) ? Only about 8%
of all defined contribution plan participants will benefit
from expanded and enhanced contribution limits. And just 11%
of eligible DC participants are likely to benefit directly
from the so-called catch-up contribution provisions in the
new tax law, according to a report from the General
Accounting Office (GAO).
Higher earners were more likely than low and moderate
earners, and men were more likely than women, to benefit
directly from such an increase, according to the Report on
Private Pensions: Issues of Coverage and Increasing
Contribution Limits for Defined Contribution Plans, a
report commissioned by Representative William Coyne
(D-Pennsylvania) of the House Ways and Means Committee.
The report concedes that lower-income workers could
benefit if employers found the raised limits attractive
enough to add and/or enhance coverage in existing plans but
acknowledged that the real impact would be impossible to
determine.
The GAO found that increasing the percentage limit on
combined employer and employee contributions accounts for
half of the 3.1 million likely direct beneficiaries of an
increase in all three contribution limits.
Roughly 721,000 DC participants, or 11% of those
eligible, would likely benefit from the new catch-up
contributions designed to allow participants over age 50 to
set aside extra funds for retirement. The report noted that
here, too, higher earners were more likely to benefit from
the option.
Participation Rated
The GAO report found that in 1998, 47% of all workers
participated in a pension plan and 36% of all workers
participated in a defined contribution plan. More than half
(57%) of pension plan participants had low or moderate
earnings (less than $40,000 per year) and were men
(56%).
The report noted that low/moderate income workers were
much less likely to participate in a pension plan. Just 38%
of workers who earned less than $40,000 per year
participated in a pension plan, compared with 70% of those
who earned between $40,000 and $75,000/year.
According to the GAO, while half of all male workers
participated in a pension plan, just 44% of all female
workers did. The report noted several likely factors
explaining that disparity, including women workers’:
lower wages
greater concentration in part-time jobs, and
greater concentration in industries where few
employers offer pension plans.
Lower income workers were better represented in the DC
arena. While about 38.9 million workers, or 36% of all
workers, participated in DC plans, over half (54%) had
annual incomes of less than $40,000. Fifty-seven percent of
DC participants were men.