ADP: Job Applicant Background Checks up 12% in 2005

March 21, 2006 (PLANSPONSOR.com) - Although the number of employment background checks performed in 2005 by ADP Employer Services was up 12% over the year, inconsistencies between an applicant's material and the source were down slightly.

A news release said that ADP’s 2005 Screening Index showed that its Screening and Selection Services unit carried out 4.86 million checks, up from the 4.3 million in 2004 (See ADP: 16% Rise In Use of Background Checks in 2004 ).

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ADP said it found a data inconsistency in education, employment and credential verifications in 49% of the cases in 2005 – down a tick from the 50% found in 2004. The 2004 figure itself represented a 2% drop from 2003, according to the ADP data.

“The consistent rise in the number of background checks performed year after year is evidence of the diligence employers are taking in the recruitment and hiring process,” said Dean Suposs, General Manager of ADP Screening and Selection Services, in the news release.

ADP also reported that in 2005:

  • 5% of the criminal background checks revealed a criminal record in the last seven years.
  • 6% of the data inconsistencies discovered were received with negative remarks about the applicant
  • among the completed driving record checks, 24% had one or more violations or convictions. Five percent had four or more.
  • 46% of the completed credit report checks showed a judgment, lien or bankruptcy, or the employee had been reported to a collection agency.
  • 8% of the workers’ compensation inquiries revealed an existing claim.

For additional Screening Index statistics go here .

Vanguard Introduces New Target Funds

March 20, 2006 (PLANSPONSOR.com) - The Vanguard Group has announced plans to add five new Target Retirement Funds and change the funds' asset allocation models.

A Vanguard news release said it plans to add funds focusing on target retirement dates of 2010, 2020, 2030, 2040, and 2050.

The company asserted the new funds will complement its existing six target offerings. The Vanguard Target funds are broadly diversified “fund-of-funds” that gradually reduce stock exposure and increase bond exposure as the targeted retirement date approaches.

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“Shareholders are attracted to the simplicity and convenience of having a professionally managed, diversified portfolio of stocks and bonds in a single fund,” Vanguard CEO John Brennan, said in the news release. “The introduction of five new funds will enable investors to select a fund that more closely matches their investment time horizon.”

Brennan also announced in the news release that the company is changing the Target Retirement Funds’ asset allocation models.

The existing funds’ current asset allocation path will now provide increased exposure to equities over a longer period of time. The result will be a larger equity allocation of roughly 10 to 20 percentage points, depending on the fund. For example, the Target Retirement 2035 Fund will change its equity allocation to 90% from its current 75%, according to Vanguard.

Also, Vanguard Emerging Markets Stock Index Fund will be added to each of the funds (representing roughly 1% to 2.5% of assets), further diversifying their exposure to international markets.

Vanguard European Stock Index Fund and Vanguard Pacific Stock Index Fund will be added to the Target Retirement 2005 and Income Funds. In aggregate, international stocks will represent 10% of the 2005 Fund and 6% of the Income Fund.

Using methodology developed by Vanguard’s Investment Counseling and Research Group, assets in Vanguard Target Retirement Funds are invested in a combination of the following Vanguard mutual funds:

  • Vanguard Total Stock Market Index Fund,
  • Vanguard European Stock Index Fund,
  • Vanguard Pacific Stock Index Fund,
  • Vanguard Emerging Market Stock Index Fund,
  • Vanguard Total Bond Market Index Fund,
  • Vanguard Inflation-Protected Securities Fund, and
  • Vanguard Prime Money Market Fund.

The five new Target Retirement Funds, which will require a minimum initial investment of $3,000 for taxable and IRA accounts, are expected to have low expense ratios, Vanguard said.

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