Launch Approaches for New S&P Index Classifications

May 26, 2000 (PLANSPONSOR.com) - Plan sponsors could soon see some performance shifts following the introduction of a new sector classification system. Standard & Poor's will spend the next four to five weeks validating a new calculation for the S&P indices using the Global Industry Classification Standard that the company launched with MSCI last August.

Originally planned for a June 1 launch, S&P will now release the new calculation process for the indices at the end of the validation period.

Standard and Poor’s has completed the five-year history using the new system. It will calculate both the new and old groupings for a transition period. The new classifications were developed to ease the investment research and management process for financial professionals worldwide.

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The re-classifications could impact performance comparisons against specific sectors within the indexes, though the securities within the indexes themselves will not change as a result of the reclassification.

The Global Industry Classification Standard consists of 10 economic sectors aggregated from 23 industry groups, 59 industries, and 123 sub-industries covering almost 6,000 companies globally. 

All Sectors now have a two-digit identification code, all Industry Groups have a 4-digit identification code, all Industries have a 6-digit identification code and all Sub-Industries have an 8-digit identification code.

Defined Contribution Assets Top $2 Trillion in 1999

May 25, 2000 (PLANSPONSOR.com) - Corporate defined contribution plans continued their steady growth in 1999, reaching $2.4 trillion in assets, according to the Spectrem Group.

The research and consulting firm said that defined contribution plans now represent half of all corporate retirement plan assets. Of the total, $1.4 trillion is made up of 401(k) plan assets.

The report also found:

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  • plan sponsors are overall content with their plan providers; only 2% of the 635 sponsors interviewed for the study indicated they would definitely switch vendors for a 15% fee reduction
  • mutual fund providers are still growing their market share and now control 39% of full-service plans
  • plan savings continue to shift into equity investments; assets in equity funds and company stock represented 63.5% of the total, up from 55.3% in 1997
  • with increasing concentration of assets in equities, performance will remain a key determinant of satisfaction among plan sponsors
  • recordkeeping is still a hot button for plan sponsors, with sub-standard service in this area a major reason for switching vendors.

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