Moving the Needle

What do the data say about the role MEPs and PEPs can play in getting more people access to employer-provided retirement accounts?

About half of U.S. private sector workers are covered by an employer-sponsored retirement plan. How many employers might consider joining a pooled plan in order to provide this benefit? Data below from the Center for Retirement Research at Boston College explores the numbers.


Reasons for Not Planning to Offer a Retirement Plan, 2023

Cost
52%
Admin burden / barriers
38%
Employee prefer wages
33%
High employee turnover
37%
Revenue stability / business size
60%
Source: Center for Retirement Research (2023)

Number of PPP Filings, January 2020 – October 2023

2020
24
2021
142
2022
81
2023
66
Note: As of October 17, 2023. Source: U.S. Department of Labor (2023b).

Likelihood of Joining a MEP, PEP, or Group of Plans as an Alternative, 2022

  • Very likely
  • Somewhat likely
  • Not too likely
  • Not at all likely
Source: Transamerica Institute (2023)

Total 401(k) Costs as a Percentage of Plan Assets, by Asset Size

PS-Feb24-OSC6-chart_p2.png

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Plan assets 10th percentile Median 90th percentile
<$1mm 0.20 1.02 2.40
$1mm – $10mm 0.47 0.96 1.56
$10mm – $50mm 0.40 0.72 1.09
$50mm – $100mm 0.32 0.57 0.83
$100mm – $250mm 0.17 0.46 0.66
$250mm – $500mm 0.17 0.41 0.59
$500mm – $1b 0.18 0.37 0.54
>$1b 0.13 0.26 0.43

Notes: Total plan cost includes asset-based investment management fees, asset-based administrative and advice fees, and other fees from the Form 5500 and audited financial statements of ERISA-covered 401(k) plans. Total plan cost is computed only for plans with sufficiently complete information.
Source: BrightScope and Investment Company Institute (2023)


Familiarity with Different Retirement Plans, 2023

Very/ somewhat familiar
Not too familiar/ Never heard of
401(k)
87%
13%
SIMPLE
51%
49%
SEP
37%
63%
MEP/PEP
21%
79%
Source: Center for Retirement Research (2023)

Tim Buckley, Vanguard CEO, to Retire in 2024

CIO Greg Davis takes on president's title as search to replace the longtime leader begins.

Tim Buckley

Tim Buckley, chairman and CEO of The Vanguard Group, will step down at the end of 2024, the Valley Forge, Pennsylvania-based firm with $8.7 trillion in global assets under management announced Thursday.

Buckley, a 33-year veteran of the firm, will retire from his roles after helming the firm for six years and overseeing its continued leading position among asset managers, in part due to the strength of its passive investment strategies. Vanguard currently sits as the second-largest asset manager in defined-contribution-only investments at $1.61 trillion, just behind BlackRock Inc.’s $1.16 trillion assets under management, according to PLANADVISER’s 2023 DCIO benchmarking survey. PLANADVISER, like PLANSPONSOR, is owned by ISS STOXX.

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Vanguard’s board of directors has started a search of both internal and external candidates to replace Buckley, who was with the firm for a total of 33 years. The firm also announced that Chief Investment Officer Greg Davis has been appointed to the additional role of president of the firm, effective immediately.

Vanguard noted that, under Buckley, the firm expanded its client base by “tens of millions to more than 50 million investors globally” and grew total AUM by more than 80% to $9 trillion. Buckley also oversaw an expansion of advice offerings, digitization of the client experience and expansion of investment products outside of the U.S. to the Europe, Australia, Canada and Latin America.

Buckley joined Vanguard in 1991 as founder John Bogle’s research assistant. In 2001, he became a member of Vanguard’s senior leadership team as head of the information technology group. He later led the personal investor division and then served as CIO before being named CEO in 2018. He was named chairman in 2019.

“Thirty-three years ago, I was lucky to join a company that believed in giving investors a fair shake as they saved for retirement, for their kids’ college education or for their dream home,” Buckley said in a statement. “In my seventh year as CEO, we have scaled our mission to more than 50 million investors, and our team is just getting started. I have been passionate about developing the next generation of leaders, and I look forward to those leaders elevating Vanguard to new heights.”

Current CIO Davis will take on an expanded role as president, effective immediately. He will be responsible for Vanguard’s investment management, retirement business and services for financial adviser clients, overseeing the majority of Vanguard’s fund and exchanged-traded-fund distribution.

Davis is a 24-year veteran of the firm and was appointed CIO and global head of the investment management group in 2017. He oversees $8 trillion in global assets managed by Vanguard’s fixed income, equity index and quantitative equity groups.

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