Investing January 23, 2002

Mutual Fund Flows Strong in 2001

January 23, 2002 (PLANSPONSOR.com) - Despite a slow December, a weak equity market and the events of September 11, a record amount of new money flowed into mutual funds in 2001, according to data from Lipper Inc.
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Over the year, $434.5 billion of new money poured into mutual funds, with:

  • $33.6 billion going into stock funds
  • $75.6 billion going into fixed income funds
  • $325.3 billion moving into money funds.

December Data

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According to Lipper, in December:

  • equity funds took in $1.7 billion
  • investors withdrew $900 million from bond funds
  • money market funds saw outflows of $28.4 billion.

Among stock funds over the month:

  • diversified domestic funds had inflows of $3.1 billion
  • sector funds saw outflows of $2 billion
  • investors withdrew $1.3 billion from world equity funds
  • science and technology funds – the month’s biggest loser – saw a leakage of $1.2 billion.

In addition, value funds attracted $7 billion in new money over the month, while growth funds had an outflow of $5.4 billion.

Benefits January 22, 2002

Sign-on Bonuses not on Endangered List

January 22, 2002 (PLANSPONSOR.com) - Despite the economic slump, the majority of companies have made no changes to their sign-on bonus program, a survey finds.
Reported by

According to a late December 2001 survey by WorldatWork, 62% of the sample hasn’t changed their sign-on bonus programs. They have not even made changes in the amounts of a sign-on bonus.

Bonus Levels

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The survey found that in all employee categories, with the exception of clerical staff, more than 56% of responding companies are still using a sign-on bonus plan.

In fact:

  • over 85% have a sign on bonus plan at the executive level
  • a slightly higher number give sign on bonuses to upper management
  • three-quarters give them to middle management
  • over 80% offer them to professional staff
  • some 56% give them to sales staff
  • IT staff at 75% of companies are given such bonuses, versus only 17% of clerical staff.


Generous

And companies are not skimping either. The survey found that:

  • over a third of the companies report providing between a $1,000 – $4,999 bonus
  • slightly less give between $5,000 – $9,999.

In the executive ranks:

  • only 8% provide more than $50,000
  • but 37% report providing between $25,000 – $49,999.

The majority, 85% provide the bonus in the form of a flat dollar amount.

According to the survey, only a third of companies protect themselves paying a portion of the bonus on date of hire and the remainder after a set period of time.

But, while at roughly 49% of the companies, employees forfeit the bonus if they leave the company within the first year, at 28% of the sample, employees get the cash with no such strings attached.

The sample comprised 348 companies.


 

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