Benefits January 24, 2005

Schwab: K Plan Advice Helps Beef up Deferrals

January 24, 2005 (PLANSPONSOR.com) - K plan participants using managed account and advice offerings from Schwab Corporate Services more than doubled their average savings rate to 9.57% of eligible income in 2004, according to a Schwab news release.
Reported by

The news release said that 84% of these participants enrolled in managed accounts that provide ongoing account monitoring and automatic rebalancing. Schwab Retirement Plan Services, Inc. (SRPS) offers managed account and advice services at no extra cost to Schwab K plans.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Participants in Schwab plans have access to personalized advice online, by phone or in person, including recommendations specific to the core investment fund choices available in their plan and specific recommended savings rates, the company said. Participants can also elect managed accounts with annual rebalancing. provided by GuidedChoice.

“We know that when it comes to retirement planning, many individuals aren’t sure how much they need to save or how to invest. We offer those answers and the opportunity to discuss them with an investment professional. Clearly, many of our participants prefer this type of one-on-one relationship,” said Trish Cox, SRPS chief operating officer, in the news release.

Cox noted that previously, the average savings rate for these participants was 4.57%, well below the overall average for Schwab’s 401(k) participants (7.15%) and the national average (7%).

Investing January 22, 2005

Global Funds Grow, Domestic Shrink as Trends Continue in December

January 21, 2005 (PLANSPONSOR.com) - Inflows into stock mutual funds were $12.4 billion in December, half of November's inflows due to seasonally light activity.
Reported by

The Lipper FundFlows Insight Report for December shows that stock funds took in $6.2 billion in the last month of the year, with mixed-equity funds bringing in another $6.2 billion, bringing the total to $12.4 billion.

This movement reflected caution and an overseas appetite for investors, according to the report (See Money Market, World Equity Funds Strong Draw in November ). This appetite was indicated most prominently by the $6.8 billion inflow into world equity funds, compared to only a $900 million inflow into US diversified funds. The domestic sector actually saw an outflow of $1.7 billion on the month.

Get more!  Sign up for PLANSPONSOR newsletters.

US Large-cap funds saw the biggest outflow on the month, posting losses of $7.9 billion. Multi-cap funds saw the greatest inflows at $5.2 billion.

Bond funds lost out on the month, posting outflows of $2 billion. Municipal bond funds’ flows were proportionally more negative then those of taxable-bond funds, according to the report. Assets in municipal bonds are only 38% of taxable-bonds, but both posted $1 billion outflows on the month. Breaking it down, long-term bonds actually gained $100 million on the month, but this gain was offset by a $2.1 billion outflow in short and intermediate bonds.

Money market funds also suffered in December, posting outflows of $5.5 billion. This consisted of $10.5 billion outflows in the retail class and $5 billion inflows in the institutional class.

«