State Street Gives Retirees Access to Financial
Information
January 18, 2007 (PLANSPONSOR.com) - State Street
Corporation has come out with a Web-based tool, mypenpay.com,
that gives retirement plan participants direct and secure
access to personal payment information and account
transactions.
According to a company press release, State
Street will provide online 1099R tax forms instead of
participants having to call a benefits administrator for
lost forms.
Also, the Automated Stop and Reissue function
allows participants to initiate a stop payment on checks
that remain outstanding for a minimum amount of days from
the payable date as determined by the plan sponsor, and
the Online Check Images feature provides retirees with
the ability to view a front-and-back image of a paid
check issued within the prior 18 months.
Survey Finds IRAs not a Primary Retirement Savings
Vehicle
January 17, 2007 (PLANSPONSOR.com) - Newly released
results of a study from Fidelity Investments indicate
Individual Retirement Accounts (IRAs) are not generally being
used as a primary retirement savings vehicle and many
investors lack understanding about IRAs.
According to a press release from Fidelity, the
study results showed less than half (46%) of investors
surveyed are utilizing an IRA as part of their overall
retirement savings strategy. In addition, only 7% of
non-IRA holders surveyed said they plan to open an IRA
before the April 16 tax deadline.
Even current IRA holders surveyed were not fully
utilizing their existing accounts, with just 37% having
contributed for the 2006 tax year as of December 1, the
release said. Only 16% of respondents said they are
extremely/very likely to make a contribution before the
April tax filing deadline.
Fidelity suggested lack of knowledge and lack of
understanding about IRAs are barriers to IRA ownership.
Of the 500 IRA owners and 500 non-IRA owners it surveyed,
almost half (46%) of non-IRA owners said they believed
that opening an IRA account requires the maximum annual
dollar amount contribution. Additionally, 59% did not
know they could contribute to an IRA opened to accept a
rollover distribution from another source, allowing
consolidation of retirement savings in one place.
The study also indicated investor confusion about
contributing to both a 401(k) and an IRA, with only 52%
of non-IRA owners surveyed saying they knew they could
contribute to both in the same year. Also, 56% of
respondents overall and three quarters (74%) of non-IRA
owners did not know the correct 2006 contribution
limits.
Future Savings Habits
Only 26% of IRA owners and 31% of non-owners said
they are likely/very likely to make a lifestyle change,
such as cutting back on restaurant meals or takeout, in
order to save more for retirement next year.
Although 49% of non-owners indicated a lack of
money is one of the major barriers in saving more for
retirement, when presented with a hypothetical windfall
of $5,000, IRA owners said they would invest an average
of $2,200 for the long term, while non-owners said they
would invest just $1,250 on average. Additionally, of
those who would use the money for long-term savings, 49%
of non-IRA owners and 45% of owners said they would elect
to put the money into a bank account such as a CD or
savings account instead of an IRA or other tax-advantaged
retirement savings vehicle.
For the Fidelity study, interviews were conducted
online from November 21-30, 2006, by Northstar Research
Partners among 1,000 Americans who are the primary or
joint decision-maker for investments; have household
income of $40k or more; and are age 25 to 64 and not
retired.