Benefits February 12, 2007

Survey: Workers Embrace Alternatives to Traditional Retirement

February 12, 2007 (PLANSPONSOR.com) - One quarter of Americans believe they will have a traditional retirement and 41% say they will continue working, but will work less hours, according to a recent survey by Adecco.
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The survey of 527 workers by the workforce solutions firm also found that 18% of respondents planned on retiring from their current career and trying something different and 12% predicted they will retire early, according to a press release on the survey.

“American workers want to contribute well into their older years, which not only enables them to continue earning a salary, but also helps companies maintain a high level of seasoned talent and institutional knowledge,” said Bernadette Kenny, senior vice president of Human Resources for Adecco North America, in the press release. “Companies who tap the older workforce will have a competitive advantage as the talent war continues to unfold,” as workers begin leaving the workforce over the next 15 years.

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The survey also looked at how workers viewed their career opportunities, with 85% of American workers saying their career options are “promising.” That number rose even higher for business owners and those in management positions.

Men reported being more optimistic (88%) than women (81%) about their career opportunities.

The results are based upon telephone interviews conducted January 12-15, 2007 with a representative sample of 527 employed adults who were identified in an ORC CARAVAN survey of a nationally representative sample of 1,022 adults age 18 and over (507 of whom are men and 515 are women).

Administration February 10, 2007

NASD Fines Ameriprise Regarding 529 Plan Sales

October 26, 2005 (PLANSPONSOR.com) - NASD announced today that it has ordered Ameriprise Financial Services, Inc. of Minneapolis, formerly American Express Financial Advisors, to pay a fine of $500,000 for failing to adequately supervise the firm's sales of 529 plans.
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NASD said in its announcement that this is the first enforcement action resulting from its sweeping examination of the sales of 529 college savings plans.   NASD noted that federal tax advantages exist for all 529 plans, but also 26 states and the District of Columbia offer tax incentives as well.   The findings against Ameriprise concerned the consideration of state tax advantages when selecting the appropriate plan for customers.

During the period from May 2001 to October 2003, Ameriprise sold only one 529 plan – sponsored by the state of Wisconsin.   Approximately 32% of its sales, over $200  million, were to customers who lived in one of the tax-advantaged 529   plan jurisdictions, according to NASD.   Investors in five of those states (New Mexico, South   Carolina, Illinois, Colorado and West Virginia) could have received  unlimited state income tax deductions for investments in their home   state’s 529 plans. Yet, through the end of 2004, Ameriprise sold over   $55 million in the Wisconsin 529 plan to customers residing in those states. As a result, those Ameriprise customers did not receive state income tax benefits available to them.

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NASD found that the firm’s procedures during this period   were not reasonably designed to achieve compliance with suitability   obligations in the sale of 529 plans.   Specifically, Ameriprise did not have  adequate procedures in place to take state income tax benefits into   account when determining the suitability of 529 sales.   They did not require that registered  representatives consider the state income tax benefit that might be   obtained by purchasing an in-state plan and weigh that benefit against   other benefits that might be provided by a recommended out-of-state plan, such as investment performance, investment choices, fees and   expenses, or other factors.

In addition to the $500,000 fine, NASD ordered Ameriprise to pay around $750,000 to compensate more than 500 client accounts.   The company neither admitted nor denied the allegations, but consented to NASD findings.

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