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Retirement Planning > Retirement Investing

Survey Reports: Retirement Plan TPAs, the Plan Match, Female Execs, High-Deductible Health Plans, LTC

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The typical retirement plan administration firm that belongs to the American Society of Pension Professionals & Actuaries has 16 employees and generated $1.5 million in annual 2009 revenue.

ASPPA, Arlington, Va., says about 150 retirement plan third party administrators (TPAs) participated in the survey.

The participating TPAs administer about $329 million in plan assets each and collect an average of about $500,000 in advisory and brokerage revenue.

The average case administered by the TPAs has 43 lives and $1.2 million in assets. (Allison Bell)

In other survey news:

- Principal Financial Group Inc., Des Moines, Iowa (NYSE:PFG), says employers can increase overall 401(k) plan participant contributions by increasing the employees’ target-deferral rate while keeping the employer’s contribution at a fixed percentage of income.

Principal has published this finding in a summary of results from an analysis of about 6,560 401(k) contracts that show a stated match formula. The plans have a total of about 116,000 participants.

When the employer changed the match formula to 50% of up to 4% of pay, from 100% of up to 2% of pay, the average participant contribution rose to 5.6%, from 5.3%, and the total contribution — including the employer match — rose to 7.6%, from 7.3%.

Similarly, when the matching formula is changed to 25% of up to 8% of pay, from 100% of up to 2% of pay, the total contribution increases to 8.8%, from 7.6%. (Warren S. Hersch)

- Researchers at the MetLife Mature Market Institute, Westport, Conn., an affiliate of MetLife Inc., New York (NYSE:MET), and the Women’s Institute for a Secure Retirement, Washington, say middle-market women may be more interested in financial advisors who are familiar with a wide variety of financial tools, and that higher-income women are more interested in advisors who can take a long-term view of financial needs.

The researchers have published data on female prospects’ views in a summary of an online survey of U.S. women ages 45 to 70 with personal incomes of $75,000 or more or household incomes of $100, 000 or more. Survey participants were employed full-time; considered themselves to be professionals, managers, executives, middle manager or self-employed; and said they participate in household financial decisions. The researchers did not release the number of participants.

Both women in the $75,000-$99,000 household income category and in the $200,000-and-over category ranked “feeling of trust and respect” as the top factor when choosing an advisor.

But 47% of the owmen in the $75,000-$99,000 category said “knowledge of financial tools” was an important factor, and 43% listed “ability to explain financial concepts” as a key factor. Only 24% of the women in the $200,000-and-over category were looking of knowledge of financial tools, and only 25% said they would pick an advisor based on explanatory skills.

About 48% of the women in the $200,000-and-over category said they were looking for an advisor who takes a long-term view of the client’s needs, compared with just 25% of the women in the $75,000-$99,999 category. (Allison Bell)

- Researchers at the Employee Benefit Research Institute (EBRI), Washington, say U.S. residents with high-deductible health coverage are about twice as likely as residents with traditional coverage to say they have put off seeking medical care due to concerns about cost, whether or not they have personal health accounts.

The EBRI have included figures on health care access problems in a summary of results from a recent online survey of 4,508 private insured U.S. adults ages 21 to 64.

About 5% of those privately insured adults have a high-deductible health plan along with a health savings account or health reimbursement arrangement, and 14% have a high-deductible health plan without having a personal health account.

EBRI classified a plan having a deductible of $1,000 or greater for an individual and $2,000 or greater for a family as a high-deductible plan.

The percentage of traditional plan enrollees who said they had delayed or avoiding care due to cost fell to 12% this year, from 15% in 2009. For enrollees with high-deductible coverage, the percentage who delayed or avoided getting care due to cost fell to 28%, from 30%, for high-deductible plan enrollees without health accounts and rose to 23%, from 22%, for high-deductible plan enrollees with health accounts.

For enrollees with annual household incomes over $50,000, the percentage reporting cost-related delays in getting care fell to 10%, from 14%, for traditional plan enrollees; decreased to 24%, from 25%, for high-deductible plan enrollees without health accounts; and increased to 23%, from 20%, for high-deductible plan enrollees with health accounts.

The percentage of enrollees who said they are very or extremely satisfied with their health coverage fell to 60%, from 66%, for traditional plans; to 35%, from 40%, for stand-alone high-deductible plans; and to 42%, from 52%, for high-deductible plans combined with personal health accounts. (Allison Bell)

- New York Life Insurance Company, New York, has found that baby boomers are more likely to recognize the advantages of having long term care (LTC) insurance than to own LTC insurance coverage.

When the company commissioned a survey of about 1,000 U.S. residents ages 46 to 64, 87% of the participants said they believe having LTC insurance helps protect families from having to pay for care, 85% said it can provide peace of mind, and 70% said it can help a policyholder leave an inheritance.

About 72% of the boomers whose parents had LTC coverage and used it called LTC coverage a good value

About 64% of the boomers whose parents have LTC coverage said they would be likely to buy LTC coverage themselves, compared with 37% of the boomers whose parents do not have LTC coverage.

But only 9% of the survey participants who had dealt directly with parents’ LTC needs said they had individually bought LTC coverage, and 47% of all of the survey participants agreed with the statement that LTC insurance is “not worth the cost because you may never use it.” (Trevor Thomas)


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