Posts Tagged ‘finance’

401(k) Balances Nearly Double Since Recession

June 24th, 2014, Comments Off.

401(k) account balances have gone up 93 percent, nearly double since the economic downturn in 2009, according to the latest research from the Principal Financial Group. While much of the increase reflects a rebounding market, the study found a significant increase in participation and savings rates since the market collapse, with account balances rising 17 percent in 2013 alone, to an average of $54,000.

“The economic downturn may finally be in the rear view mirror, but the lessons learned from the crisis are hopefully influencing our savings habits as a nation moving forward,” said Jerry Patterson, senior vice president of Retirement and Investor Services for The Principal. “While we still have a lot of work to do to help Americans save at more adequate levels for retirement, these numbers are a positive sign that retirement savings are moving in the right direction.”
The study, conducted by The Principal Knowledge Center, analyzed retirement plan participants savings and deferral changes among those enrolled in an employer 401(k) plan from 2008 to 2013.

More savings, more engagement

The study found a significant increase in the number of employees acting to increase their contributions or deferrals into their employer’s plan. The number of participants choosing to increase their contribution rates has increased almost 70 percent since 2009. The average employee-contribution rate has increased by 14 percent during the same period.
“Employees are making great strides towards signing up to save more, but employees still succumb to inertia and often set and forget their savings,” noted Patterson. “That’s one of the reasons we’re working with employers to design plans that use the power of inertia to help individuals continue to save at more adequate levels.”
Patterson says changing plan design features to help make savings more automatic can capitalize on the upward trend and accelerate overall participation and savings rates. The company recommends several key automatic plan design features, including:

  • Automatic enrollment with at least 6 percent elective deferral.
  • Automatic escalation of at least 1 percent per year up to 10 percent.
  • Sweep all existing employees into the plan at least one time at the default deferral rate.
  • Stretch the match by using a formula that incents employees to defer at higher levels in order to get the full employer match.
  • Use an asset-allocation choice as the qualified default investment alternative.

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By Ayo Mseka


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Companies Struggle to Fill Positions in Financial Services

May 22nd, 2014, Comments Off.

Skills Gap Plays Key Role in Hiring Difficulties

Nearly half of financial- services companies are struggling to fill certain positions, but the reasons behind their recruiting challenges are nuanced, according to a new survey by, CareerBuilder’s job site for finance and accounting professionals.

Forty-seven percent of financial-services firms have open positions for which they can’t find qualified candidates, the survey notes, and 49 percent cite a skills deficit as a reason for vacancies.

But among those concerned about a skills gap, several causes are seen as driving factors, including:

  • Gaps in expectations around wages: 37 percent
  • Job requirements that are above entry-level: 33 percent
  • Job requirements that are too specific: 32 percent
  • New and shifting technologies: 30 percent
  • Education gaps in particular areas: 29 percent

“Talent mismatches in finance and accounting are common and always changing. A potential solution is to target high-potential job seekers who may not meet the full experience requirements and bring them up to speed through training and development programs,” says Kevin Knapp, chief financial officer at CareerBuilder. “Compensation is a part of the equation, as well. The more in-demand a skill-set becomes, the more difficult it becomes for employers to attract talent at below-market rates. It is essential recruiters have access to supply and demand and compensation data for their region to ensure their strategies match current market realities.”

Boosting compensation is often the simplest way to enhance a pool of skilled candidates, according to the survey. Currently, only 19 percent of financial-services employers think their organizations offer “extremely or very” competitive pay. Forty-two percent said they would consider increasing compensation for tough-to-fill roles, and a third (32 percent) said they would not. Twenty-six percent said they’ve already increased compensation. Additionally, 38 percent feel they can pay employees less due to the high unemployment rate–a view that could actually deter truly in-demand workers from accepting roles.

The nationwide survey was conducted by Harris Poll on behalf of MoneyJobs between October 17, 2013, and November 6, 2013, among 190 hiring and human resources managers in the financial-services industry.


By Ayo Mseka


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