advertisement
  • One on One
    Subscribe
     

Kennedy Corner

  • »Time To Simplify and Get Organized (Well, At Least Your Cloud Services)
    The practice of adding cloud services in silos and based on specific department needs often results in overlapping and many different contracts with the same vendors.
  • »Riding the Waves of Healthcare Risk
    The modern healthcare system is much like the ocean—stormy, choppy, and hostile at times, soothing, calm and inviting at others. For surfers, the more waves you go for, the more you will catch, and the more likely you’ll “wipe-out.”
  • »The Department of Defense Wants a New Mantra
    “Do more with less.” It’s become a tired refrain that U.S. Department of Defense leadership is all too familiar with hearing from all directions, whether it is their direct superiors, Congress, or the Executive.
  • »Things Go Wrong
    Things go wrong. Anyone who plays poker knows this. One moment you’re on the verge of a royal flush, and the next, you pull a six of diamonds, and you’re called. Things do indeed go wrong.
  • »The Next Big Thing
    Consultants are always looking for the next big thing, the innovation that will see clients storming through their gates, bypassing pesky procurement departments, and writing blank checks for the magic mousetrap that whitens and brightens and cleans windows, too.
  • »JP Morgan and The Whale: A Parable
    After a tumultuous period of banking hyper-regulation after 2008, no one would have suspected in 2012 that JP Morgan, the world’s largest bank, had ineffective controls in place that left the company flat-footed when its “rogue” trader had taken untenable, long-term positions on Credit Default Swaps.
» View all

Travel Advisory

  • »Marriott Goes Big in NYC
    Marriott International, Inc. and G Holdings opened what they’re calling an “iconic addition” to the New York skyline, a combined 378-room Courtyard hotel and 261-suite Residence Inn hotel in midtown Manhattan. The $320 million, 68-story property is the tallest single-use hotel in North America.
  • »Best Places to Stay: Travel Bounces Back
    Consultants are on the road again, at least according to the results of our annual Best Places to Stay survey.
  • »FAA: ‘Staffing Challenges’ Causing Delays
    In case you haven’t noticed, non-weather related delays at U.S. airports are on the rise. (And I know you’ve noticed that weather-related delays are definitely on the rise.)
  • »Hilton’s Building Boom
    Coming off a whirlwind 2012, Hilton Worldwide is the fastest growing global hospitality company by number of rooms.
» View all

Book It!

  • »Excerpt: Procurement as Productivity
    The following is an excerpt from the book Procurement 20/20: Supply Entrepreneurship in a Changing World by a quartet of McKinsey & Company consultants—Peter Spiller, Nicolas Reinecke, Drew Ungerman and Henrique Teixera.
  • »Review: The Risk-Driven Business Model
    Most companies focus their innovation on new products.
  • »Review: Lead Positive
    Today’s business leaders face intense pressure to deliver results in an uncertain, chaotic, and high-stress business environment.
  • »Review: Step Up
    No matter what your title or place in the organization chart, you have the potential to be a leader.
  • »The Three Rules
    Earlier this year, Deloitte Consulting’s Mumtaz Ahmed and Michael Raynor published The Three Rules: How Exceptional Companies Think. The authors set out to answer what was, in their mind, the ultimate business question—how do some companies achieve exceptional performance over the long haul?
  • »Thinking in New Boxes
    Creativity is key if you are to thrive in a time of accelerating change, according to The Boston Consulting Group’s Luc De Brabandere and Alan Iny.
» View all

Security Check

CAPTCHA Image
OK
Cancel
New Image
  • Home
  • Columns
  • Interviews
6 6 2012
»One on One with Deloitte Consulting’s Stacy Sandler

Stacy Sandler, Principal, Deloitte ConsultingDeloitte Consulting’s Principal Stacy Sandler’s focus is assisting providers of retirement with their business issues and opening new avenues through which to differentiate their business offering. Deloitte’s recently completed annual benchmarking survey examines the climate of 401(k) plans, and how economic pressures like rising healthcare costs, high personal debt and low savings are painting a less-than-rosy picture of the state of retirement readiness for millions of Americans. Sandler shared some of her insight on the results of the survey and more.

Consulting: Of the data points revealed about the state of the 401(k) world in Deloitte's benchmarking survey, which do you think is the most significant or telling in terms of the economic era we're in?

Sandler:
The most significant data point is that only 15 percent of plan sponsors believe most employees will be financially prepared for retirement. The reason that this is significant is that it is relatively unchanged over the course of more than ten years that we've performed this survey. The picture is not improving, and we continue to see life expectancies increase, added uncertainty over the future of social security and the seemingly continuous rise of the cost of healthcare. In addition, when asked to rank the No. 1 top improvement that record keepers can help plan sponsors with—"Improve participant readiness for retirement"—this also validates the concern for employee financial preparedness—and the assistance that Plan Sponsors are longing for to help their employee population.

Consulting: At a time like this when we're sort of teetering toward full-on economic recovery but it's going perhaps slower than we'd like, is this a time for plan participants to double down and keep funding their 401(k)s, or is this a time to rein it in and use that money for household expenses, etc.?

Sandler:
This is a very difficult question because it varies from one individual to the next. Some would argue that we're not close to 'full-on economic recovery' given the situation that we're watching unfold with the Eurozone and broad economic slowdowns in many other parts of the world. Many are still unemployed or underemployed and others have unfortunately needed to access their 401(k) accounts in lean times. Certainly the idea is to buy in when prices are low, and some participants are doing just that. Others are still feeling snake bit over the recession and aren't ready to jump back in just yet. That said, given that 401 plans are meant to be a long term savings plan, continuing to fund would be beneficial.

Consulting: The numbers shown in the benchmarking survey show the majority of plan participants are between 41 to 50 years old, why aren't more young people participating in their companies' 401(k) plans?

Sandler:
While we didn't specifically survey plan participants, it's generally accepted that the majority of young people who don't participate in their 401(k) plans just feel that retirement is too far off to be concerned. Others lack the education necessary to understand and get involved with their 401(k).When we asked plan sponsors what the primary barriers were to improving overall plan effectiveness, the top choice was lack of employee understanding with the second choice being ineffective employee communications.

Consulting: What are some trends emerging in terms of employers enticing their employees to participate? Are matching contributions on the rise/fall?

Sandler:
Matching contributions have been on the rise, but this is often due to changes in the defined benefit program (i.e., reducing/freezing pension benefits while improving defined contribution benefits). Our survey this year noted among employers considering a change to employer contributions in the next year 56 percent are considering increasing their match. Many employers are adding other features to their 401(k) plans in an effort to provide additional tools for the plan participants. These may include investment advice, managed accounts, self-directed brokerage windows and Roth 401(k) contributions. What we find though is that too often these features are under used, often with less than 10 percent of participants using the new features.

Consulting: What are some pitfalls to avoid when managing your own account?

Sandler:
Too often we see participants react out of fear or emotion when they see a dip in the market. The impulse is to transfer balances out of equities and into stable value options. When the market picks back up, the instinct is to transfer back into equities in search for higher returns. The result is a "buy high / sell low" approach which is exactly the opposite of what we should aim for as savers. Participants should invest for the long term and regularly review and rebalance their investments accordingly. They should also take advantage of the various education and advice tools that are available from the plan.
»Related Articles
  • Human Resources
  • Interviews
  • One-on-One
advertisement

CMAG Careers

CMAG Subscribe Ad

 

  • Platinum Sponsors:

    BCG
    Deloitte

    Gold Sponsors:

    Mesirow

    Ernst & Young
    PwC

    Silver Sponsors:

    Capco
    KPMG

    Alix Partners
    ZS

    AonHewitt
  • Register

    Gold Sponsors:

    BCG
    Ernst & Young
    PwC
    Mesirow

    Silver Sponsors:

    IBM
    Mercer
    Capco
    Deloitte
  • Featured Speakers:

    Joseph Kornik

    Joseph Kornik
    Publisher and Editor-in-Chief,
    Consulting magazine

    Brian Murphy

    Brian Murphy
    Chief of Staff, Point B

    Brian Jacobsen

    Brian Jacobsen
    General Manager, Slalom Consulting

    Tom Rodenhauser

    Tom Rodenhauser
    Managing Director, Advisory Services, Kennedy Consulting Research & Advisory

    Sponsor Speaker:

    Drew West

    Drew West
    Director, Product Marketing,
    Deltek

    Sponsored By:

    Deltek Logo
|
»

Searching

page loading