Plan Sponsor Update
An e-communication from the publishers of Plan Sponsor Voice
 

Nationwide study says LSAs won’t increase participant savings
Matt Riebel becomes president of Nationwide Retirement Solutions
Public policy forum says healthcare costs, budget deficits threaten retirement security

Nationwide^® study says
LSAs won't increase participant savings

While many employees say they would consider contributing to a Lifetime Savings Account (LSA), the majority would likely not increase the total amount they currently save. While 75 percent of private sector employees and 65 percent of government employees would be likely to put money into an LSA, only 43 percent of private sector employees and 35 percent of government employees said they might increase their total savings if the LSA became available.

The majority of employees reported that the dollars would likely be diverted from their bank savings accounts rather than from their employer sponsored plans. Those indicating they were likely to use the LSA stated they would contribute between $500 and $3,000 annually.

This data is taken from a report published by Nationwide called America’s Retirement Voice:SM Employee and Employer Views on Current and Proposed Retirement Plans. The study focused on the Bush Administration’s retirement proposals, in particular the LSA, as well as general attitudes of private- and public-sector employees about current retirement plans.

The report was recently presented to the Panel of Advisors of the Nationwide^® Retirement Education InstituteSM. You can read more about this report and download a copy by clicking here.

For a summary of what’s in the report, read the media release by clicking here.

(back to top)

Nationwide Financial^® names Matt Riebel
president of Nationwide Retirement Solutions

Matt Riebel is the new president of Nationwide Retirement Solutions, Nationwide’s public-sector retirement plans business. He replaces Duane C. Meek, who was promoted to head Nationwide Financial’s new Retirement Plans segment, which includes public- and private-sector businesses. In his new role, Riebel will report to Meek.

Riebel has successfully led both retail and wholesale sales companies in previous positions. He began his career at Nationwide in 1992 as a regional vice president for the western United States, and after several positions, moved on to be named president of Nationwide Financial Institution Distributors Agency, Inc., Nationwide Financial’s bank sales unit.

You can read more about Matt Riebel's new role by visiting the News section of the Employer page of your plan Web site or www.nrsforu.com.

(back to top)

Nationwide^® sponsors forum
on retirement security

Nationwide sponsored a National Public Policy Forum on Retirement Security in Columbus, Ohio. Speakers for the day's agenda included: Congressman Rob Portman (R-OH), Congressman Earl Pomeroy (D-ND), Congressman Pat Tiberi (R-OH), Hal Daub, Chairman, Social Security Advisory Board, James Klein, President, American Benefits Council, Jack VanDerhei, Temple University, Research Director for the Employee Benefits Research Institute (EBRI), and Mark Thresher, President, Nationwide Financial.

The day's sessions were focused on the three-legged stool of retirement income – government benefits, employer-sponsored retirement plans, and personal savings and investments. The presentations centered around the current retirement security challenges that all Americans are facing and potential solutions. Representatives Portman and Pomeroy shared their perspectives on federal retirement policies and their future direction.

Representative Portman noted that he hoped to introduce the retirement bill he has been working on with Representative Cardin within the next month. He further noted that the issues that will be addressed in this legislation include:

• Education – financial literacy is a critical issue to be able to make appropriate investment decisions
• Advice – individuals need to be able to get advice (and even be encouraged to seek advice) on their retirement investment planning and be able to identify qualified advice providers
• Life-time guarantees – as more individuals are counting on defined contribution plans, instead of defined benefit plans, for retirement security, more needs to be done to encourage individuals to select life-time income distribution choices
• Encourage more to save – the Saver's Credit that was part of EGTRRA was a first step to encourage individuals to save and invest for retirement; more needs to be done and the next step is a fully refundable credit (individual does not need to owe tax to receive the incentive), with this credit being directly deposited into a retirement account.

Representative Pomeroy discussed the perils to retirement security and the bipartisan agenda to help promote "retirement income security". He identified five risks in retirement planning as:

1. Longevity (more years in retirement)
2. Inadequate accumulation
3. Investment practices in retirement
4. Mismanagement of distribution during retirement (too much spending or, alternatively, hoarding), and
5. Potential catastrophic health events.

He further noted that solutions to address these risks need to include: federal benefits, employer benefits (including pensions and cash balance plans) and annuities that provide retirement income for life.

Look for more information about the policy forum in the August issue of Plan Sponsor Voice.

(back to top)

©2004, Nationwide Retirement Solutions, Inc.

Nationwide, the Nationwide framemark, and Nationwide Is On Your Side are federally registered service marks of Nationwide Mutual Insurance Company. On Your Side and Nationwide Retirement Education Institute are service marks of Nationwide Mutual Insurance Company. America’s Retirement Voice is a service mark of Nationwide Life Insurance Company.

This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information.

Federal and State laws are complex and subject to change. Any information contained herein is based on current interpretations of these laws and is not guaranteed. Neither the company, nor its agents or representatives, give tax or legal advice. You should consult your attorney or tax advisor for specific answers to your tax or legal questions.