sector investing Fidelity or other

[JustCallMeSassy]

More Workers Are Increasing Retirement Savings: Fidelity
Published: Wednesday, 12 Aug 2009 | 12:21 PM ET Reuters
More workers put more money into their retirement plans in the second quarter than reduced their contributions, according to new data from Fidelity Investments.


iStock
Workers are sticking with more conservative investments and avoiding equities.
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The figures reverse a trend from past quarters as markets rose and fit a broader pattern of increased savings by U.S. consumers amid the steepest recession in decades.

In data to be released Wednesday, Fidelity also found workers avoiding equities and choosing more conservative investments for their 401(k) accounts, and a slowing pace of companies cutting their contributions to these plans.

"There's more stability and more confidence" in the savings plans now, Scott David, the Fidelity executive who oversees the area, told Reuters. Improved economic prospects also freed up more cash, he said.

Other fund firms have reported similar trends for so-called defined-contribution savings plans, whose importance has risen with strains on the Social Security system and as companies cut back on traditional pensions. For fund companies, meanwhile, these plans have become a key source of assets and revenue.

As the world's largest mutual fund company, Fidelity also is the largest administrator of 401(k)s and other defined contribution plans, running 17,500 of them for companies that cover 11.2 million workers.

Fidelity said the average plan balance rose 13 percent to $53,900 in the second quarter as markets rose and contributions increased.

According to Fidelity, 4.7 percent of plan participants increased the amount of money they set aside for retirement in the second quarter of 2009, while just 3 percent decreased the amount.

That was a reversal from the three months ended March 31, when 5.8 percent of workers increased their contributions and 6.4 percent decreased them.

One reason for the second-quarter increase, David said, was the financial seminars and other efforts Fidelity has been undertaking to drum up worker interest.

Also, Fidelity found a leveling off in the number of companies that have lowered or eliminated the amount of money they set aside to match employee contributions. The portion of companies that have cut or eliminated contributions rose to 9 percent in the second quarter, from 7 percent in the first quarter.


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Many companies were quick to cut contributions as a cost-savings step amid the recession. But now there are signs of a thaw: Seattle coffee company Starbucks [ Loading... () ], which uses Fidelity's services, is the best-known example of a company to reinstate some matches, and cleaning-products maker Zep of Atlanta also said in July it would reinstate its match.

Elsewhere the pace of cut matches varies. T Rowe Price Group, another large fund firm, said the number of sponsors that have cut or ended matches has held steady at 7 percent since the spring. On the other hand, Vanguard Group said the portion of companies that have cut contributions to plans doubled to 10 percent in the second quarter from 5 percent in the first quarter.

Nancy Hwa, spokeswoman for the Pension Rights Center in Washington, which represents plan participants, said it has tracked fewer reports of these cuts in recent months.

"We're waiting to see if the economy is picking up enough that companies are going to reinstate matches" as they have promised to do, Hwa said.

Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America, which represents employers that provide such plans, told Reuters the increased savings rate reported by Fidelity shows workers understand the importance of setting aside money.

Despite the big losses in value that many plans suffered as stocks fell, workers "understand it's not their 401(k) plan that's bad, it's the market," he said.

In other findings, Fidelity plans to disclose about 68 percent of contribution dollars in the first half of the year went to buy equity investments, down from 75 percent in recent years.

Copyright 2009 Reuters

[leaguer4]

[leaguer4]

[leaguer4]

[leaguer4]

[leaguer4]

[biker44]

Hi Sharon, An hour ago, Zacks listed TSCO as their "stock of the day", its earnings are up, according to Zacks. Thanks for starting this board.

[MoneyPenny]

Well we know what the corporate boondogle dujour will be:
Merck.

[MoneyPenny]

All the fat cats were away on Friday, which was a light day. The mice ran it up and I imagine we'll be down today.

Cash is king for me right now. You never know what the morning news will bring. Corporate shenanigans and malfeasance, madness of governments, and the other shoe dropping from the middle east. This does not make anything look good to me other than gold and the madness of governments is determined to hold it down.

Sharon

[MoneyPenny]

I set up a select fund group in the premium area without realizing it until I went to post and couldn't as I haven't paid yet. If Infospace shuts SI down I'll definitely ante up for the lifetime membership. Until then I'll mainly post at SI.

As for select funds, nothing looks good to me right now. I have some gold and a tiny position in oil service and a minimal one in defense. I am 85% cash in my select funds.

MoneyPenny

[biker44]

MoneyPenny, Your announcement of the Fidelity Sector funds seems to be in the cost-free area of iHUB, since I see it, and I am not a Premium member. I hope Julius Wong and the others of SI continue to post (here) with their excellent insights on those funds. Sincerely, Biker44 7-7-02

[jorocco2]

Fancy meeting you here, Money Penny.

This is becoming more like James Bond every day.

Monday morning will be exciting viewing the markets. My guess that the pros will not confirm Fridays rally.

Angler2

[MoneyPenny]

I set up a Fidelity Sector discussion group only to find that I had set it up in the premium section of Investors Hub. If and when SI closes, if it does, we may all end up here.