DSG-Network.com: Press Releases

DSG Completes Retirement Plan Asset Retention Study

January 6, 2005, Wayne, PA - The Diversified Services Group, Inc. (DSG) today announced the completion of a major syndicated research study, Capturing and Retaining Rollover Assets at The Retirement Inflexion Point™. The report includes the findings of three separate, but complementary, research efforts: qualitative in-depth interviews of retirement plan sponsors (employers) and defined contribution retirement plan providers (executives) and a quantitative consumer survey conducted among pre-retirees and retirees.

The study examined issues, opportunities, and decisions from the perspectives of the employee, the employer, and the retirement plan provider during an employee’s transition to retirement. The primary intent of the research was to provide important insights to firms that are seeking to improve their retention or capture of retirement plan assets when the plan participant reaches retirement and makes a decision on the placement of those assets.

Selected findings from the study include:

A key factor in the most successful retention programs is for the plan provider to develop and maintain lasting relationships with employees before they retire. However, more than 1/3 of today’s near-retirees cannot even identify their retirement plan provider.
The retention of rollover assets is fast becoming a major issue for most plan providers, with 2/3 of those interviewed having organized in some way to facilitate asset retention.
A significant majority of employers interviewed would welcome more help from their plan providers to counsel employees on retirement distribution decisions, provided that cost, objectivity, and other criteria were met.
Segmentation strategies must be devised by plan providers within and across employer groups to cost effectively manage retention and new asset acquisition efforts.
More than half of all retirees rolled their assets to a new account at the time of retirement.
Based on expectations of pre-retirees, there will likely be a growing interest in payout products to help provide income during retirement.

According to Wm. Borden Ayers, a DSG Principal and leader of its retirement market practice, "Although retirement plan providers are aware of the importance of establishing relationships with employees well before retirement, it’s obvious from this study that they still have a long way to go to be successful. Considering that the companies we spoke with are ‘losing’ between $500 million and $4 billion of assets each year to rollovers, retention is an issue that is worthy of much more attention by firms who are actively providing and servicing defined contribution retirement savings programs, especially 401(k) plans. The opportunity is still wide open: pre-retired employees are very receptive to receiving help and advice, and they are typically not going to get it from their employer."

This study is part of an ongoing series of syndicated research reports about the ‘Retirement Management Market’ known as the RM2 Reports™. These reports focus on issues that firms face as they develop services, products and marketing initiatives to reach individuals and compete at and after the Retirement Inflexion Point™.

DSG is a multi-disciplined firm that provides consulting, research, and sales executive development to the financial services industry. The Retirement Practice includes a particular focus on the issues surrounding The (post) Retirement Income/Asset Management Market.

For further information, contact:

James Sholder, Principal
Ph: 610-889-1792
Fax: 610-989-1730
e-mail: JimS@dsg-network.com

The Diversified Services Group, Inc.
303 West Lancaster Avenue
Suite 2E
Wayne, PA 19087-3938