Introducing NYLIM's Unique Managed Account Solution
PARSIPPANY, N.J., Oct 12, 2004 /PRNewswire via COMTEX — NYLIM Retirement Plan Services, a division of New York Life Investment Management LLC (NYLIM), introduced today a service that offers a new way for Americans to save for retirement, allowing employees to delegate management of their savings and investments to an expert.
This managed account service is a new approach to the traditional 401(k) plan. According to NYLIM, many employees don't focus enough on saving and investing for retirement, which leads them to allocate too little to their retirement plan, or to not participate in it at all. As a result, when they near retirement, they will not have saved enough to support the lifestyle they envision.
This new service will steer employees away from concentrating on the account's current market value and toward focusing on the level of income the account will provide in retirement. NYLIM Retirement Plan Services' offering is unique because of its proactive annual communications with every employee in a client plan, its advice on how to increase participant savings over time, and NYLIM's fiduciary support to plan sponsor clients who adopt the program.
"This service addresses the needs of a population that haven't been addressed before," said Barry Schub, executive vice president of NYLIM Retirement Plan Services. "The 401(k) industry's past education efforts have been helpful to self-directed investors. Our unique managed account service offers a solution for those who would rather have an expert do it for them. For that population, this new approach says 'we'll help you get there by urging you to participate in the plan, taking control of your 401(k) investments and automatically increasing your savings rate over time.'"
This new service utilizes a highly personalized approach featuring an analysis for every employee that shows the gap between what his/her current saving and investment decisions would likely provide in retirement income versus what the goal should be to retire comfortably. All employees in NYLIM's client plans will receive this report annually, whether or not they are enrolled in the 401(k) plan.
In many cases, the analysis will show that asset allocation alone will not get participants to their goal -- they will also need to save more. For example, a 35-year-old making $40,000 per year who is just starting to save for retirement will need to sock away approximately 15 percent of his or her salary per year,* assuming a replacement ratio of 70 percent of projected final salary. Right now, the average participant defers just 5.3 percent annually.**
Among the specific services offered will be: professional investment advice through Morningstar Associates, LLC, automatic savings increases over time, ongoing, proactive participant contact, and an annual participant report card on progress toward their goals. Morningstar Associates, LLC, a registered investment advisor, will serve as the independent financial expert behind this new service. Morningstar Associates will design fully customized portfolios for participants, and will set guidelines to rebalance and reallocate those portfolios to help ensure that investment strategies stay on track.
Additionally, the service will use the existing investment options within a given plan to craft the specific asset allocation for each participant. The program features 99 different investment mixes that will cover the entire risk/return spectrum.
"Our award winning participant service platform will help us be proactive with employees which in turn makes us optimistic about helping a high percentage of participants adopt the program. We think this is the key to helping those participants reach their retirement income goals," said Mr. Schub.
NYLIM Retirement Plan Services will support the fiduciary needs of its plan sponsor clients not only by serving in a fiduciary capacity for the managed accounts plans it administers but also by offering sponsors a unique "plan sponsor report card" that shows how an entire participant base is performing vs. an overall pre-defined salary replacement goal.
NYLIM's managed account solution is built to complement the work of financial advisors engaged by many of NYLIM's plan sponsor clients. It will be available starting in the first quarter of 2005 to NYLIM Retirement Plan Services' new and existing mid- and large-sized plan sponsor clients and their participants.
About Morningstar Associates, LLC and Morningstar, Inc.
Investment advisory services are provided by Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar, Inc. is a leading provider of independent investment research in the United States and in major international markets.
The company offers an extensive line of Internet, software, and print- based products and services for individuals, financial advisors and institutional clients. Morningstar tracks more than 100,000 investment offerings, including stocks, mutual funds and similar vehicles. The company has operations in 16 countries.
About NYLIM Retirement Plan Services
NYLIM Retirement Plan Services oversees more than 2,100 comprehensive defined contribution, defined benefit and deferred compensation plans as of August 31, 2004. With offices in Norwood, Massachusetts, and Parsippany, New Jersey, NYLIM Retirement Plan Services administers retirement programs for small, medium and large companies, multi-employer plans, and individuals throughout the United States, and is widely recognized for its leadership in bundled defined contribution and bundled defined benefit plans.
With more than $180 billion in assets under management as of August 31, 2004, New York Life Investment Management LLC and its affiliates provide investment management and related services to a wide range of individual, corporate, public, and Taft-Hartley clients. NYLIM offers institutional asset management, retail investments, retirement plan services, guaranteed products, real estate investments, and alternative investments. For more information, visit NYLIM's Web site at http://www.nylim.com.
* Source, TIAA Cref ** Source, PSCA, 2004.
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