Monthly Archives: March 2010

Viva Canada! Hot Job – Senior Investment Consultant – Alberta, Calgary

SENIOR INVESTMENT CONSULTANT

Location: Calgary, ALBERTA, US

Senior Investment Consultant 020030
Alberta-Calgary

Application URL:

http://bit.ly/SeniorICCalgary

Description:

For over 65 years, Hewitt has been helping leading companies around the world get a great return on their most important investment-their people. We’ve earned our reputation for HR excellence through the thought leadership of Hewitt Consulting and the administrative leadership of Human Resources Outsourcing. Clients look to us for best-of-breed solutions to specific problems as well as fully integrated solutions that bring together our broad range of services. We enable our clients to build shareholder value by helping them hire, develop, motivate, retain and reward the employees who create that value every day. Hewitt began as an HR consulting firm-and our thought leadership, innovative consulting solutions, and client-intimate service remain the cornerstone of who we are. Our broad-based and unique consulting capabilities give companies worldwide the experience, creativity, and resources they need to take on their biggest human resources and organizational challenges. Senior Investment Consultant As part of Hewitt’s Global Investment Practice, the Canadian investment practice delivers advice to clients on investment strategy, portfolio structure, manager/record-keeper selection, DC plan management and other investment issues. This role will lead the delivery of investment consulting services to Alberta-based clients, and will be a member of a multi-disciplined Calgary-based consulting team. Primary Functions This role is a critical part of our ongoing growth strategy in western Canada as well as being a member of the Canadian investment consulting team. Given this, the associate in this role will use their strong business development, analytical and communication skills to develop relationships and assist clients with investment issues in relation to pension funds, capital accumulation plans, endowment funds, foundations, insurance companies, etc. The key functions are as follows:
-Client leadership – develop and nurture new client relationships by having a thorough understanding of all services we provide to our clients and look for opportunities to make integrated offers in cooperation with other parts of our business.
-Business leadership – focus on financial results, play a key role in strategizing for pricing and selling new business, help to manage resource allocation in light of business needs, connect with other parts of our business to help guide integration of our investment services with other practices, and ensure that the group contributes to the success of the region/firm.
-Thought leadership – provide specific technical expertise or strategic direction on topics which affect our business (either locally or more broadly to the practice), support and encourage new ideas, and analyze/research information to send to clients.
-Project leadership – demonstrate responsibility for the overall delivery of work for our clients. This includes managing multiple projects for clients, understanding the connections and priorities for all projects for each client, ensuring the quality and efficiency of the work, developing relationships with our client contacts, managing process improvements, providing coaching and training of our associates within the context of the projects, working/integrating with other practices to help get projects done, and demonstrating subject matter expertise and excellent consulting skills.

Qualifications:

-University degree, most likely Business, Math or Economics. A MBA considered an asset.
-10 plus years of industry experience – investment management, record keeper or investment consulting is preferred.
-Chartered Financial Analyst designation.
-Strong business development skills.
-Knowledge of, and experience in, different types of institutional clients i.e. pensions, capital accumulation plans, foundations, endowments and insurance companies.
-Knowledge of the institutional investment management industry in Canada.
-Strong presentation and communication skills.
-Strong interpersonal skills.

Job Segments: Business Development, Consultant, Consulting


Hewitt Associates to add almost 500 Charlotte jobs

Hewitt Associates to add almost 500 Charlotte jobs
Charlotte Business Journal

Direct Article Link:

http://www.bizjournals.com/charlotte/stories/2010/03/29/daily29.html

Illinois-based Hewitt Associates (NYSE:HEW) is a consultant to more than 3,000 companies. It provides services for human resources, health care, payroll and retirement affecting millions of employees and retirees worldwide.

The company has 23,000 workers in more than 30 countries. Hewitt has 534 workers in North Carolina. The vast majority of them are in Charlotte.

The new jobs primarily will be in human resources and information technology and will pay an average salary of $43,600 plus benefits. They will be added to the company’s leased operations at University Research Park in north Charlotte.

“We’re pleased with the growth prospects for our business, and particularly our Charlotte center,” says David Swift, vice president. “Charlotte is a great location for us to expand our business due to the available talent pool and we very much look forward to growing our presence here with the continued support of the state of North Carolina.”

That support comes in the form of a job-development investment grant from the state. Hewitt is eligible for a rebate of up to 60 percent of the state withholding taxes for the new jobs. The company could receive a maximum of $4 million in payments.

Hewitt will not receive any local investment grants.

“Hewitt’s decision to expand in Mecklenburg County means new jobs for hundreds of North Carolinians,” says N.C. Gov. Bev Perdue. “This announcement by an international industry leader can only strengthen North Carolina’s already strong reputation as a business-friendly state with a skilled and knowledgeable work force.”

The Charlotte Chamber worked with Hewitt on its expansion plans in Charlotte.


Hewitt Analysis Shows Percentage of U.S. Workers Actively Enrolling in Benefits Reaches an All-Time High

While More Employees Took Action During 2010 Enrollment Season, Few Made Meaningful Changes in the Benefits They Chose

With U.S. health care and large-scale health reform in the media spotlight, a new analysis by Hewitt Associates, a global human resources consulting and outsourcing company, shows a record percentage of workers took an active role in selecting their health care benefits during open enrollment for the 2010 plan year. Despite being more engaged in the enrollment process, Hewitt’s analysis showed the majority of employees chose to enroll in similar health plans to what they have in the past.

Hewitt’s analysis of 6 million U.S. workers, for whom Hewitt managed benefits enrollment in the fall of 2009, revealed the highest number of active enrollees since Hewitt began tracking the data in 2003. Nearly half (45 percent) of employees actively chose their benefits for 2010 instead of passively defaulting into the same coverage or no coverage at all. This is up significantly from the 2009 open enrollment period, where just 39 percent of employees actively enrolled.

Despite employees taking a more active role in selecting their benefits, Hewitt’s data shows very few workers enrolled in different health insurance plans. Enrollment in exclusive provider organizations (EPO), preferred provider organizations (PPO) and high-deductible health plans (HDHP) remained consistent with previous years. Enrollment in health maintenance organizations (HMO) dipped slightly from 17 percent in 2009 to 14 percent. Point of service (POS) plans and indemnity plans both saw slight up-ticks in enrollment, from 5 percent and 11 percent in 2009 to 8 percent for 2010 and 13 percent, respectively.

Hewitt’s analysis also shows that enrollment in Health Savings Accounts (HSAs) has risen steadily over the past five years, from 5 percent in 2005 to 14 percent in the current plan year. Enrollment in Flexible Spending Accounts (FSA) remained consistent, with one in five (20 percent) of employees enrolling in an FSA for 2010, up slightly from 18 percent in 2009.

“Employee inertia continues to play a large role in enrollment decisions—it’s encouraging to see that people are more engaged in assessing their benefits, but that doesn’t mean they are necessarily making different choices,” said Sara Taylor, health and welfare strategy leader at Hewitt Associates. “If employers want workers to make different elections, they might need to adopt a more aggressive approach—whether it’s changing or reducing plan options or offering plans with widely differing price points.”

Use of Decision-Support Tools Rises
Hewitt’s analysis also shows across-the-board increases in the percentage of employees using online decision-support tools to help them compare health care coverage options and make trade-off decisions about how to spend their health care dollars. For example, use of Hewitt’s People Like Me tool—which provides employees with examples of the benefits selections of people in similar circumstances—increased from 8 percent in 2009 to 26 percent for the 2010 plan year. Additionally, 22 percent of participants used a medical expense estimator, up from 11 percent in 2009.


Social Media Has Its Date with the Court System – Next on Law and Order

‘Sexting’ and social media cases turn heads
By Lydell C. Bridgeford – Employee Benefits News – April 1, 2010 Issue

We live in a high-tech world that increasingly blurs the lines between one’s professional and personal lives.

Despite the uncertainty of what’s fair game and what’s off limits in our digital culture, legal commentators say employers must stay up-to-date on the constantly moving parts pertaining to workplace privacy.

On April 19th, the Supreme Court will hear oral arguments in a case on whether workers have a “reasonable expectation of privacy” when sending personal text messages on company-owned mobile devices.

The case, City of Ontario v. Quon, involves several SWAT team members who sent sexually explicit text messages on government-issued pagers. The California lawsuit arrives on the Supreme Court’s door courtesy of the 9th U.S. Circuit Court of Appeals.

The Supreme Court will determine, in part, whether the California officers had a reasonable expectation of privacy when using the pagers, and if the police department had an official no-privacy policy that was undermined by a lieutenant who told the officers that they could use the pagers for personal matters.

The court’s upcoming decision, whether it’s in favor of the police department or the SWAT team members, will probably raise new questions about privacy rights in the workplace, especially for public employers.

Case notes

In June 2008, the appeals court ruled that the Ontario police department violated SWAT team members’ Fourth Amendment rights when a police chief read the personal content of their text messages without their consent.

The team’s supervisor wanted to see if SWAT team member John Quon and three other members’ excessive use of their pagers resulted from personal or work-related activities. The chief asked the pager service provider to hand over transcripts of archived messages sent to and from the SWAT team members. In reviewing the transcripts, he noticed that some personal text messages were sexual in nature.

According the 9th Circuit ruling, the police department had a written statement asserting, in part, that it would monitor text messages. Therefore, the city’s attorneys argued the SWAT team members had no reasonable expectation of privacy. The SWAT team members maintain, however, that their supervisor assured their messages would not be reviewed as long as they paid any over-the-limit fees for texting.

Ultimately, the appeals court held that “the search of the [officers'] text message violated their Fourth Amendment and California constitutional privacy rights because they had a reasonable expectation of privacy in the context of text messages.

Yet, [w]e do not endorse a monolithic view of text message users’ reasonable expectation of privacy, as this is necessarily a context-sensitive inquiry,” the court added. Under the Stored Communications Act, electronic communication providers cannot reveal the contents of text messages without authorization from the end user, even if the employer is paying for the services.

The City of Ontario and USA Mobility Wireless, which acquired the pager-service company that released the text messages to the police department, appealed the 9th Circuit decision to the Supreme Court.

Privacy implications for public employers

“The Quon case is worth paying attention to because the idea that an employer can issue a policy explaining to workers that it reserves the right to review e-mails and text messages can be potentially undermined by a supervisor stating the contrary,” explains Christine Lyon, a partner in the Palo Alto, Calif., office of Morrison and Foerster, where her practice concentrates on privacy and employment law.

In addition, Quon and his fellow officers claimed that the police department also violated their privacy rights under the California constitution.

In the state, residents can sue an employer for invasion of privacy. Consequently, the appeals court not only analyzed the case by examining the Fourth Amendment, but also privacy rights claims under the state constitution. As such, the Quon ruling widens the window for California residents to prevail in privacy invasion lawsuits against private-sector employers.

However, the legal issues before the Supreme Court will mainly focus on the fact that the SWAT team members are public employees employed by a government entity responsible for public safety. Police authorities believed that their mission to protect the public’s safety outweighs the SWAT team members’ privacy interests.

“It’s possible that the Supreme Court may side with the police department because of this argument,” explains Lyon. Some employers will argue that they have a compelling reason, such as a safety concern or a court order requesting documents, to monitor and review workers’ e-mails and text messages created on company-owned computers and mobile devices.

On the other hand, “if the Supreme Court rules in favor of the SWAT team members, then the take-home message to employers would be to make sure your managers and supervisors fully understand and communicate to workers that the company reserves the right to monitor e-mails and text messages,” Lyon explains.

New Jersey-based attorney Joseph Paranac Jr. explains that the Quon case is a state action, which “means it is covered under Fourth Amendment protections against unreasonable searches and seizures. Public employees have a greater expectation of privacy than their private-sector counterparts.”

Still, the lawsuit points to the “rising prominence of cyber-liability in our Twittering, Facebooking, iPhone-enabled age,” adds Paranac, who is a member in the labor and employment practice group at LeClairRyan.

Paranac considers the Quon case the perfect example as to why employers should create straightforward policies on how their workers use company-owned computers, pagers and other electronic devices.

“For example, the case of Stengart v. Loving Care Agency, which is headed for the New Jersey Supreme Court, centered on whether e-mails sent by an employee to her lawyer using a company-owned computer are protected by the attorney-client privilege and therefore off-limits from monitoring,” Paranac explains. “In that case, the plaintiff used her password-protected Yahoo account, not the company’s e-mail system, to communicate with her attorney about a planned lawsuit against the company.”

Paranac believes that the nation’s high court “might well carve out similar exceptions for other sensitive communications, such as doctor-patient e-mails sent with employer-owned equipment. This puts employers in a quandary,” he explains.

The best that employers can do is to create and “enforce clear and consistent polices, because we are just at the beginning of a process in which the courts will likely shape the limits of those policies,” Paranac adds. “Until that process is complete, employers and employees alike will have to operate within a kind of cyber-liability grey area. The wheels of justice turn slowly, and both courts and lawmakers are struggling to catch up to technology.”

The MySpace case

Another case that has raised eyebrows is Pietrylo v. Hillstone Restaurant Group. In September 2009, a federal district court in New Jersey upheld a jury verdict, concluding that the employer, the Hillstone Restaurant Group, violated the Stored Communications Act and the state’s electronic surveillance statue.

A manager at the restaurant who was not authorized to use a MySpace page created by two employees reviewed the contents of the site, which was set up, in part, as an outlet for the two workers to express grievances about the employer.

During the trial, one employee testified that she felt pressure to hand over her password to the manager. After reviewing the content on the MySpace page, the manager fired the two workers who created the MySpace page, citing that the content on the site hampered employee morale and went against the company’s core values.

“It’s a noteworthy case, because it’s one of few published opinions on social media and the workplace,” Lyon says.

The Pietrylo case definitely highlights the importance of distinguishing between information that an employee puts out on the Internet, for example a blog, for the whole world to see versus content from a limited-access Web site.

Advice for employers

Employment experts say an employer can reduce the expectation of privacy among its workforce by having a good written policy that explains the company reverses the right to monitor e-mails, text messages and Internet usage on computers, smartphones and BlackBerries that it owns or pays for.

Still, Paranac and other experts recommend employers create a separate policy on social media that details how workers are representatives of the company and that they should not leak confidential information or discuss internal matters on social media sites.

Furthermore, the policy should explain to workers that activities conducted on social networking sites should be limited to nonworking hours, unless the use is for legitimate business purposes.

Additionally, employees’ comments should not be discriminatory or harassing in nature. This includes making disparaging or inflammatory remarks about the employer and its business.

In essence, “you are not to bad mouth the company on social media sites because it can have an immediate negative effect on the company,” adds Paranac. “Every employer is benefited by promulgating a policy that makes clear to employees what is kosher and what is not,” he adds.


Hot Job Alert – Senior Human Resources Advisor – Charlotte, North Carolina

Senior HR Advisor 018912
North Carolina-Charlotte

Application URL:

https://hewitt.taleo.net/careersection/2/jobdetail.ftl?lang=en&job=018912

With more than 65 years of experience, Hewitt Associates (NYSE: HEW) is the world’s foremost provider of human resources outsourcing and consulting services. The company consults with more than 2,300 organizations and administers human resources, health care, payroll and retirement programs on behalf of more than 340 companies to millions of employees and retirees worldwide. Located in 33 countries, Hewitt employs approximately 24,000 associates.

The Senior HR Advisor (Sr. HRA) is the lead HR consultant to business leaders and their respective senior leadership teams. The HRA is the primary liaison between Global HR Functional and Segment Leadership and Business Leadership and is responsible for the full spectrum of Hewitt’s HR portfolio and the successful implementation of our strategic initiatives, as well as identifying HR solutions and strategies needed to support the business unit specifically.

The HRA provides counsel to:
-Build leadership capability within the business segments
-Build delivery capability globally through recruitment, talent development and total rewards
- Improve associate performance through increased engagement and retention of key talent
-Ensure the business is well positioned to overcome challenges and for future growth
-Ensure seamless, efficient delivery of all HR programs and services

Senior HR Consultant and Business Partner
-Creates trusted relationships with leaders.
-Consults and advises senior leaders and managers on the entire HR portfolio.
- Demonstrates an in-depth understanding of Hewitt’s overall business model and how to consult to HR programs within the context of results and performance.
-Actively contributes as a member of the senior leadership team and advises on all areas of the business.
- Creates cohesive and effective partnerships with aligned HR Functional Leaders in support of business.
-Possesses the ability to solve complex organizational issues and coordinates across the HRA population globally to ensure integration.

HR Portfolio and Project Manager
Develops a broad understanding of all Hewitt HR Programs and is responsible for execution of all major HR initiatives within aligned business group on both an annual and ad-hoc basis.
Specifically:
- Annual Pay Review Cycles. Ensures compliance to process, budget, and our system strategically supports our philosophy of creating a high-performance work culture and rewards top performers.
- Performance Planning Process. Manages process, education and compliance for the bonus program.
- Global Talent Management Review. Manages process, education, and facilitates calibration across business segment to ensure the team identifies and develops future leaders
-Promotion Process and Review. Manages process, education, calibration and communication.
- Annual Engagement Analysis and Review. Manages process, education, and consults to business specific results and action planning.
- Implementation of any new or updated HR initiatives. Manage process, education, and consults to business leaders, managers and associates.
- Workforce Planning Initiatives. Partners with leaders in the analysis of organizational structure, organizational capabilities, positions eliminations and resource management across the business.
- Liaison between Business and HR Connect.
Qualifications

Responsibilities (cont’d)
Build and Develop Organizational Capabilities
- Partners with business leaders in support of development and retention efforts for our key and high performing talent to ensure we have the capability to maintain and grow our business.
-Acts as coach and mentor to leaders and high performing associates as it pertains to their overall career development and progression.
- Works with leaders to ensure performance management is being effectively employed in support of our high performance culture.
-Partners with Talent Acquisition and business to assess needs and workforce planning strategies.
- Partners with the Global Talent Team on initiatives supporting Manager and Leadership Development
- Help to deepen cross cultural competence in Leaders and their groups through support of training efforts and diversity councils, as well as through the consideration of cross cultural impact to business decisions.

Change Agent
- Educate and Influence leaders to adapt quickly to organizational and segment specific shifts in direction;
- Provide thought leadership – related to strategic delivery and based on unique on the ground perspective – to segment or company wide teams preparing change management plans for major talent-related initiatives.

Formal Education & Certification
- Bachelor’s degree
-SPHR, CHRP, or GPHR desired
- MS in Human Resources or Business desired

Knowledge & Experience:
- 10+ years professional HR experience (experience in generalist, specialist, and client-facing roles preferred)
- Ability to consult to the entire HR Portfolio with an integrated, global perspective
- Demonstrated ability to consult, influence and partner with senior leaders in developing/executing people strategies to drive business performance
- Demonstrated relationship management skills at all levels of the organization
- Possesses strong business and financial acumen
- Experience managing complex projects (global HR project management highly desired)
- Demonstrated success resolving complex HR issues. Has a working knowledge of employment law for the largest countries in which Hewitt operates and current HR trends; ability to use such knowledge proactively in consulting with clients.
- Ability to consult on application of policy and process as well as trends, themes, and solutions
- Ability to anticipate changes required within the business and to drive such changes in partnership with business leaders
- Strong to advanced verbal and written communication skills especially with senior level leaders
- Proficient in MS Office (Word, Excel, PowerPoint) and Lotus Notes
- Knowledge and experience using PeopleSoft (desirable but not required)
-Ability to facilitate training sessions virtually and in person for both managerial and leadership audiences
-Ability to build cost/benefit analysis to justify investment in HR and people strategies
- Ability to coach and mentor HRCC and less senior HRAs

Work Conditions:
- Ability to work effectively in a virtual or distributed environment
- Minimal travel required

All positions require an applicant who has accepted an offer to undergo a background check. The checks run are based on the nature of the position. Background checks may include some or all of the following: education verification, employment verification, criminal check, Denied Restricted Parties Lists or OFAC lists check, fingerprint verification, credit check, and/or drug test. By applying for a position with Hewitt Associates, you understand that you will be required to undergo a background check should you be made an offer. You also understand that the offer is contingent upon successful completion of the background check and results consistent with Hewitt’s employment policies. You will be notified during the hiring process which checks are required by the position.

Hewitt is an Equal Opportunity Employer Committed to Diversity, M/F/D/V


Hewitt Associates Webcast/Web Conference on Health Care Reform – Recorded access for those that missed the event

On February 22, 2010, Hewitt Associates had an informational webcast/web conference on Health Care Reform to help individuals, companies and families understand the changes in the new health care bill.

Here is a direct link to the recorded session. If you have not viewed this event, please take time. It is filled with valuable user friendly material:

http://www.infiniteconferencing.com/Events/Hewitt/022210hewittalumni/recording-playback.html


A Treat for all the History Buffs: Microhistory of Employee Benefits and Compensation in the United States, 1636-2009

Direct URL:

http://www.hewittassociates.com/Intl/NA/en-US/KnowledgeCenter/ArticlesReports/ArticleDetail.aspx?cid=2414&tid=45&stid=6633

Did you know . . .

The first private pension plan was developed by the American Express Company in 1875?

Massachusetts passed the first minimum wage law in 1912?

The first major medical group insurance contract was issued to General Electric’s management personnel in 1949?

The microhistory linked to below highlights the major events and legislation that Hewitt Associates believes influenced the growth and quality of employee benefit plans and compensation practices in the United States from 1636 to 2009. Historical sources are sometimes contradictory and unclear and, therefore, this timeline may be imperfect. However, this list provides a valuable tool to examine developments and trends in employee benefits and compensation over the past 350-plus years.

Full Report:

http://www.hewittassociates.com/_MetaBasicCMAssetCache_/Assets/Articles/2009/Microhistory_Employee_Benefits_and_Compensation_092009.pdf


Tax Season Is an Ideal Time for Americans to Reassess Their Retirement Savings Strategy – Do’s and Dont’s Recommendations

Hewitt Associates Offers Workers Seven Simple Do’s and Don’ts for Maximizing Their Nest Eggs

It’s that time of year again: tax season. While most Americans may prefer to file their returns and put their finances on the backburner until next year, Hewitt Associates, a global human resources consulting and outsourcing firm, believes now is an ideal time for employees to review their 401(k) plan and make sure they’re on track for retirement. In many cases, workers might find they can take a few relatively simple steps to substantially increase their nest egg and reduce their IRS payments for next year’s tax season.

“For many workers, thinking about saving for retirement can be overwhelming,” said Pamela Hess, Hewitt’s director of retirement research. “What they don’t realize is that there are a number of simple actions they can take—and a few they can avoid—that can significantly impact their nest egg and help them meet their long-term retirement goals.”

Hewitt offers Americans a few simple savings do’s and don’ts that can make a significant impact on their 401(k) plan balances:

Do’s

Do participate in your 401(k): Contributing to a traditional 401(k) plan actually lowers your taxable income for the year by allowing you to contribute pre-taxed money directly from your paycheck. This money grows tax-free until you retire or you start withdrawing funds. And chances are quite good your employer offers one! Hewitt research shows that the overwhelming majority of mid- to large-sized companies—96 percent —offer a 401(k) plan to their employees, and nearly three in ten (29 percent) offer a Roth 401(k).
Do increase your contribution rate: Did you know that contributing just 1 percent or 2 percent more of your salary to your 401(k) can have a dramatic impact on your retirement savings? For example, a 30-year-old employee earning an average salary of $50,000 who increases his/her contribution rate from 4 percent to 6 percent will have accumulated an extra $295,000 by the time he/she reaches retirement age. That same worker can save an extra $881,000 at retirement by regularly increasing his/her contribution rate in this manner throughout his/her career1. Many employers (59 percent) offer contribution escalation—where you can increase your contribution rates automatically and gradually over time without having to take any additional action.

Do put your plan on autopilot: Whether it’s because the process is too confusing, too time consuming, or both, the majority of Americans take a back seat when it comes to managing their 401(k) plans. Most employers today offer tools and features that take the guesswork out of saving and investing. Check to see if your employer offers target-date funds or automatic rebalancing tools, which can ensure you have a balanced mix of funds in your plan.

Taking advantage of these tools and features can potentially increase your retirement savings by 50 percent or more over the course of your career2.

Do take advantage of advice: According to a joint study from Hewitt Associates and Financial Engines, a leading independent investment advisor providing retirement help, the median annual return for employees using investment help was almost 2 percent higher than those who did not. Not sure where to start? Many employers offer services and tools that can help you make informed investment choices based on your particular needs. Hewitt research shows that about half (51 percent) currently offer online investment guidance, and 39 percent offer online, third-party investment advisory services. In addition, 28 percent of employers currently offer managed accounts, which lets you delegate the overall management of your account to an outside professional.

Don’ts

Don’t give up free money: Did you know that more than a quarter (28.2 percent) of workers cut their retirement savings short by contributing below the company match threshold? Make sure you’re contributing enough to your 401(k) to receive your full employer match. A 30-year-old employee earning $50,000 in 2010 can save 50 percent more at retirement if he or she contributes enough to his/her retirement plan each year to get the full company match3. And there’s good news even if your employer cut your match during the past two years. Hewitt research shows that 80 percent of employers that reduced or suspended their match in 2009 plan to restore it in 2010.

Don’t cash out: If you’re changing jobs or leaving your current job, don’t cash out your 401(k) savings. According to Hewitt research, 46 percent of employees do cash out, sacrificing potentially hundreds of thousands of dollars in retirement savings. For example, if you cash out $5,000 now, you will pay full taxes on that balance, plus a 10 percent early withdrawal fee. Keeping that $5,000 invested in a 401(k) plan can potentially turn into more than $50,000 at retirement.

Don’t overinvest in company stock: It’s a common temptation for employees to invest a significant portion of their 401(k) money in their employer’s stock. However, this can be a risky move. Even well-respected companies slump or stagnate for a period, while some even go out of business. It’s important to revisit your 401(k) plan portfolio and make sure you are investing no more than 10 percent of your assets in any single fund, including your employer’s stock.

http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=8283


Hewitt study projects India pay hikes at 10.6% in 2010 – YouTube Video


Do You Have Enough to Retire? Do the Math – Wall Street Journal

By Brett Arends – Wall Street Journal

Just how much are you going to need in order to retire comfortably?

It may be the biggest financial question in your life. With 80 million baby boomers now heading into the flight path for retirement, it’s a pressing one, too.

Yet a horrifying number of people have never even asked it — and may not know how to find answers.

Earlier this month, a survey from the Employee Benefit Research Institute, a leading nonprofit in the retirement field, found that fewer than half of workers, 46%, had tried to calculate how much they would need for a comfortable retirement.

That is even scarier than the data showing that most people haven’t saved enough. (And the two, of course, are closely related. One of the biggest reasons people haven’t saved enough for retirement is that they don’t realize how much they will need.)

So how do you go about working out the answer? There’s a simple five-step approach.

1. Find the Target

Start by estimating your “target retirement income.” That’s simply the annual income you think you will need to live comfortably in retirement. Some experts advise drawing up budgets.

But if you are looking for a ballpark figure, there is a simpler approach. You can just assume that the discretionary income you are likely to need in retirement is about the same as the one you have now. It’s not perfect, but it’s a good place to start.

So take your current gross income, and deduct the costs you no longer expect to have once you are retired. That includes your payroll taxes. It includes the amount you’re saving. It may include temporary expenses, such as college costs for your children. And if you are currently paying a mortgage, and expect to have it paid off by the time you retire, it includes the mortgage costs, too.

What is left after these costs is your discretionary income. If you want to know what you will need in retirement in order to live comfortably, that’s as good a guess as any.

2. Estimate Social Security

Work out how much you are likely to get each year in retirement from Social Security.

The Social Security Administration has online calculators to help. You can find them at http://www.socialsecurity.gov/planners/calculators.htm and http://www.socialsecurity.gov/estimator.
Be aware that delaying your retirement date, up to the age of 70, will earn you higher Social Security payments. Remember to count your spouse’s likely benefits, too.

3. Subtract Pensions and Other Income

Don’t forget any income you are likely to get from other sources, such as a traditional company pension.

These used to be the bedrock of retirement planning, but fewer and fewer workers are covered by them now. Companies have shifted toward 401(k) plans, where the investment risk is borne by the employees rather than the employer.

Even those who are still covered by traditional pension plans typically rely on them less. These plans reserve their biggest benefits for those who stay with the same company for their entire career, and who does that anymore?

If you are still covered by a traditional pension plan, you should contact the administrators to find out how much you are likely to get when you retire.

4. Subtract Income From Your Target

With these three pieces of information in hand, you can now work out how much retirement income you will have to provide from your own savings. The answer, simply enough, is your target retirement income (step one) minus the income you can expect from Social Security (step two) and any traditional pension (step three).

5. Multiply the Result by 20

And from this you can estimate the savings you will need to accumulate in order to generate that income each year. It’s about 20 times as much as the annual income.

In other words, if you are going to need to generate about $10,000 a year in retirement income out of your own resources, you will probably need to save about $200,000 by the time you retire. If you want to generate about $50,000 a year, you will probably need to save $1 million, or 20 times that.

Why 20 times? It’s simple math. You don’t want to run out of money, so to be safe you should really save enough to last for several decades. Many of those turning 65 in decent health these days should plan on lasting into their 90s. And when you are retired, you should probably plan on the basis that your investments may only earn 3% a year above inflation, maybe even less.

Investors may earn more, but those in retirement are probably going to want to play it reasonably safe. Based on those assumptions — they are, I admit, conservative — you will need to save about 20 times the annual income you need your savings to generate. Those who want to be even more secure could save 25 times.

For many people, this savings target will work out at around eight times current gross income. That’s because the target retirement income is often about 80% of current income, Social Security aims to replace maybe 40%, and 20 times the difference is eight times. (If you’ve paid off a mortgage, you will need less).

Some people will tell you this figure is too high. They’ll tell you a 65-year-old today can buy a lifetime annuity of $10,000 a year for about $130,000, or 13 times as much. But this is a dangerous illusion. It ignores inflation.

Over a decade or two, even mild inflation will seriously erode the real value of a fixed income. If inflation were to jump — a significant possibility — the risk is even bigger. The numbers here are based on real, post-inflation calculations.


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