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Someone is saving
Old 06-12-2007, 07:17 AM   #1
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Someone is saving

I was just looking at the annual report for our company savings plan (401K) Looks like people are doing a good job of building the nest egg. They all have a pension too.


A total of 9,314 persons were
participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons
had yet earned the right to receive benefits.

The value of plan assets, after subtracting liabilities of the plan, was $1,030,989,614 as of June 30, 2006,
compared to $931,663,899 as of July 1, 2005.
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Old 06-12-2007, 10:18 AM   #2
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Nice, $110k per employee, on average. (Or a CEO with 10mil and a bunch of minimum wage earners)
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Old 06-12-2007, 10:23 AM   #3
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If I subtract this years value from last year's, then divide by the number of participants, then it works out to an average increase of $10k per person.

I suppose that's pretty good, considering that some of the participants are drawing money out.

Not bad!
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Old 06-12-2007, 11:57 AM   #4
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It looks to me like no one is saving at all. The growth from just being invested in the stock market for that June 2005 to June 2006 was more than the growth in the 401k assets. Or folks are invested in the stable value fund. For that time period, a foreign index EFA was up 29% and emerging markets up 39%, while the US total stock market was up 9%.

I realize that some folks would be invested in fixed income, but the 11% increase stated for this plan does not look particularly special.
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Old 06-12-2007, 12:01 PM   #5
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Also the CEO is limited in the amounts she can contribute just like anyone else. That's why CEO's often don't care about a 401k plan. They may have $250K in the plan with $10 million elsewhere. If they added $15,500 to the plan it's no big deal for them.
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Old 06-12-2007, 12:24 PM   #6
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Here's a little more of the story. I shouldn't have trimmed out all the gory details.



Benefits under the plan are provided through insurance and through a trust fund. Plan expenses were
$48,949,423. These expenses included $79,879 in administrative expenses, $48,841,131 in benefits
paid to participants and beneficiaries, and $28,413 in other expenses. A total of 9,314 persons were
participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons
had yet earned the right to receive benefits.

The value of plan assets, after subtracting liabilities of the plan, was $1,030,989,614 as of June 30, 2006,
compared to $931,663,899 as of July 1, 2005. During the plan year the plan experienced an increase in
its net assets of $99,325,715. This increase includes unrealized appreciation and depreciation in the
value of plan assets; that is, the difference between the value of the plan's assets at the end of the year
and the value of the assets at the beginning of the year or the cost of assets acquired during the year.
The plan had total income of $148,275,138 including employer contributions of $18,162,302, employee
contributions of $62,084,973, and earnings from investments of $65,563,206.
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Old 06-12-2007, 01:32 PM   #7
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It's even worse than I thought. Earnings from investments is about the same as money market rates. The folks in the plan are either very conservative or they are getting their butts taken to the cleaners by all the fees. These extra expenses and fees are not seen in the plan summary because they are taken out of the "earnings from investments" before y'all see them. Ouch!
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Old 06-12-2007, 02:01 PM   #8
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Quote:
Originally Posted by UncleHoney View Post
A total of 9,314 persons were
participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons
had yet earned the right to receive benefits.

The value of plan assets, after subtracting liabilities of the plan, was $1,030,989,614 as of June 30, 2006,
compared to $931,663,899 as of July 1, 2005.
Curious, how many employees in your company, ie, what is your
participation rate?
TJ
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Old 06-12-2007, 02:26 PM   #9
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Quote:
Originally Posted by LOL! View Post
It's even worse than I thought. Earnings from investments is about the same as money market rates. The folks in the plan are either very conservative or they are getting their butts taken to the cleaners by all the fees. These extra expenses and fees are not seen in the plan summary because they are taken out of the "earnings from investments" before y'all see them. Ouch!
It's a very conservative crowd and the fees are low, Vanguard.
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Old 06-12-2007, 07:06 PM   #10
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Quote:
Originally Posted by UncleHoney View Post
I was just looking at the annual report for our company savings plan (401K) Looks like people are doing a good job of building the nest egg. They all have a pension too.


A total of 9,314 persons were
participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons
had yet earned the right to receive benefits.
I wonder....since it references people who have "not yet earned the right to receive benefits", as well as "Benefits under the plan are provided through insurance and through a trust fund.", are the summaries you quoted referencing your company's pension plan?
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Old 06-12-2007, 09:33 PM   #11
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Quote:
Originally Posted by MooreBonds View Post
I wonder....since it references people who have "not yet earned the right to receive benefits", as well as "Benefits under the plan are provided through insurance and through a trust fund.", are the summaries you quoted referencing your company's pension plan?
I was wondering about that. I don't have access to the info this evening but will look at it tomorrow. I know this data pertains to the savings plan, but the funding comment may relate to the company contribution. As for earning the rights to benefits, there is a vesting period of 36 months before you own 100% of the company contribution.
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Old 06-13-2007, 05:45 AM   #12
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Quote:
Originally Posted by MooreBonds View Post
I wonder....since it references people who have "not yet earned the right to receive benefits", as well as "Benefits under the plan are provided through insurance and through a trust fund.", are the summaries you quoted referencing your company's pension plan?
A little further investigation into the 401K plan. At the inception the plan was managed in-house (1982) as a trust fund. There were very few investment options as I remember and before tax deposit were not available until about 1985. At the start, if I remember correctly, the fund was at Nationwide Insurance Co.

This is what I was able to find about the current plan. One of the investment options is a stable value fund that is a mix of funds and some is still invested with Nationwide so that must be the insurance reference.

The following is a summary of the Employees’ Savings Plan (the “Plan”) as of January 1, 2007. The Plan is a defined contribution plan that permits before-tax and aftertax staff member contributions and provides for matching employer contributions, to give you the opportunity and incentive to save for your retirement. The Company is the Plan sponsor and Plan Administrator of the Plan. The Company has delegated much of the day-to-day administration of the Plan, such as maintenance of employee accounts and administration of contributions, distributions, and participant elections to the Plan’s third party administrator, Vanguard.

The Company has established a trust fund to hold funds contributed to the Plan. Each Plan participant has a separate account in the trust fund to hold the participant’s share of contributions and earnings or losses.
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