SEI Poll: Plan Sponsors Feel Resources Are Not Aligned With New Post-Reform Priorities
Plan Management Changes Are Being Considered; Reductions in Smoothing Tops List of Concerns
OAKS, Pa., Jan. 9 /PRNewswire-FirstCall/ -- A Quick Poll released today by SEI (Nasdaq: SEIC) reveals that almost half of the participating plan sponsors feel that the new pension rules demand attention in areas where internal resources are not currently focused. The majority of plan sponsors polled feel that managing the financial risks posed by the plan should be the top pension priority. Executives acknowledge, however, that their people are dedicating too much time in other areas. The poll was sponsored by SEI, a leading global provider of outsourced asset management, investment processing and investment operations solutions (None of the participants were current institutional clients).
More than half of those polled said their pension staff is currently spending most of its time on functions such as researching new investment products and selecting managers recommended by a consultant. They cited reductions in smoothing, the 100% funding target, new accounting rules, and revised yield curve discounting as areas that are making plan management more complex. In turn, plan sponsors are considering new investment products and asset allocation strategies which are causing them to realize current processes need to change.
"CFOs realize that they need to take an objective-based risk management approach to their plan," said Jim Morris, Senior Vice President, Retirement Solutions for SEI Global Institutional Group. "However, what many of them have is a consultant-driven, asset-only based process. Pension reform serves as an opportunity for them to re-think their core competencies and to realign their resources to address the needs of the organization."
The poll provided insight into where plan sponsors feel their internal pension investment resources could be redirected to best manage new funding rules. Only 6% felt internal resources should spend the most time completing the evaluation, selection and termination of managers that are recommended by a consultant. While half said their organization is considering adding new investment products in response to reform, a quarter of those polled felt their company should free up resources and outsource the researching of investment products.
A total of 92 U.S. executives responsible for managing defined benefit plans ranging from $30 million to over $5 billion in assets participated. A complete summary of the poll is available by emailing seiresearch@seic.com.
About SEI
SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of the period ending September 30, 2006, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $344.9 billion in mutual fund and pooled assets and manages $168.9 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from more than 20 offices in over a dozen countries. For more information, visit http://www.seic.com.
Contact: Frank Wilkinson Jason Rocker SEI Braithwaite Communications 610-676-1483 215-564-3200 x 10 fwilkinson@seic.com jrocker@braithwaitepr.com SOURCE SEI
Released January 9, 2007