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BOSTON, Sept. 9, 2020 /PRNewswire/ - John Hancock
Retirement continues to observe resiliency in retirement
savers despite the COVID -19 pandemic. Through the economic
uncertainty and market volatility, the majority of the more than 1
million participants in over 1,900 John
Hancock open architecture plans have maintained allocations
to their retirement savings. John Hancock Retirement's participant
data shows that an equal percentage of participants lowered their
contribution rate in July 2020 as in
July 2019, and while overall
distribution activity was higher than July of last year, less than
one percent of participants are taking the coronavirus-related
distributions (CRDs) permitted by the Coronavirus Aid, Relief,
and Economic Security (CARES) Act. Additionally, less than one
percent made any changes to their investments, similar to
July 2019.
Since the beginning of the COVID-19 pandemic in the U.S., John
Hancock Retirement has supported participants, advisors, and
sponsors alike with a robust market volatility engagement program
and in-depth articles on participant behavior.
"The data we have observed since March is very encouraging and
is in keeping with what we know about retirement readiness and the
effectiveness of retirement plan design, including the behavior of
participants, the outcomes they're experiencing, and how they
impact the journey toward a secure retirement, said Lynda Abend, Chief Data Officer, John Hancock
Retirement.
Prior to the COVID-19 pandemic, John Hancock Retirement observed
participant behavior and data consistent with effective plan
design, participant education and engagement in its State of the
Participant 2020 Study. The study showed that a retirement-ready
majority is within reach, with the majority of 401(k) participants
(under age 50) already considered secure for retirement. The data
also uncovered the impressive outcomes of automatic enrollment and
increase features, as well as the risks investors take when
improperly allocating to equities for their specific profiles.
"We cannot underestimate the power of the successful innovations
in plan design that continue to promote retirement readiness," said
Scott Francolini, Head of Strategic
Relationship Management & Consulting, John Hancock Retirement.
"Through economic uncertainty and regardless of the economic cycle,
every plan decision has an impact on the potential success of its
participants."
Additional findings from the State of the Participant 2020 Study
included:
- Participants under age 50 are more likely to be
retirement-ready: Younger 401(k) participants are on track for
retirement-readiness, with rates declining after age 49.
Participants aged between 30 and 39 were the most retirement-ready
at 66 percent, followed by those younger than 30 at 60 percent, and
participants aged 40 through 49 at 53 percent. John Hancock defines retirement-readiness as the
expected ability for a participant's projected assets at normal
Social Security age to replace at least 70 percent of their
preretirement earnings.
- Automatic enrollment and increases continue to drive
retirement-readiness: Auto features—automatic enrollment and
automatic increases (which escalate employee contribution rates
each year)—can make a profound difference in supporting
retirement-readiness. The positive effects of these features get a
boost when they're used together. For example, 63 percent of
participants, whose plans included automatic enrollment, with a
default contribution rate of 6 percent, and auto increase, were
retirement-ready, while less than half (48 percent) of participants
without these auto features were retirement-ready.
- Participants are Investing too Conservatively or
Aggressively Based on Age: The 2020 study found that the
current asset mix of participants who choose their own investments
may be under or over-allocated to equities. The data shows that all
populations could use additional guidance to maintain recommended
allocations whether it's through education, direct advice, or an
introduction to managed accounts or target-date fund
investing.
"We are all too aware of the impact that the COVID-19 pandemic
has had on our families, friendships, communities, and how we live
and work," continued Ms. Abend. "Because of the concerns about the
future, and other unknowns highlighted by the pandemic, optimizing
retirement security has perhaps never been more important.
Understanding how participants are responding during this time will
help us see where participants, sponsors and advisors need the most
support and where we can react with customized tools, education and
communication to close those gaps in retirement-readiness."
For more information on July participant data, please click
here. For the State of the Participant 2020 report, including tips
for overall retirement readiness, please click here.
Methodology
All participant data mentioned above is John Hancock's internal data as of July 31, 2020, for the open-architecture platform
only. As of March 31, 2020, the
open-architecture platform included approximately 1.3 million
participants and 1,963 plans.
The 2020 State of the Participant data was pulled from
John Hancock's open-architecture
platform, which included 1.2 million participants, 1,123 plans, and
$77.48 billion in assets under
management as of September 30,
2019.
About John Hancock Retirement
John Hancock Retirement
is the U.S. retirement business of Manulife Investment Management.
For nearly 50 years, we've helped people plan and invest for
retirement; today, we're one of the largest full-service providers
in the United States.¹ We take a hands-on consultative
approach based on the idea that no two plans - and no two plan
participants - are exactly alike. We partner with plan sponsors,
financial professionals, and third-party administrators to ensure
that every plan is personal to the participant and helps deliver
results.
As of June 30, 2020, John Hancock serviced over 51,000 retirement
plans with over 3 million participants and over $177 billion in AUMA. 2
1 "2020 Defined
Contribution Recordkeeper Survey," PLANSPONSOR, 2020.
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2. As of June 30,
2020, John Hancock Life Insurance Company (USA) supported 46,942
plans, 1,590,762 participants, and $88,315,505,455 in AUMA. John
Hancock Life Insurance Company of New York supported 2,511 plans,
78,978 participants, and $5,286,691,809 in AUMA. John Hancock
Retirement Plan Services, LLC supported 2,009 plans, 1,348,513
participants, and $83,944,095,426 in AUMA. Participant Counts
reflect all active participants with a balance. Approximate
unaudited figures for John Hancock, provided on a U.S. statutory
basis.
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About Manulife Investment Management
Manulife Investment Management is the global wealth and asset
management segment of Manulife Financial Corporation. We draw on
more than a century of financial stewardship and the full resources
of our parent company to serve individuals, institutions, and
retirement plan members worldwide. Headquartered in
Toronto, our leading capabilities
in public and private markets are strengthened by an investment
footprint that spans 17 countries and territories. We complement
these capabilities by providing access to a network of unaffiliated
asset managers from around the world. We're committed to
investing responsibly across our businesses. We develop innovative
global frameworks for sustainable investing, collaboratively engage
with companies in our securities portfolios, and maintain a high
standard of stewardship where we own and operate assets, and we
believe in supporting financial well-being through our workplace
retirement plans. Today, plan sponsors around the world rely on our
retirement plan administration and investment expertise to
help their employees plan for, save for, and live a better
retirement.
As of June 30, 2020, Manulife
Investment Management had CAD$900
billion (US$660 billion) in
assets under management and administration. Not all offerings
are available in all jurisdictions. For additional information,
please visit manulifeim.com.
John Hancock Retirement Plan Services, LLC• 200 Berkeley Street
• Boston, MA 02116
NOT FDIC INSURED. MAY LOSE VALUE. NOT BANK GUARANTEED.
© 2020 John Hancock. All rights reserved.
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SOURCE John Hancock Retirement