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EMPLOYERS REVAMPING SAVINGS PLAN INVESTMENT STRATEGIES; EMPLOYEE CONTRIBUTIONS IN GIC'S SHRINKING

 EMPLOYERS REVAMPING SAVINGS PLAN INVESTMENT STRATEGIES;
 EMPLOYEE CONTRIBUTIONS IN GIC'S SHRINKING
 PRINCETON, N.J., Nov. 10 /PRNewswire/ -- Employees are beginning to show signs of changing their retirement savings patterns as employers take initiatives to revamp their savings plan investment strategies, a new survey reports.
 The nationwide survey found a growing number of employers are giving employees more choices in their savings plan investments and allowing them to transfer funds between options more frequently. Additionally, large employers continue to shy away from traditional GIC products.
 The survey, conducted by Foster Higgins, the New York-based employee benefits consulting firm, is based on responses from 721 employers who sponsor savings plans such as 401(k) plans.
 "Employers are reacting to a changing investment climate," said Brian Ternoey, principal in charge of Foster Higgins Investment Services Group. "Not only are employers redesigning their plans, they're also boosting their education efforts to help employees better understand their investments and the underaccumulation risks associated with long- term savings goals."
 Nearly three-fourths (71 percent) of the respondents surveyed planned to add investment options in 1992. Most were doing so either to address participant concerns over GICs or simply to give employers more investment control. Only 15 percent changed their plan to comply with the Labor Department's 404(c) regulations, although the final regulations had not yet been issued when the survey was conducted.
 More than four of 10 employers (43 percent) said they plan to move away from traditional GIC-type arrangements.
 The number of employers offering GICs and their equivalents declined in 1992 while equity, balanced, bond and money market funds grew sharply. GIC funds dropped from 71 percent in 1991 to 64 percent in 1992. Actively managed equities rose from 61 percent to 73 percent; money market funds grew from 36 percent to 51 percent; balanced and bond funds also increased to 39 percent, up from 27 percent and 25 percent, respectively.
 While GICs remain the most popular investment choice among employees, the average portion of their contributions into GIC options dropped from 58 percent in 1991 to 54 percent in 1992.
 After GICs employees favored equity and company stock funds, followed by money market, balanced and bond funds.
 /delval/
 -0- 11/10/92
 /CONTACT: Ed Emerman of Foster Higgins, 609-520-2766/ CO: Foster Higgins ST: New Jersey IN: SU: ECO


MJ-JS -- PHFNS1 -- 9050 11/10/92 07:31 EST
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Publication:PR Newswire
Date:Nov 10, 1992
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