New York Life Retirement Plan Services Sees Uptick in Auto-Enrollment and Managed Savings One Year After Pension Protection Act

Client ThyssenKrupp Materials NA Achieves 95 Percent 401k Plan Participation and 9 Percent Deferral Increases Using These Methods

WESTWOOD, Mass., Dec. 24 /PRNewswire/ -- As a result of the Pension Protection Act (PPA) of 2006, New York Life Retirement Plan Services, a division of New York Life Investment Management, saw a dramatic increase in the client adoption of auto-enrollment and managed savings in 2007.

Analysis of 222 of New York Life's mid-sized, defined contribution clients revealed that plans with an auto-enrollment feature increased from 18 percent to 32 percent between January 1, 2007 and the end of September 2007. Also of note, those same clients deploying managed savings saw an increase from 14 percent to 25 percent in the same time frame.

"When the PPA was passed a year ago, we predicted that it would profoundly change the retirement business, and now we are seeing that statistical evidence in our defined contribution client base," said Don Salama, senior managing director and head of New York Life Retirement Plan Services. "We've also found that when a plan sponsor implements auto-enrollment and managed savings it's just as important, if not more so, for existing employees to benefit as it is for new hires."

Auto-Enrollment

One of the key provisions of the PPA is approval for plan sponsors to automatically enroll all participants into the retirement plan when they reach plan eligibility. According to New York Life client Kathryn Towe Littleton, director of human resources at ThyssenKrupp Materials NA, Inc., auto-enrollment has been a huge boon to the health of her company's retirement plan. In 2005, well before PPA passage, ThyssenKrupp Materials NA, a materials and services provider with North American headquarters in Southfield, Michigan, implemented auto-enrollment at the urging of their Morgan Stanley advisors for all new employees, and subsequently for existing employees in 2006. As a result, the 401k plan has moved from a 78 percent participation rate in 2005 to 95 percent in 2007, among the company's 2100 eligible employees.

"I feel so gratified that we're making a difference in the future retirement lives of our employees," said Littleton. If you're a human resources professional, she said, "Why wouldn't you look at the financial health of your employees just as you look at their physical health. I think we're being a good corporate citizen."

Managed Savings

As industry research attests, asset allocation and fund choice alone are often not enough for many participants to achieve a secure retirement. Plan participants also need to increase their savings over time.

Littleton worked in concert with ThyssenKrupp Materials NA's plan consultants, the Morgan Stanley financial advisor team of Louise A. Emerson, senior vice president, financial advisor, and Craig Brass, first vice president, financial advisor in Birmingham, Michigan to examine their participants' salary deferral rates. Littleton learned that many of their participants had a low deferral rate that resulted in a failure to achieve the organization's generous six percent match. As a result, ThyssenKrupp Materials NA adopted managed savings. For each participant that was not yet deferring a minimum of six percent of their salary, the participant's deferral rate was automatically increased by one percentage point annually until the participant reached the six percent threshold. "The PPA validated for us what we were already doing in this plan and clearly think is the right thing to do," said Emerson.

According to Emerson and Brass, of those participants who were auto-enrolled at ThyssenKrupp Materials NA, 90 percent have stayed enrolled and of that 90 percent, approximately 20 to 30 percent have increased their deferral rate.

About Morgan Stanley

Morgan Stanley (NYSE:MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 32 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

Morgan Stanley, and its Financial Advisors, do not provide tax or legal advice, are not "fiduciaries" (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein, and this material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the tax payer. Individuals are urged to consult with their tax or legal advisor before establishing a retirement plan or to understand the tax, ERISA and related consequences of any investments made under such plan.

About ThyssenKrupp Materials NA

ThyssenKrupp Materials NA, Inc., www.tkmna.thyssenkrupp.com, is a leading provider of production materials and integrated service solutions with over 3,000 employees and 80 locations in North America. With annual sales in excess of US$3.1 billion, the company is focused on value-added processing and distribution of a full line of aluminum, stainless, copper, brass, specialty metals, steel, and plastics. Supply chain management, transportation and logistics, and production support outsourcing solutions are among the many services provided to customers. ThyssenKrupp Materials NA is part of the ThyssenKrupp Services business segment of the ThyssenKrupp AG global group of companies.

About New York Life Retirement Plan Services

New York Life Retirement Plan Services oversees more than 2,100 comprehensive defined contribution, defined benefit and deferred compensation plans as of October 31, 2007. With offices in Westwood, Massachusetts, and Parsippany, New Jersey, New York Life Retirement Plan Services administers retirement programs for small, medium and large companies, multi-employer plans, and individuals throughout the United States, and is widely recognized for its leadership in bundled defined contribution and bundled defined benefit plans.

About New York Life Investment Management

New York Life Investment Management Holdings LLC, ranks among the largest asset management firms in the United States. Through its multiple boutique investment structure, NYLIM delivers investment performance through an array of products designed for both institutional and retail clients. Through MainStay Investments, NYLIM distributes some of the most highly regarded mutual funds and wrap accounts in the industry.

NYLIM is a leading provider of retirement plans for corporations, multi-employer trusts, and individuals, and is recognized as one of the nation's top providers of guaranteed products to both the qualified and non-qualified markets. Together with its affiliates and over 1,500 employees, NYLIM manages over $252 billion in assets as of October 31, 2007.

First Call Analyst:
FCMN Contact:

Source: New York Life Retirement Plan Services

CONTACT: Sarah Lazarus, CL- Media Relations, +1-978-369-4478,
sarah@cl-media.com, or Nancy Paris, New York Life Investment Management,
+1-973-394-4410, Nancy_Paris@nylim.com, both for New York Life Retirement Plan
Services

Web site:

http://www.nylim.com/
http://www.tkmna.thyssenkrupp.com/
http://www.morganstanley.com/

-------
Profile: labor-news