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  • Employees in Sprint Nextel Dial up An Average 401K Retirement Plan

    03/22/2011

     

    Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint Nextel was founded in 1899 and is headquartered in Overland Park, Kansas. Recently, AT&T (T) announced its plan to acquire T-Mobile USA, putting enormous pressure to Sprint Nextel, ranked only as a distant the third largest mobile phone service provider in the U.S.

    In this article, we review Sprint Nextel 401K Plan. We will discuss how participants in the plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.

    Sprint Nextel 401K Plan's 401K plan consists of 29 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income. Four Core Asset ETF (EM) Benchmark's 401K plan consists of 4 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income.

    The following table lists its fund choices:

    Asset Class Ticker Name
    LARGE VALUE TWEIX American Century Equity Income Inv
    SMALL VALUE DFSVX DFA US Small Cap Value I
    Mid-Cap Growth HAMGX Harbor Mid Cap Growth Instl
    High Yield Bond PHIYX PIMCO High Yield Instl
    WORLD BOND PFUIX PIMCO Foreign Bond
    WORLD STOCK GMGEX GMO Global Equity Allocation III
    SMALL BLEND IWM iShares Russell 2000 Index
    Foreign Large Blend EFA iShares MSCI EAFE Index
    LARGE BLEND SPY SPDR S&P 500
    MID-CAP BLEND MDY SPDR S&P MidCap 400
    Multisector Bond SMARX Brandes Separately Managed Acct Res Tr
    Multisector Bond SMARX Brandes Separately Managed Acct Res Tr
    Intermediate-Term Bond AGG iShares Barclays Aggregate Bond
    ROOT CASH CASH
    DIVERSIFIED EMERGING MKTS EEM iShares MSCI Emerging Markets Index
    Foreign Large Blend VGTSX Vanguard Total Intl Stock Index Inv
    LARGE GROWTH VWUSX Vanguard US Growth Inv
    LARGE VALUE VIVAX Vanguard Value Index Inv
    Target Date Funds
    Northern Trust Corp

     

    The list of minor asset classes covered by Sprint Nextel 401K Plan The list of minor asset classes covered by Four Core Asset ETF (EM) Benchmark
    Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
    Equity: VTI, VT
    Foreign Large Blend: EFA, VEU, GWL, PFA
    High Yield Bond: HYG, JNK, PHB
    Intermediate-term Bond: AGG, CIU, BIV, BND
    Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
    Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
    Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV
    Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
    Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
    Multisector Bond: AGG, GBF, BND, LAG
    Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
    Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT
    World Bond: IGOV, BWX, WIP
    World Stock: IOO, VT
    Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
    Foreign Large Blend: EFA, VEU, GWL, PFA
    Intermediate-term Bond: AGG, CIU, BIV, BND
    Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX

     

    Asset Class Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark
    Fixed Income 5 1
    Sector Fund 0 0
    Foreign Equity 3 1
    Emerging Market Equity 1 1
    US Equity 19 1
    Other 1 0
    Total 29 4

     

    As of Mar 21, 2011, Sprint Nextel 401K Plan investment choice is rated as average and Four Core Asset ETF (EM) Benchmark investment choice is rated as below average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:

    Attribute Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark
    Diversification above average (83%) poor (8%)
    Fund Quality below average (15%) poor (8%)
    Portfolio Building average (59%) below average (20%)
    Overall Rating average (53%) below average (13%)

     

    The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical 4 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

    US Equity: SPY or VTI
    Foreign Equity: EFA or VEU
    Emerging Market Equity: EEM or VWO
    Fixed Income: AGG or BND

    Performance chart (as of Mar 21, 2011)

    Performance table (as of Mar 21, 2011)

    Currently Commodities, Real Estate and US Equity are doing well. Only US Equity is available to Sprint Nextel 401K Plan participants.

    To summarize, Sprint Nextel offers its employees average rated fund choices. It has strong fixed income funds or portfolios. Some low cost funds such as DFA index fund or S&P index funds are good portfolio building blocks. Actively managed funds such as American Century Equity Income (TWEIX) or GMO Global Equity Allocation (GMGEX)  have been outstanding. The plan can extend its diversification by offering further funds in major asset classes such as REITs as well as some high quality actively managed equity funds.


    Disclosure:

    MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

    Symbols:S,T,SPY,VTI,EFA,VEU,EEM,VWO,AGG,BND,VT,HYG,JNK,PHB,CIU,BIV,GWL,PFA,IVE,IWW,JKF,VTV,ELV,PWV,RPV,SCHV,IGOV,BWX,WIP,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,IJH,IWR,JKG,VO,MDY,EMM,PJG,DON,EZM,MVV,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,GMM,PXH,DEM,SCHE,GBF,LAG,IJK,IWP,VOT,EMG,PWJ,RFG,UKW,TWEIX,DFSVX,HAMGX,PHIYX,PFUIX,GMGEX,

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  • ATT Dials Up A Mediocre Plan

    12/30/2010

    The AT&T Long Term Savings and Security Plan (Plan) is a defined contribution plan established by AT&T Corp. (ATTC) to provide a convenient way for eligible non-management employees of participating ATTC companies to save on a regular and long-term basis.

    We now analyze the AT&T Long Term Savings and Security Plan We will discuss the investment choices and present the plan rating by MyPlanIQ. AT&T and Wal-Mart have similar plans that are restricted in terms of asset classes but we will compare the two as they both Fortune top ten companies.

    The ATT 401K plan consists of 25 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.

     

    Asset Class Ticker Name
    Intermediate-Term Bond VBMFX Vanguard Total Bond Market Index
    Mid-Cap Growth RPMGX T. Rowe Price Mid-Cap Growth
    LARGE BLEND VTSMX Vanguard Total Stock Mkt Idx
    World Allocation RIRFX American Funds Capital Inc Bldr R5
    Foreign Large Blend VGTSX Vanguard Total Intl Stock Index
    Foreign Large Blend INLBX Morgan Stanley International B
    ROOT CASH CASH
    LARGE BLEND LMNVX Legg Mason Value Instl
    LARGE VALUE VWNFX Vanguard Windsor II
    World Allocation PAUIX PIMCO All Asset All Authority Inst
    LARGE GROWTH VWUAX Vanguard U.S. Growth Adm
    Moderate Allocation USBSX USAA Balanced Strategy
    SMALL BLEND TRSSX T. Rowe Price Instl Small-Cap Stock
    Moderate Allocation PAAIX PIMCO All Asset Instl
    Intermediate-Term Bond FBIDX Fidelity U.S. Bond Index
    LARGE BLEND VTSMX Vanguard Total Stock Mkt Idx
    LARGE BLEND VFINX Vanguard 500 Index Investor
    MID-CAP BLEND VEXMX Vanguard Extended Market Idx
    LARGE GROWTH FMAGX Fidelity Magellan
    Foreign Large Blend VGTSX Vanguard Total Intl Stock Index
    LARGE BLEND FDGFX Fidelity Dividend Growth
    MID-CAP BLEND FLPSX Fidelity Low-Priced Stock
    High Yield Bond SPHIX Fidelity High Income
    Foreign Large Growth FDIVX Fidelity Diversified International
    HYBRID ASSETS T AT&T Inc

     

    The list of minor asset classes covered:
    Foreign Large Blend: EFA, VEU, GWL, PFA
    High Yield Bond: HYG, JNK, PHB
    Hybrid Assets:
    Intermediate-term Bond: AGG, CIU, BIV, BND
    Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
    Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
    Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV
    Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
    Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
    Moderate Allocation: AOM
    Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
    World Allocation: AOR, AOA

     

    Asset Class ATT Funds Wal-Mart Funds
    REITs 0 0
    Balanced Fund 4 2
    Fixed Income 3 4
    Commodity 0 0
    Sector Fund 0 0
    Foreign Equity 4 4
    Emerging Market Equity 0 0
    US Equity 12 6
    Other 2 0
    Total 25 16


    We note that the plans are similar in nature with the main difference being in more choices in US and balanced funds. 

    As of Dec 23, 2010, this plan investment choice is rated as above average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:

    Diversification -- Rated as above average (77%)
    Fund Quality -- Rated as average (50%)
    Portfolio Building -- Rated as above average (79%)
    Overall Rating: above average (70%)

    Portfolio Discussions

    The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. For comparison purpose, we also include the moderate model portfolios of a typical 3 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

    US Equity: SPY or VTI
    Foreign Equity: EFA or VEU
    Fixed Income: AGG or BND

    Performance table (as of Dec 23, 2010)

    Currently Commodities, US Equity and Emerging Market are doing well. Only US Equity is available to AT&T Long Term Savings and Security Plan participants.

    This plan beats the three asset benchmark by virtue of the US asset class choices. If would be a stronger plan with more fixed income choices and an additional asset class.

    We now compare the ATT and Wal-Mart plans.

     Performance table (as of Dec 23, 2010)

    As anticipated, the additional fund choices in the asset classes allow the ATT plan to squeeze out an extra point in the TAA although it's too close to call with SAA.

    To summarize, both AT&T and Wal-Mart would benefit their employees by adding an extra asset class such as emerging markets or real estate. They both have similar performance but ATT just wins out by virtue of more fund choices.

     

     labels:investment,

    Symbols:T,SPY,VTI,EFA,VEU,AGG,BND,HYG,JNK,PHB,AOM,CIU,BIV,AOR,AOA,GWL,PFA,IVE,IWW,JKF,VTV,PWV,RPV,SCHV,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IVW,IWZ,JKE,VUG,QQQQ,RPG,SCHG,IJH,IWR,JKG,VO,MDY,EMM,PJG,DON,EZM,MVV,IJR,IWM,JKJ,VB,PJM,DES,SAA,UWM,SCHA,IJK,IWP,VOT,PWJ,RFG,UKW,

     

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