J.P. Morgan Launches First-of-its-Kind Tool that Provides Companies and Their Advisors A Data-Driven View of Employee Behavior

NEW YORK, Feb. 10, 2014 /PRNewswire/ -- J.P. Morgan Retirement Plan Services has developed a unique data visualization tool that gives sponsors and advisors a vastly improved view into the saving and investing behaviors of 401(k) plan participants. This "Plan Diagnostics Tool" visually presents the interaction of multiple plan design factors on employee outcomes. Companies can quickly recognize patterns in retirement plan usage and make meaningful plan design and targeted communications decisions to help motivate employees to adopt stronger investing habits.

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While other industries already use sophisticated tools to parse and analyze big data, J.P. Morgan is the first retirement plan service provider to offer an interactive tool that enables companies to diagnose their employees' investing behaviors across metrics such as age, salary, geography, years of service, business line, employee role and investment allocation. This innovation was short-listed for an AFTA prize from Waters Technology, a financial technology trade publication.

"The tool enhances J.P. Morgan's ability to help plan sponsors understand participant behaviors and plan dynamics in new ways and identify solutions to help improve retirement outcomes," said David Musto, Chief Executive Officer, Retirement Plan Services. "Furthermore, advisors using this strategic tool are able to better engage and consult with plan sponsors to guide plan design decisions.  It's all part of our mission to develop and deliver practical insights and tools to help people achieve a more secure retirement." 

"While we've always used plan data and analytics in working with our clients, the new tool delivers data that allows us to go much deeper and provides a much clearer window into participant behavior," said Carol Waddell, Head of Product and Marketing. "Now we can show our clients specifically which groups of their employees are on the right path to successful retirement outcomes, which ones are struggling, and most importantly, why. This solution enables advisors and our professionals to make very specific and detailed recommendations to plan sponsors." 

As an example of the in-depth analysis of participants available through the tool, J.P. Morgan is able to plot the equity allocations of a plan's participants on a scattergraph so the plan sponsor can see if younger employees are too conservatively invested with too little equity exposure and if older employees have too much equity exposure. Having a graphical and interactive tool allows the plan sponsor to make very specific and detailed recommendations for plan design changes or communications campaigns to help influence more positive participant savings and investment behavior.

Another important aspect is the tool's ability to show employees' investment returns across a variety of 401(k) retirement strategies, including target date funds, managed accounts, do-it-yourself fund menus and brokerage window options.

By analyzing data using the plan diagnostics tool, J.P. Morgan observed that contributing plan participants on their platform have achieved an average projected income replacement rate of 85%. The data also showed that plan sponsors' decisions to encourage their participants to use target date funds and other managed investment portfolios was a significant contributor to income replacement success. The plan diagnostics tool helped show that investors in target date funds, on a five-year basis (as of Dec. 31, 2013) outperformed investors in core menu portfolios by an average of 100 basis points. Moreover, target date investors beat, on average, brokerage investors by 150 basis points.

Past performance is not indicative of future returns. Total return includes the reinvestment of income.

Source: J.P. Morgan Retirement Plan Services proprietary research.  Analysis measurement period is as-of December 31, 2013. The above data represents a sampling of participant data. Do It Yourselfers are participants with less than 70% of their account balance invested in target date funds or a discretionary investment service as of the first and last day of the measurement period.  The scatter plot and glide path illustrations represent Do It Yourself-ers' equity exposure by age (the blue dots) compared to a range of +/-10% of the J.P. Morgan target date funds' equity allocations at each age (the orange lines). The scatter graphs on the pages showing all J.P. Morgan clients use the equity allocation of 3,000 randomly selected participants so that the chart's data points show clearly. Target Date Fund Users are participants with at least 70% of their account balance invested in target date funds as of the first and last day of the measurement period. Managed Account Users are participants with at least 70% of their account balance managed by a discretionary investment service as of the first and last day of the measurement period. Brokerage Users are participants with at least $1 in a brokerage account as of the last day of the measurement period.

About J.P. Morgan Asset Management – Retirement
J.P. Morgan Asset Management is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement, with defined contribution assets under management of $109 billion, is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement Plan Services provides bundled recordkeeping services to more than 650 clients and two million plan-level participants, representing more than $167 billion in retirement plan assets (as of December 31, 2013).  

About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of $1.6 trillion, is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high-net worth individuals in every major market throughout the world.  J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity.  JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.4 trillion and operations in more than 60 countries.  Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

J.P. Morgan Asset Management is the marketing name for the investment management businesses of JPMorgan Chase & Co. and its affiliates worldwide. Those businesses include, but are not limited to J.P. Morgan Chase Bank, N.A., J.P. Morgan Investment Management Inc., Security Capital Research and Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.

SOURCE J.P. Morgan Asset Management

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