cubicles with call center workers (Photo: Shuttestock)

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The country's largest service providers to 401(k) plans are increasing call center staffin some cases, and in others directing employees to work remotely in response to unprecedentedeconomic uncertainty amid the coronavirus pandemic, according to recentemails and conversations with industry leaders.

Edelman Financial Engines

"We have increased the number of advisors available through ourcall center in Phoenix," said Kelly O'Donnell, executive vicepresident and head of workplace at Edelman Financial Engines.

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"To ensure no disruptions in client servicing, we've beenpreparing advisors and other employees to work remotely and areshifting the majority of our call center advisors working from homewith no interruption in client services," she added.

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Call center volume has been as high as eight times the typicalday.

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"We are seeing a dynamic that is different than other marketevents given participant concern for their family's safety andhealth causing even more stress and the desire to talk withsomeone," said O'Donnell in an email.

Empower Retirement

On Thursday, March 12, the Dow Jones Industrial Average dropped10 percent, and the S&P 500 Index officially entered bearmarket territory.

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Four-digit swings have been the norm for a couple of weeks—days,during the coronavirus pandemic, seem like weeks, or months.

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Empower Retirement's call center saw call volume top nearly 50percent of a typical day by mid-day Thursday. On-line activity wasup 50 percent.

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"We know market volatility raises questions and fears, but theretirement investor has been resilient," said Ed Murphy, presidentand CEO of Empower Retirement, in an email.

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"It can be tempting to exit the market, thinking that one wouldavoid losses and then could re-enter the market at the right time.But timing the market is rarely successful. Based on our calls, wethink the message of holding steady has resonated with investorsand there is less of a knee jerk reaction than in years past duringmarket volatility," added Murphy.

Vanguard

Vanguard has been monitoring trading activity among all itsaccounts, including 401(k)s, since February 19.

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"Defined contribution participants have the lowest incidence oftrading—they barely trade at all," said Jean Young, senior researchassociate at the Vanguard Center for Investor Research.

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"Overall DC household trading has trended down over the pastdecade as utilization of target-date funds have trended way up,"she added.

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Over half of Vanguard's defined contribution participants areinvested in a single target-date fund, meaning their retirementsavings is adequately balanced, particularly if they are older.That's helped assuage some of the overall equity sell off, notedYoung.

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Nevertheless, the average retirement saver in a 401(k) measurestheir retirement security by their plan's account balance.

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"These days, when they see their account balance, they're notfeeling as good. The account balance is rose-colored glasses formeasuring retirement security. We remind sponsors that you can'tmeasure retirement readiness from a 401(k) balance. You have tohave the long game in mind," said Young.

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And during market panics, "you have to let it ride," sheadded.

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The average age of a Vanguard participant is 46—old enough tohave experienced the financial crisis, and even the technologyrecession at the turn of the century, and young enough to have timeto recover, in spite of the novelty of the coronavirus threat tothe economy.

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For those much closer to retirement, or in retirement, these areundoubtedly frightening days.

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"By and large, when we study those that leave their employer intheir 60s, we find they are consolidating their wealth outside ofthe plan—they are rolling assets into IRAs. We also know peoplecontinue to save into their mid 80s, and that people aren't taking401(k) distributions until they hit the required age," saidYoung.

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"How to draw down assets will be unique for each household. Thisis the time for advice," she added.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.