Students, workers taught to invest in future
Most high school students probably aren't thinking about how to pay their retirement costs.
Yet that doesn't mean that school districts such as Franklin Regional in Murrysville aren't planting the thought in their minds.
With defined contribution pension plans continuing to vanish and Social Security facing an uncertain future, 401(k) type plans are gaining greater emphasis. Because the success of those programs rests largely in the investing savvy of participants, a number of businesses, colleges and high schools are ramping up investment education offerings.
“What we're trying to do is plant the seeds, so students at least begin to think about investing, savings accounts and the cost of living,” Franklin Regional spokesperson Shelley Shaneyfelt said. “We want to get them to think about taking those beginning steps they need to take to becoming financially secure.”
Franklin Regional uses a financial literacy outreach program co-sponsored by Duquesne University and the CFA Society of Pittsburgh. Instruction offered to some upperclassmen at the seminars includes how to diversify an investment portfolio.
“We're in our fourth year of doing this, and we usually do between 10 and 15 presentations a year,” said Thomas Nist, director of graduate studies and Donahue Chair in Investment Management in the Donahue School of Business. “The schools have been very receptive.”
Duquesne's business school investment center exposes students to technologies that investment professionals use. Investment management majors oversee Red and Blue Partners, a university investment fund that seeks to outperform the Russell 2000 Index, which measures the performance of about 2,000 small-cap companies.
Similar offerings are available at the University of Pittsburgh, whose business school in August provided $100,000 in investment funds to students in the Socially Responsible Investment Club. Assistant Business Administration professor Jay W. Sukits, who founded the club in 2007, said it is “set up as an education experience, one that future employers also find very attractive.”
Duquesne, Pitt and Robert Morris University are among employers who offer workers investment education options. In 2011, Robert Morris hired a retirement plan services firm to provide group and individual investment education to its 500 employees.
“Some of the group topics that have been offered include strategies for sustainable income in retirement (and) investing in your children's future,” said Lori A. Carnvale, RMU director of employee benefits and payroll. Topics covered in monthly individual sessions include customized investment allocations, navigating investment vendor websites and investment sustainability.
The Washington-based nonprofit Investor Protection Institute recently tested an investor education program on nearly 8,500 employees in workplaces in Pennsylvania, North Carolina and Wisconsin. It significantly improved participants' investment knowledge based on pre- and post-program testing, institute President Don Blandin said.
Blandin believes his program's future is bright.
“It's extremely effective and easy to implement,” he said. “It will continue to grow and provide a rich financial and investment education experience that delivers excellent results.”
Eric Heyl is a staff writer for Trib Total Media. He can be reached at 412-320-7857 or firstname.lastname@example.org.