SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Busboy’s holiday

While the 200-some partners at Goldman Sachs Group LP discuss over lunch how to divvy up stock worth as much as $25 billion after next month’s initial public offering, the 110 union employees working in its four cafeterias have to make do on less than $9 an hour and have no affordable health insurance, according to their union.

They’re employed by Restaurant Associates, which manages the cafeterias for Goldman, reports InvestmentNews sister publication Crain’s New York Business. Local 100 of the Hotel and Restaurant Employees union is picketing Goldman’s big brown headquarters, distributing fliers reading, “What does IPO really stand for? It Pays to Organize.”

Going like 40

Nearly half of investors think Social Security needs tweaking, but a full 81% of those 40 and under think it’s time for an overhaul, according to the latest findings of the Index of Investor Optimism, a joint effort of Paine Webber Group Inc. and the Gallup Organization.

The poll of 1,026 people showed the 40-and-under crowd backs proposals to establish individual savings accounts that would invest portions of individual Social Security taxes in financial markets.

Not surprisingly, it’s an idea that Donald Marron, the chief Paine, seems to favor.

A real need to know

But then again, what do investors know? Not much, according to a survey reported in InvestmentNews sister publication Pensions & Investments.

None of the 753 retirement savers interviewed got all 10 questions right in the third annual general aptitude gauge of retirement basics conducted by American Century Investments in Kansas City, Mo.

In fact, 31% of them don’t know that IRA stands for individual retirement account; 10% of them were sure it stands for indivisible retirement allowance. Only 13% of them have converted their IRAs, whatever they are, from conventional to Roth accounts, and only a third plan to fund a Roth this year.

And the findings of another survey – this one of job changers conducted for Fidelity Investments by Richard Day Research – show that knowledge about 401(k) plan options is about as abysmal.

Full-time workers who recently changed, or are about to change jobs – about a third of the work force – cited pay as the most important factor in their decision to leave, but one in four had no idea they had any choice in what to do with the savings in their 401(k)s; only 30% said they were very aware, and the rest said they had a good idea, but some of them apparently fibbed.

A quiz showed that only about one-third of both recent and imminent job changers could actually accurately describe the 401(k) options. One in five recent changers chose a cash distribution, and almost all of them took the money and ran rather than leaving a portion in the plan.

Stock it to ’em

To end with brighter news, another American Century survey, the fourth Retirement Savings Snapshot, shows that the numbers of mutual fund owners rose to 43% from 32%, while 37% of respondents said they owned individual stocks, compared with 29% four years ago.