Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 14th, 2015
Benefits & Administration
Those Closest to Retirement Feeling Unprepared
The percentage of Boomers feeling extremely or very confident they will have enough money to last throughout retirement has declined significantly, to 27% of Boomers in 2015 from almost four in 10 in 2011. However, 44% believe their financial situation in five years will be somewhat or greatly improved. “Baby Boomers are more optimistic about the future, in part due to market gains in the past couple of years, but also partly because more Boomers remain in the work force still, shoring up savings,” said Cathy Weatherford, president and CEO of IRI, discussing a report, “Boomer Expectations for Retirement 2015,” from IRI during a kickoff call for National Retirement Planning Week.Read more >
The Michigan Supreme Court has ruled that pension changes made in 2012 are constitutional. The reforms require school employees to elect either to contribute 3% of salary to pre-fund health care benefits or forego retiree health care in lieu of a 2% matching contribution into the state’s defined contribution plan.Read more >
Still Hope for In-Plan Lifetime Income Options
Kelli Hueler, president and CEO, Hueler Companies, says the No. 1 reason defined contribution (DC) retirement plan sponsors should make lifetime income solutions available to plan participants is that they are facing one of most difficult financial decisions they will have in their lifetime: how to pay themselves without running out of resources in retirement. “We see a lot of smart, dedicated folks working on new products for each demographic group,” she tells PLANSPONSOR.Read more >
Amid high levels of financial stress, a quarter of Americans believe a financial plan would alleviate their anxiety, a survey says. Nearly nine in 10 of Americans (86%) say they feel stress when it comes to their finances, with women (89%) and younger respondents between the ages of 18 and 44 (91%) the most anxious about their finances, according to a survey conducted by ORC International on behalf of the Certified Financial Planner Board of Standards.Read more >
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Building Inclusivity Into Employee Benefits
Public Pensions Keeping Pace with Improved Longevity
The Center for State and Local Government Excellence’s issue brief, “How Will Longer Lifespans Affect State and Local Pension Funding?,” asks two questions: What would happen if public plans were required to use the new mortality tables designed for private-sector plans? What would happen if they were to fully incorporate the expected future mortality improvements? The answer: not much. According to the brief, on average public plans underestimate life expectancy by about six months, compared to the private-sector standard. Adopting the new mortality tables would lead to a 1 percentage point difference in funded status—from 73% to 72%.Read more >
Retirement plan sponsors polled continue to express deep pessimism about service providers and retirement advisers, with trust in financial institutions at 8% (a slight dip from 2014’s 9%) and trust in their current plan provider at 58%, a loss of seven percentage points from last year’s 65%. Survey respondents assessed their trust in a current provider by levels of agreement with the statement they “can always trust their provider to do what is right,” according to the Second Annual Plan Sponsor Trust & Confidence Study by the National Association of Retirement Plan Participants (NARPP).Read more >
Products, Deals & People
Heather Beatty joins the TCW Group as senior vice president, institutional marketing. Heather Beatty, a client services expert with TCW, will manage relationships with the global asset management firm’s institutional investment clients on the West Coast.Read more >
Market Mirror

Yesterday, the Dow fell 80.61 points (0.45%) to 17,977.04, the NASDAQ was down 7.73 points (0.15%) at 4,988.25, and the S&P 500 lost 9.57 points (0.46%) to finish at 2,092.49. The Russell 2000 decreased by 0.82 (0.06%) to 1,265.59, and the Wilshire 5000 closed 87.66 points (0.39%) lower at 22,187.13.

On the NYSE, 3.2 billion shares changed hands, with 1.6 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a slight lead for decliners.

The price of the 10-year Treasury note increased 5/32, bringing its yield down to 1.931%. The price of the 30-year Treasury bond was up 2/32, decreasing its yield to 2.580%.

Compliance
Calmer Perspectives on Tibble Fee Case
Despite enormous industry attention paid to the case, some attorneys say a pending Supreme Court decision in the Tibble v. Edison retirement plan fee litigation may not be so impactful after all.Read more >
From the Magazine
Data-Driven Outcomes
Nearly every major retirement plan provider now offers a data analytics tool that purports to help plan sponsors determine how best to improve their plan design and participant outcomes. But how do data analytics work, and how can sponsors use such tools to perfect their plans?Read more >
Small Talk

ON THIS DATE: In 1818, Noah Webster, a Yale-educated lawyer with an avid interest in language and education, published his “American Dictionary of the English Language.” In 1865, John Wilkes Booth, an actor and Confederate sympathizer, fatally shot President Abraham Lincoln at a play at Ford’s Theater in Washington, D.C. In 1902, James Cash (J.C.) Penney opened his first retail store in Kemmerer, Wyoming. It was called the Golden Rule Store. In 1912, just before midnight in the North Atlantic, the RMS Titanic failed to divert its course from an iceberg, ruptured its hull, and began to sink. In 1969, the 41st annual Academy Awards was broadcast live to a television audience in 37 nations—the first time the awards had been televised worldwide. In 1981, America’s first space shuttle, Columbia, returned to Earth after a three-day test flight. The shuttle orbited the Earth 36 times during the mission.

 

TUESDAY TRIVIA: The actual statutes for the current U.S. tax code total 2,652 pages; the statutes plus additional Internal Revenue Service (IRS) guidance total about 9,000 pages; and adding relevant case law makes the tax code total more than 70,000 pages.

TRIVIAL PURSUITS: What is the average amount of individual income tax refunds issued so far in the 2015 filing season?Read more >
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