Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 15th, 2015
Benefits & Administration
Many Retirees Wish They Left the Workforce Earlier
New York Life survey reveals retirees between the ages of 62 and 70 with at least $100,000 of liquid assets would prefer to add four or five years to the front end of their retirement, could they go back and start again under the same late-career circumstances. These individuals say they want to go back and retake the years when they were healthiest, most active and able to get the most out of their retirement savings, explains David Cruz, senior managing director, New York Life.Read more >
The California Public Employees’ Retirement System (CalPERS) reported that annual ongoing costs for its investment operations have declined by approximately $90 million for the five-year period from 2009 to 2014. Contributors to the savings include a continued focus on restructuring portfolios, reducing external management fees and the number of external consultants, as well as additional insourcing of investment management functions.Read more >
Ask the Experts
Ask the Experts – Who Is the Plan Administrator?
“Do the Experts know who/what is the Plan Administrator? The 5500 requests a signature of the Plan Administrator, but otherwise I do not see a reference to this term anywhere. Is it a plan fiduciary? Some other person or entity?  Can it be a third party?”Read more >
Products, Deals & People
Rebranded as Verus Advisory Inc. and Verus Investors LLC, the former Wurts & Associates is looking to double down on its investment research and consulting services.Read more >
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Economic Events

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for February, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,313.1 billion, virtually unchanged from January, but down 1.2% from February 2014. 

Advance estimates of U.S. retail and food services sales for March, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $441.4 billion, an increase of 0.9% from the previous month, and 1.3% above March 2014. Total sales for the January through March period were up 2.2% from the same period a year ago.

The Producer Price Index (PPI) for final demand increased 0.2% in March, according to the Bureau of Labor Statistics. Final demand prices moved down 0.5% in February and 0.8% in January. In March, the index for final demand goods advanced 0.3% and prices for final demand services rose 0.1%.

Market Mirror

Rising oil prices helped push the stock market mostly higher on Tuesday, but the gains were tiny as investors weighed mixed results from companies reporting earnings, according to the Associated Press. The Dow gained 59.66 points (0.33%) to finish at 18,036.70, the NASDAQ was down 10.96 points (0.22%) at 4,977.29, and the S&P 500 was up 3.41 points (0.16%) at 2,095.84. The Russell 2000 decreased by 0.23 (0.02%) to 1,265.35, and the Wilshire 5000 closed 31.70 points (0.14%) higher at 22,218.83.

On the NYSE, 3.2 billion shares traded, with 1.7 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares changed hands, with a slight lead for decliners.

The price of the 10-year Treasury note was unchanged, with its yield at 1.899%. The price of the 30-year Treasury bond was up 1/32, decreasing its yield to 2.543%.

Compliance
DOL Outlines Broad Strokes of Fiduciary Rule
Language underlying a revised “consumer protection proposal” from the Department of Labor (DOL) has been made public—representing the latest step forward in a years-long effort by the DOL to strengthen investment advice and conflict of interest standards. Matching the expectations of some industry practitioners and analysts, the DOL appears to be taking an exemptions-based approach to a stronger fiduciary standard. As explained by Labor Secretary Thomas Perez during a national media call, the DOL expects its rule to significantly expand the number of advisers and brokers who will be considered fiduciaries in the context of investment advice.Read more >
As expected, financial services advocacy groups have plenty to say on the proposed fiduciary rule by the Department of Labor (DOL). The Financial Services Institute (FSI) expressed disappointment with the amount of time—50 days—that the Office of Management and Budget (OMB) took to review the rule, which they called “highly controversial.” The rule could negatively impact millions of investors, the FSI said in a statement that cited the office taking an average 117 days to review DOL rules.Read more >
New York Moves to Set Pension Risk Transfer Rules
Filed as Senate Bill 1092 and Assembly Bill 6796, a new initiative in the New York State Legislature seeks to expand and strengthen scrutiny paid to pension risk transfer transactions enacted by employers in the state. State Senator Tony Avella, a Democrat from New York’s 11th District, introduced the bill alongside Assembly Member Peter Abbate, a Democrat from the 49th District. The identical bills would require that companies moving to convert pensions to annuities provide “proper disclosures related to the transaction for all impacted retirees.”Read more >
Lawmakers Urged to ‘Adjust’ Health Care Law
During testimony at two different U.S. House committee hearings, witnesses urged lawmakers to repeal certain provisions of the Patient Protection and Affordable Care Act (ACA) and modify others. While there was at least one witness at each hearing stating that the ACA has in part controlled health care costs and has not had the adverse effect on labor as predicted, most testified that there is increased administration and some confusion caused by certain provisions, and expected future costs are feared by employers.Read more >
Small Talk
What Tax Refund Use May Say About Someone
Americans of different economic status have differing ideas about income tax refunds, according to recent surveys. Among 1,049 affluent investors surveyed in February by John Hancock Financial, half said they expect to receive a 2014 Federal income tax refund, and 52% of that group will funnel their check into a savings account, while 25% plan to pay down debt. A separate poll of 4,000 American adults ages 18 and older finds Americans who say they have poor credit scores are more likely than those claiming excellent credit scores to agree that tax refunds are to be used for fun purchases.Read more >

ON THIS DATE: In 1783, the Continental Congress of the United States officially ratified the preliminary peace treaty with Great Britain that was signed in November 1782. In 1865, U.S. President Abraham Lincoln died from an assassin’s bullet shot by John Wilkes Booth at Ford’s Theater in Washington, D.C., the night before. In 1892, the General Electric Company was organized. In 1912, the RMS Titanic, billed as unsinkable, sunk into the icy waters of the North Atlantic after hitting an iceberg on its maiden voyage, killing 1,517 people. In 1923, insulin became generally available for people suffering with diabetes. In 1947, Jackie Robinson, at age 28, became the first African-American player in Major League Baseball. In 1990, the enigmatic Swedish film star Greta Garbo died at the age of 84, in New York City. In 1997, Christopher Reeve received a star on the Hollywood Walk of Fame. In 2013, two bombs went off near the finish line of the Boston Marathon, killing three spectators and wounding more than 260 other people in attendance.

 

WEDNESDAY WISDOM: “Be as you wish to seem.”—Socrates, Greek philosopher

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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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