Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 2nd, 2015
2015 Plan Sponsors of the Year
Plan Sponsor of the Year Profile: Gillette Children’s Specialty Healthcare
In April 2010, Gillette Children’s Specialty Healthcare implemented automatic enrollment for its 403(b) plan, defaulting participants at a deferral of 4% of salary. The company offered a match of up to 2% and provided all employees with a discretionary contribution of 3.29%. Still, something was missing. “As we reviewed our participation, deferral rates and average account balances, we determined that the program didn’t encourage employees to contribute to their retirement funds—something we believe is necessary to saving enough for retirement,” says Kit Brady, vice president of human resources (HR), education and guest experience at Gillette.Read more >
Plan Sponsor of the Year Profile: Mary Washington Healthcare
As an organization with a 115-year history, nonprofit Mary Washington Healthcare in Fredericksburg, Virginia, has seen employee benefit trends come and go since well before the creation of Social Security. Its extended organizational history and scope mean there are some challenges with the employee benefits delivery structure, says Kathy Wall, executive vice president of human resources (HR) and organizational development for Mary Washington. “Being a health system, we have many diverse types of employees at different career stages and in different working environments, all trying to get prepared for retirement,” she says. One result of that diverse work force is a complex employer-sponsored retirement plan benefit.Read more >
Benefits & Administration
Private employee stock ownership retirement plans (here limited to S corporation ESOPs) outperformed the S&P 500 total return index in terms of total return per participant by 62% from 2002 to 2012, according to a study by Ernst & Young (EY). Research by EY’s quantitative economics and statistics (QUEST) practice reveals the total return for an average S corporation ESOP participant over the decade was $99,000, implying an 11.5% compound annual growth.Read more >
Data and Research
Early Withdrawals Found to Exacerbate 401(k) Account Disparities Across Race, Gender
Final Fiduciary Rule Expected Soon
Ask the Experts
Are Roth Excess Deferrals Taxed Twice?
J.P. Morgan Offers Updated ‘Guide to Retirement’
A wide range of factors can cause people to retire earlier than expected, new J.P. Morgan research finds, but U.S. workers rarely plan for an earlier-than-anticipated retirement, and most overestimate their ability to work beyond age 62. This overestimation can be hugely damaging to individuals’ retirement prospects, according to the 2015 “Guide to Retirement” report from J.P. Morgan Asset Management (JPAM). Even a successful retirement saving effort can be derailed by an unanticipated early retirement, the report finds, so it’s critical for people to perform scenario testing to assess their risks. They should also proactively identify ways to mitigate the damage of an early retirement, perhaps by taking advantage of insurance products or supplemental retirement accounts.Read more >
Products, Deals & People
Jim Stewart has joined Buck Consultants at Xerox as a principal in the firm’s wealth practice. Buck says his expertise in defined benefit (DB) and defined contribution (DC) plans helps clients design and manage their retirement programs to balance their company objectives and participant needs, the firm notes.Read more >
Hueler Makes QLACs Available to DC Plans
Hueler Companies has expanded its Income Solutions service to include qualified longevity annuity contracts (QLACs). “We believe the new QLAC regulations give American workers and retirees a very important planning tool and much needed flexibility as they make difficult decisions about how to use their hard-earned retirement savings to create sustainable income. QLACs can help ensure sufficient income later in life as Americans anticipate longer, healthier retirement years,” says Kelli Hueler, CEO of Hueler Companies.Read more >
Ray McGrath joins Cammack Retirement Group as an investment consultant; Svetlana Knorr and Mari Tsagareishvili have been hired as investment analysts. The three will conduct fundamental investment analysis, selection, evaluation, and monitoring of mutual funds, separate accounts, variable annuities, and insurance company fixed-income products for Cammack Retirement’s clients.Read more >
State Street Corporation announced that Scott Powers, president and chief executive officer of State Street Global Advisors (SSgA), intends to retire later this year after more than seven years leading the firm and three decades in the investment management industry. Ronald O’Hanley will succeed Powers at the beginning of April, the firm says.Read more >
Economic Events
The U.S. Census Bureau of the Department of Commerce announced that construction spending during February was estimated at a seasonally adjusted annual rate of $967.2 billion, 0.1% below the revised January estimate of $967.9 billion. The February figure is 2.1% above the February 2014 estimate of $947.1 billion. During the first two months of this year, construction spending amounted to $132.9 billion, 2.0% above the $130.3 billion for the same period in 2014.
Market Mirror

A batch of discouraging economic news deepened investors’ concerns about corporate earnings, pulling major U.S. stock indexes down on Wednesday for the second day in a row, according to the Associated Press. The Dow fell 77.94 points (0.44%) to 17,698.18, the NASDAQ lost 20.66 points (0.42%) to finish at 4,880.23, and the S&P 500 closed 8.20 points (0.40%) lower at 2,059.69. The Russell 2000 decreased by 1.06 (0.08%) to 1,251.71, and the Wilshire 5000 was down 78.85 points (0.36%) at 21,869.06.

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

The price of the 10-year Treasury note was down 4/32, increasing its yield to 1.873%. The price of the 30-year Treasury bond decreased 7/32, bringing its yield up to 2.476%.

DOL Requests Continued Authority for Fee Disclosure Collection
The Department of Labor (DOL) has sent an information collection request to the Office of Management and Budget (OMB) asking for an extension of approval to collect fee information from service providers. The DOL is asking the OMB to extend its Paperwork Reduction Act (PRA) authorization for three more years, without any change to existing requirements.Read more >
Small Talk
ON THIS DATE: In 1513, near present-day St. Augustine, Spanish explorer Juan Ponce de Leon came ashore on the Florida coast, and claimed the territory for the Spanish crown. In 1865, Confederate President Davis and most of his Cabinet fled the Confederate capital of Richmond, Virginia. In 1877, the first Egg Roll was held on the grounds of the White House in Washington, D.C. In 1914, the U.S. Federal Reserve Board announced plans to divide the country into 12 districts. In 1917, President Woodrow Wilson asked Congress to send U.S. troops into battle against Germany in World War I. In 1917, Jeannette Pickering Rankin, the first woman ever elected to Congress, took her seat in the U.S. Capitol as a representative from Montana. In 1956, “The Edge of Night” and “As the World Turns” debuted on CBS-TV. In 1992, a jury in New York found mobster John Gotti, nicknamed the Teflon Don for his ability to elude conviction, guilty on 13 counts, including murder and racketeering. In 2005, John Paul II, history’s most well-traveled pope and the first non-Italian to hold the position since the 16th century, died at his home in the Vatican.
SURVEY SAYS: According to recent surveys, a significant number of workplaces participate in activities pertaining to the NCAA tournament. It’s now down to the final four teams. This week, I’d like to know, which of the final four would you like to see win the tournament? You may respond to this survey by 6 p.m. Pacific time today.Read more >
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Editorial: Alison Cooke Mintzer


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