Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 20th, 2015
Benefits & Administration
Peer Power: How Participants Can Help Each Other
Retirement plan providers have been testing behavioral science themes with retirement plan participants, and positive outcomes are clearly emerging from the effort. Steve Jenks, head of marketing at Empower Retirement, says Empower has found peers to be very powerful motivators for retirement plan participants.Read more >
Products, Deals & People
MillenniuM Investment and Retirement Advisors (MIRA), an independent, employee-owned investment advisory and TriCore, which offers human capital management, are partnering in plan service offerings. As well as flat-dollar administrative fees and an all-institutional fund lineup, the plan program offers a complete range of fiduciary services as defined by the Employee Retirement Income Security Act (ERISA), under the section that outlines the named independent fiduciary: full-scope 3(21); 3(38) and 3(16).Read more >
Economic Events
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in March, the same increase as in February, according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.2% in March, also the same increase as in February. Real average hourly earnings increased by 0.1 percent in March, seasonally adjusted. Average hourly earnings increased by 0.3 percent and the CPI-U increased by 0.2 percent. Real average weekly earnings decreased by 0.2 percent over the month. THE ECONOMIC WEEK AHEAD: Wednesday, the National Association of Realtors will report about existing home sales for March. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about new home sales for March. Friday, the Census Bureau will report about durable goods orders for March.
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Market Mirror

U.S. stocks closed broadly lower Friday following steep declines in Europe, as investors are worried that Greece may default on its debt and exit the euro currency union, according to the Associated Press. The Dow lost 279.47 points (1.54%) to finish at 17,826.30, the NASDAQ closed 75.98 points (1.52%) lower at 4,931.81, and the S&P 500 was down 23.90 points (1.14%) at 2,081.09. The Russell 2000 fell 21.03 points (1.65%) to 1,251.87, and the Wilshire 5000 decreased 264.12 points (1.18%) to 22,060.79.

On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, 2.8 billion shares traded, with declining issues outnumbering advancing issues 4 to 1 on both exchanges.

The price of the 10-year Treasury note increased 7/32, bringing its yield down to 1.867%. The price of the 30-year Treasury bond climbed 1 7/32, decreasing its yield to 2.517%.

WEEK’S WORTH: For the week ending April 17, the Dow and NASDAQ each fell 1.28%, the S&P 500 finished 1.00% lower, the Russell 2000 lost 1.02%, and the Wilshire 5000 was down 0.96%.

Compliance
Court Finds Fraud in Failure to Investigate Participant Concern
A federal court has found a retirement plan representative’s failure to investigate a participant’s concerns about his retirement benefit calculations amounted to “constructive fraud.” U.S. District Judge Sean F. Cox of the U.S. District Court for the Eastern District of Michigan rejected Detroit Edison’s argument that its retirement plan representative made an “honest mistake” when assuring John R. Paul Jr. and his wife that the calculations of his retirement benefits presented on four different statements were based on the correct number of years of credited service.Read more >
Too Soon to Assume the Worst About Fiduciary Rule
Some industry groups have contended the new fiduciary investment advice rule from the Department of Labor (DOL) will result in higher costs for plan sponsors and participants, as well as the loss of some services, but others say it is too early to tell. Michael Davis, director of institutional client relationships at Calvert Investments, and a former Deputy Assistant Secretary of the DOL’s Employee Benefit Security Administration, notes that the DOL itself lays out in the proposal situations that may be adjusted before a final rule is issued.Read more >
From the Magazine
IPS Provisions to Avoid and Strategies to Mitigate Risks
An investment policy statement (IPS) is not a legally required document under the Employee Retirement Income Security Act (ERISA). Nevertheless, many plan sponsors believe that the adoption of an IPS is a best practice in the employee benefits community. While there are certainly reasons to have an IPS in place, the document can be a double-edged sword.Read more >
Investing
Plan fiduciaries need a complete grasp of the vulnerabilities of their target-date strategies, and sources recommend tools and a documented process. The rapid adoption of target-date investment strategies by plan sponsors over the last few years took place in a risk-on, low volatility environment, says Josh Anderson, a financial adviser with Raymond James. “When the dust settles, it will be important for plan sponsors to have a documented process that supports their selection rationale,” he tells PLANSPONSOR.Read more >
Small Talk
ON THIS DATE: In 1832, Hot Springs National Park in Arkansas was established by an act of Congress. It was the first national park in the U.S. In 1836, the U.S. territory of Wisconsin was created by the U.S. Congress. In 1902, scientists Marie and Pierre Curie isolated the radioactive element radium. In 1912, Fenway Park opened as the home of the Boston Red Sox. In 1972, the manned lunar module from Apollo 16 landed on the moon. In 1999, two teenage gunmen killed 13 people in a shooting spree at Columbine High School in Littleton, Colorado. In 1999, Jane Seymour received a star on the Hollywood Walk of Fame. In 2008, 26-year-old Danica Patrick won the Indy Japan 300 at Twin Ring Montegi in Montegi, Japan, making her the first female winner in IndyCar racing history.
SURVEY SAYS: ACA’s Effect on Competitive Benefits
Last week, I asked NewsDash readers, has the Patient Protection and Affordable Care Act (ACA) affected the attractiveness of your health benefits to employees, and have you enhanced other benefit offerings as a result? Fifty-five percent of responding readers indicated their companies have changed health benefits due to the ACA, and 13% reported they are planning to change health benefits in 2015 due to the ACA. More than half (51.6%) of respondents do not think employees find their companies’ health benefits less attractive since the ACA was implemented, while 45.2% do. When asked which enhancements to other benefits, if any, their companies made specifically in response to the effect of the ACA on health benefits, the vast majority (86.7%) reported none. However, 6.7% indicated they increased employer contributions to their retirement plans, and the same percentage added new voluntary benefits, such as commuter benefits, pet insurance, child care subsidy, etc. A big thank you to all who participated in our survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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