| Benefit Briefs | A Vision for National Retirement Reform | The push for establishing mandatory access to
workplace retirement savings provides important insights into the path advocacy
groups must take to influence national retirement policy. State and federal
lawmakers first started kicking around the idea of requiring private employers
to offer some type of tax-advantaged retirement savings program nearly a decade
ago, but they have made little substantial progress. In recent years, the effort
has been channeled largely into so-called “auto-IRA bills” that seek to force
employers to offer workers, at a minimum, the chance to fund an individual
retirement account (IRA) with pre-tax payroll deductions. Proponents of
auto-IRA bills point to plan access as the most important factor in determining
whether the typical worker will be able to approach retirement confidently,
explains Brian Graff, executive director and CEO of the Association of Pension
Professionals and Actuaries (ASPPA). “It has really become a grassroots
legislative movement in recent years,” Graff tells PLANSPONSOR. | Many employers are beginning to scale back their
medical plan designs in an effort to avoid having to pay the Patient Protection
and Affordable Care Act’s (ACA’s) “Cadillac tax,” which takes effect in 2018,
according to a study released jointly by HighRoads and Corporate Executive
Board (CEB). The study report, “2014 Medical Plan Trends,” also says employees
are facing an increased share of upfront costs for health care, as well as an
increase in high-deductible plans, a greater number of plans with coinsurance
charges, higher out-of-pocket maximums, and increases in emergency room
copayments. | Increasing Benefits Limits Does Not Encourage New Plans | Data does not suggest a strong connection
between increases in contribution limits and the creation of new retirement
plans, according to a U.S. Government Accountability Office (GAO) study. The
report, “Private Pensions: Pension Tax Incentives Update,” says despite
increases in the statutory contribution limits, new retirement plan growth
remained fairly steady between 2009 and 2011. The observed decrease in the
number of small defined contribution (DC) plans offset all aggregate plan
growth, resulting in the total number of plans falling below levels from 2000,
though the number of participants did increase over the same period. Findings
also show that factors other than contribution limits, including the recession,
may have influenced the amount of new plan formation over the 2009 to 2011 time
frame. | The economy’s influence on the adjustments being
made to executive reward programs is decreasing this year. The results of
Mercer’s Executive Rewards 2013 Year-End Survey indicate the impact of proxy
advisory firms is slightly increasing as more organizations try to align
programs with advisers’ guidelines. According to the survey results, changes to
annual and long-term incentive programs, use of special retention grants, and
grant values have increased in 2014 as a result of proxy advisers’ guidelines. | Default Investment Options: TDFs Not the Only Choice | Like bodies in physics, participants in
retirement plans do not spontaneously change course in their saving and
investing efforts. It takes a push. That is especially true when it comes to
ensuring that participants properly diversify their portfolios, says Joel
Shapiro, senior vice president for ERISA Compliance at NFP 401K Advisors. | | Industry Voices | Industry Voice: De-Risking Corporate DB Plans | Assuming that a pension plan reaches a surplus
position, a variety of tools exist that can maintain that surplus into the
future, reducing the risk that the plan will go into deficit again. Every plan
sponsor should at least consider risk reduction measures as their plans approach
a fully funded position. | | Market Mirror | Yesterday, the Dow was up 40.71 points
(0.25%) at 16,449.25, the NASDAQ increased 26.03 points (0.64%) to 4,121.55,
and the S&P 500 closed 7.04 points (0.38%) higher at 1,871.89. The Russell
2000 gained 4.44 points (0.39%) to finish at 1,142.34, and the Wilshire 5000
closed at 19,908.56, up 76.40 points (0.39%).
On the NYSE, 3.2 billion shares traded,
with 1.6 advancing issues for every declining issue. On the NASDAQ, 2.7 billion
shares changed hands, with a 1.5 to 1 ratio of advancers to decliners.
The price of the 10-year Treasury note was up 2/32,
bringing its yield down to 2.715%. The price of the 30-year Treasury bond was
down 1/32, increasing its yield to 3.522%.
| | Rules & Regulators | Maintaining QDIA Protection Under 404(c) | A qualified default investment alternative
(QDIA) must meet five criteria to maintain sponsors’ Employee Retirement Income
Security Act (ERISA) Section 404(c) fiduciary protection, per the Department of
Labor. | | Small Talk | Nearly half of American workers feel stressed
about their finances, although worry seems to diminish among those seeking
professional advice. The Principal Financial Group’s latest Principal Financial
Well-Being Index shows widespread financial concern actually seems to be having
a positive impact on financial wellness and savings decisionmaking. For
instance, the research suggests more than half of employees (52%) have taken
action to monitor their spending levels in the past year, and nearly two in
five (39%) created a budget to keep finances in check, up significantly from
28% who created a budget two years ago. | ON
THIS DATE: In
1864, the U.S. Congress passed
legislation that allowed the inscription “In God We Trust” to be
included on one-cent and two-cent coins. In 1876, the first official National League (NL) baseball game took
place. Boston beat Philadelphia 6-5. In 1889,
at noon, the Oklahoma land rush officially started as thousands of Americans
raced for new, unclaimed land. In 1970,
Earth Day, an event to increase public awareness of the world’s environmental
problems, was celebrated in the United States for the first time. In 1976, Johnnie Taylor’s “Disco
Lady” became the first single to sell more than two million copies. In 1976, Barbara Walters became first
female nightly network news anchor. In 1978,
the Blues Brothers—the musical creation of Saturday
Night Live cast members Dan Aykroyd and John Belushi—made their
world premiere on the show. In 1993,
the U.S. Holocaust Memorial Museum was dedicated in Washington, DC. In 1994, former President Richard M. Nixon
died after suffering a stroke four days earlier.
TUESDAY
TRIVIA: Former Senator Gaylord Nelson, concerned that
the state of the environment was a “non-issue in the politics of the country,”
got his idea for the first Earth Day from the anti-Vietnam War demonstrations,
convinced “if we could tap into the environmental concerns of the general
public and infuse the student anti-war energy into the environmental cause, we
could generate a demonstration that would force this issue onto the political
agenda.”
| TRIVIAL PURSUITS: What
is the origin of the “peace” symbol? | Share the good news with a friend! Pass the Dash along – and tell your
friends/associates they can sign up for their own copy. | News from PLANSPONSOR.com
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