Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 24th, 2015
Benefits & Administration
Senior Researcher Outlines an Evolving Industry
In his position as a chief research strategist with Russell Investments, Bob Collie sees a shifting retirement plan landscape—an industry facing critical challenges, but changing for the better. “There is a reason why we are seeing so many retirement system reform proposals coming down the pike from Washington and the states, and from so many other places and points of interest,” Collie tells PLANSPONSOR. “And the reason is that there is still some real weakness in the U.S. retirement system that is proving to be really challenging to overcome—especially when it comes to the basic question of access to a tax-qualified plan option.”Read more >
Products, Deals & People
Help for Participants Who Are Caregivers
With over 5 million Americans suffering from Alzheimer’s disease—a number that is anticipated to triple by mid-century—a plan sponsor is almost sure to have participants whose lives and finances are affected at one point or another. To address the challenges of financial planning under these tough circumstances, Transamerica, in partnership with Massachusetts Institute of Technology AgeLab, published a free book to help those who handle the finances of someone with dementia.Read more >
Economic Events
In the week ending April 18, the advance figure for seasonally adjusted initial claims for unemployment insurance was 295,000, an increase of 1,000 from the previous week’s unrevised level of 294,000, the Labor Department reported. The four-week moving average was 284,500, an increase of 1,750 from the previous week’s unrevised average of 282,750. Sales of new single-family houses in March were at a seasonally adjusted annual rate of 481,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.4% below the revised February rate of 543,000, but is 19.4% above the March 2014 estimate of 403,000. The average interest rate for a 30-year fixed-rate mortgage is 3.65%, down from 3.67% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 2.92%, down from 2.94%.
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Market Mirror

Thursday, the Dow was up 20.42 points (0.11%) at 18,058.69, the NASDAQ gained 20.89 points (0.41%) to finish at a record high of 5,056.06, and the S&P 500 increased 4.97 points (0.24%) to end at 2,112.93. The Russell 2000 climbed 6.05 points (0.48%) to 1,271.54, and the Wilshire 5000 closed 62.50 points (0.28%) higher at 22,396.19.

On the NYSE, 3.2 billion shares traded, with a 2 to 2 lead for advancers. On the NASDAQ, 2.8 billion shares changed hands, with 1.6 advancing issues for every declining issue.

The price of the 10-year Treasury noted climbed 7/32, decreasing its yield to 1.958%. The price of the 30-year Treasury bond increased 5/32, bringing its yield down to 2.654%.

Compliance
Retirement Plan Issues on the IRS’ Radar
The Internal Revenue Service (IRS) has seen leadership changes, a number of employees retiring and a restriction in hiring, but it continues to have a focus on examination and enforcement efforts with retirement plans. Mike Sanders, area manager for the Mid-Atlantic area, Employee Plans, IRS, warned attendees of the 44th Annual Retirement & Benefits Management Seminar, hosted by the Darla Moore School of Business at the University of South Carolina, and co-sponsored by PLANSPONSOR, about potential audit triggers. “Every line item on the Form 5500 is utilized,” Sanders summed up.Read more >
Demographics Prompting Focus on Retirement Income
One of the most important factors impacting those in the retirement industry is workforce demographics, said Fred Reish, chair of the financial services ERISA team at the law firm of Drinker, Biddle & Reath LLP. Speaking to attendees at the 44th Annual Retirement & Benefits Management Seminar, hosted by the Darla Moore School of Business at the University of South Carolina and co-sponsored by PLANSPONSOR, Reish noted there is a focus on retirement income within the Department of Labor’s (DOL) regulatory agenda. For example, the new fiduciary investment adviser proposed rule from the DOL—he says the rulemaking is less about 401(k)s or other retirement plans and more about the 65-year-old who retires today and lives to 85. What are they going to do when not protected by the Employee Retirement Income Security Act (ERISA) bubble? Are they going to have any money left at age 85?Read more >
Investing
Cost of Deferred Income Has Climbed
The CoRI indexes suggest long-term interest rates have started to level out from prolonged historic lows—a benefit to retirees hoping to address longevity risk via deferred annuities. BlackRock says the start of 2015 is again demonstrating how important it is for pre-retirees to keep in mind that retirement investment strategies are often sensitive to interest rate changes.Read more >
Small Talk

ON THIS DATE: In 1800, President John Adams approved legislation to appropriate $5,000 to purchase “such books as may be necessary for the use of Congress,” thus establishing the Library of Congress. In 1833, a patent was granted for first soda fountain. In 1889, the Edison General Electric Company was organized. In 1897, William Price became the first to be named White House news reporter. In 1945, President Harry Truman learned the full details of the Manhattan Project, in which scientists were attempting to create the first atomic bomb. In 1961, Sandy Koufax of the Los Angeles Dodgers struck out 18 batters becoming the first major-league pitcher to do so on two different occasions. In 1962, MIT sent a TV signal by satellite for the first time. In 1980, an ill-fated military operation to rescue the 52 American hostages held in Tehran ended with eight U.S. servicemen dead and no hostages rescued.

 

And now it’s time for FRIDAY FILES!

Creative ways to dunk your Oreo in milk.Read more >

In Crawley, West Sussex, England, a 57-year-old woman who has suffered agoraphobia for years has been working on overcoming the debilitating disease. She left her home for the third time in 10 years with a friend as part of her reha.bilitation. That’s when she saw a wooden pallet preventing her friend from reversing her car out of park, tried to move it and fell into a hole, according to The Daily Mail. She now has two black eyes and a suspected fractured leg. Sadly, she feels the experience set her back ‘years’ in her battle with the phobia.

In Franklin County, Kentucky, a man that escaped from a North Carolina prison more than 40 years ago, turned himself in. According to WBTV, the man, convicted of stealing, escaped from prison in 1971. According to the Franklin County Sheriff’s Office, the man has “a lot of medical problems” and can’t walk. He told deputies he hasn’t been able to get treatment because he doesn’t have a Social Security card or any viable identification, and he turned himself in to get medical help.

In Colorado Springs, Colorado, a man has been fined for discharging a fir.earm within city limits. According to the L.A. Times, he told police his computer was acting up, giving him the “blue screen of death,” so he took it in an alley and shot it eight times.

Somewhere in China, a man was stopped for exceeding the weight limit on his vehicle. He was carrying an entire minivan on the back of his bike.Read more >

In Slidell, Louisiana, firefighters responded to an unusual call. When they entered the home, they found a large duck stuck inside a chimney with its head showing out of the bottom. Firefighters had to dismantle part of the fireplace to reach the duck, the Associated Press reported. It took more than two hours to safely remove the bird. According to the news report, it’s unclear how the duck became lodged in the chimney.

In West Pittston, Pennsylvania, residents recently experienced an unusual “rain” storm. Torn wads of toilet paper and shredded pieces of plastic bags covered roofs, lawns and trees, according to UPI. One family called the Environmental Protection Agency, which directed them to the Federal Aviation Administration. According to news reports, the FAA confirmed that an investigation into the matter is underway.

In Boise, Idaho, firefighters responded to a house fire. When they approached the home, they heard cries of ‘Fire! Fire!’ and ‘Help! Fire!’ They rushed in to rescue who they thought were the residents of the house, but instead found parrots. According to UPI, crews reported there was no one in the house, only the birds. The birds were removed and given oxygen.

Have a wonderful weekend!
Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more >

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

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