Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 28th, 2015
Benefits & Administration
Health Care Reform Is Transforming Employer Benefits
As provisions of the Patient Protection and Affordable Care Act (ACA) have rolled out over the past couple of years, many companies are making substantial changes to their health benefit offerings, according to Paul Goldbeck, senior consultant at Towers Watson. Goldbeck told 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, that the individual mandate and provision for adult children has resulted in additional employees signing up for employer plans, and new taxes and fees have also increased costs for employers. In addition, the ACA added administrative complexity with new eligibility and reporting requirements as well as rules to coordinate out of pocket maximums among pharmacy benefit and health plans. “All of this leads employers to consider whether they want to take a different approach to health benefits,” Goldbeck said.Read more >
Many Plan Sponsors Unaware of Fiduciary Responsibilities
In the past three years, there has been a decline in retirement plan sponsors’ awareness of their fiduciary responsibilities, according to research from Alliance Bernstein. More than one-third (37%) of sponsors aren’t aware that they are fiduciaries, up from 30% in 2011.Read more >
Providers Can Help Improve Retirement Plans
Speakers 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 discussed capabilities retirement plan providers offer for plan design and participant outcome issues. W. Robert Phillips, senior vice president, Consultant Relations, BNY Mellon Investment Management, said providers are helping plan sponsors with trends such as indexation, moving to custom target-date funds (TDFs), and white-labeling investments. He noted that a lot of fee compression activity is concentrated on how to get a cheaper investment menu. One way is through using indexed funds; another way is to use different share classes. But, Phillips warned, plan sponsors should be careful of what the consequences are; choosing investments just to lower fees may not be in the best interest of participants.Read more >
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The NQDC Market
Products, Deals & People
Financial software and platform provider Sapiens International Corporation announced the expansion of its defined contribution recordkeeping platform, which was first introduced to the market in 2014. The eligibility component of the Sapiens Retirement platform supports a variety of complex eligibility rules that can be organized by plan providers, are executed automatically and include techniques for processing exceptions.Read more >
Strategic Insight Launches Liquid Alternatives Reporting
Investment fund research and analytics firm Strategic Insight (SI), an Asset International Company, is adding a new liquid alternatives research practice area, reflecting the growing importance of the asset class for institutional investors. Within this practice area, SI will publish a quarterly overview of the liquid alternative investment marketplace, along with periodic topical studies (known as “Alternative Insights”) and webcasts devoted to this growing area of the investment fund market.Read more >
Market Mirror

Yesterday, the Dow was down 42.17 points (0.23%) at 18,037.97, the NASDAQ lost 31.84 points (0.63%) to finish at 5,060.25, and the S&P 500 decreased 8.77 points (0.41%) to 2,108.92. The Russell 2000 fell 14.83 points (1.17%) to 1,252.70, and the Wilshire 5000 closed 115.18 points (0.51%) lower at 22,316.00.

On the NYSE, 3.2 billion shares traded, with 1.8 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares changed hands, with a 2.4 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note decreased 5/32, bringing its yield up to 1.927%. The price of the 30-year Treasury bond slipped 1/32, increasing its yield to 2.614%.

Investing
March totals for net new investments in stock and bond funds dipped to $49.4 billion, down from the previous month’s $56.7 billion, according to data from Strategic Insight, an Asset International Company. Net intake to equity products rose to $40 billion from February’s $32.2 billion, driven by a $38.3 billion inflow to international equity.Read more >
Automated Investments Provide Assurance to Participants
Providing a cost-efficient, customized approach, automated investment solutions act as a powerful mechanism for sponsors, says Jeremy Hersch, vice president, head of asset allocation services, Transamerica Retirement Advisors Inc. While retirement investing decisions can be complex for individuals, automated solutions make it easier to implement a diversified combination of the plan’s investments. These investments are automatically rebalanced, reducing the amount of time and effort on behalf of the participant. Additionally, Hersch says this can help overcome the inertia that tends to prevent people from doing things like rebalancing and reducing risk over time. Transamerica conducted a study that found the median return for participants in automated investing solutions was higher over time that for participants who were do-it-yourself investors.Read more >
Small Talk

ON THIS DATE: In 1758, future U.S. Senator and President James Monroe was born. In 1897, the Chickasaw and Choctaw, two of the Five Civilized Tribes, became the first to agree to abolish tribal government and communal ownership of land. In 1932, the yellow fever vaccine for humans was announced. In 1967, boxing champion Muhammad Ali refusesd to be inducted into the U.S. Army and was immediately stripped of his heavyweight title. Ali, a Muslim, cited religious reasons for his decision to forgo military service. In 1992, the U.S. Agriculture Department unveiled a pyramid-shaped recommended-diet chart. In 2000, Jay Leno received a star on the Hollywood Walk of Fame.

 

TUESDAY TRIVIA: Dogs will yawn to tell their owners the activity the owner is engaged in is not what the dog wants to do.

TRIVIAL PURSUITS: From where did the term ‘slush fund’ originate?Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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