Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 29th, 2014
Benefit Briefs
Financial Wellness Not Just a Benefit for Employees
Helping employees attain financial wellness is not just another part of the benefits program—it can be healthy for a company’s bottom line. The point of financial wellness is it helps reduce financial stress, Matt Iverson, founder of Boulevard R, a retirement plan services provider, said in a recent webinar. Employees who are stressed financially tend to have higher health care expenses—about $300 per employee per year stemming from anxiety, insomnia, headaches and depression, Iverson says. In addition, when employees cannot afford to retire, there is a real cost to the firm, Iverson says.
Companies and workers are increasingly receptive to 401(k) Roth features as a retirement savings vehicle. In addition, more U.S. employers are adding Roth 401(k) features than ever before and participation is also on the rise. Aon Hewitt’s research finds half of all companies now offer a Roth account, nearly five times the percentage that did so in 2007 (11%). Aon Hewitt also found in 2013, 11% of workers saved to a Roth account when it was available in the plan, which is up from 8% in 2011.
Buyer's Market
BlackRock Adds Income Projection to Investment Offering
BlackRock, Inc. has expanded its proprietary CoRI retirement suite with new income projection and portfolio allocation analysis tools. This expansion enhances the CoRI online portal with a new feature that helps pre-retirees identify savings and investment strategies that can help them plan for income goals in retirement. The firm says the new functionality should allow the CoRI suite to help investors understand and take action to address the critical relationship between accumulated savings and lifetime income in retirement.
TSA Consulting Group, Inc., a provider of 403(b) and 457(b) retirement plan administration services, has acquired Security Financial Resources, Inc.’s 403(b) Plan Solutions Program. Under the terms of an all-cash purchase agreement, TSA Consulting Group acquired the 403(b) Plan Solutions Program effective April 10. The deal adds more than 2,000 public school districts and colleges in 47 states to TSA’s Compliance Edge program.
Benz Offers Insights About Effective Benefit Communications
Benz Communications will present a series of free webinars for plan sponsors about the topic of making employee benefits communications more effective. The webinars are intended to give plan sponsors a roadmap for investing in their employee benefits communication, according to Jennifer Benz, CEO of the San Francisco-based firm.
Industry Voices
Industry Voice: Major Risks Facing DB Plans Today
The current, relatively well-funded status of defined benefit (DB) plans presents an opportunity to lower the risk level. It’s important to recognize that the risks involved cover a full spectrum that extends well beyond the problems that result from underfunding. This article explains the six major types of risk that plan sponsors face.
Market Mirror
Yesterday, the Dow finished 87.28 points (0.53%) higher at 16,448.74, the NASDAQ slipped 1.16 points (0.03%) to 4,074.40, and the S&P 500 increased 6.03 points (0.32%) to 1,869.43. The Russell 2000 fell 5.97 points (0.53%) to 1,117.06, and the Wilshire 5000 was up 21.45 points (0.11%) at 19,784.70. On the NYSE, 3.2 billion shares traded, with a slight lead for advancers. On the NASDAQ, 2.7 billion shares changed hands, with 1.7 declining issues for every advancing issue. The price of the 10-year Treasury note was down 11/32, bringing its yield up to 2.706%. The price of the 30-year Treasury bond decreased 30/32, increasing its yield to 3.495%.
Financial Sense
There is a positive link between active investment management and high endowment returns in equity asset classes. The paper, “Does Active Management Benefit Endowment Returns? An Analysis of the NACUBO-Commonfund Study of Endowments (NCSE) Data,” examines the active management versus passive management debate and concludes that endowments with more active asset management see higher returns net of fees from U.S. equity allocations. The analysis also finds that endowments with a designated chief investment officer or outsourced chief investment officer (OCIO) are better able to earn incremental positive returns from active management than those without.
Smart Beta Addresses Many Investing Goals
Investors in North America and Europe are making use of smart beta indexes in diverse ways, according to a survey from global asset manager Russell Investments. Smart Beta: A Deeper Look at Asset Owner Perceptions finds among those investors managing more than $10 billion (35% of those surveyed), smart beta indexes are being sought more for their investment utility—helping to achieve broader portfolio objectives such as risk reduction and return enhancement—rather than for basic cost savings. And across North America and Europe, asset owners’ use of smart beta indexes and smart beta index-based investment strategies is diverse, from use as market benchmarks to tools to control unwanted exposures or to emphasize certain investment factors in global multi-asset portfolios.
Small Talk
ON THIS DATE:  In 1854, by an act of the Pennsylvania legislature, Ashmun Institute, the first college founded solely for African-American students, was officially chartered. In 1945, the U.S. Seventh Army’s 45th Infantry Division liberated Dachau, the first concentration camp established by Germany’s Nazi regime. In 1968, Hair premiered on Broadway. In 1992, the Rodney King trial verdict was announced, sparking three days of rioting in Los Angeles. In 2004, the National World War II Memorial opened in Washington, D.C. In 2011, Great Britain’s Prince William married his girlfriend Catherine Elizabeth “Kate” Middleton at Westminster Abbey in London.   TUESDAY TRIVIA: Dr. Seuss’ full name is Theodor Seuss (pronounced like voice, but with a ‘z’—‘zoice’) Geisel.
TRIVIAL PURSUITS: What did Dr. Seuss do before writing children’s books?
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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