Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 6th, 2015
Benefits & Administration
A Plan Sponsor Addresses High Earners’ Savings Needs
While it worked to boost savings in its 401(k) plan, one plan sponsor did not forget about highly compensated employees’ desire to save for retirement.Read more >
Rhode Island Governor Gina Raimondo says her state has reached a tentative settlement with six of the nine public employee unions that sued over the state’s recent pension system overhaul. The tentative settlement would impact up to 59,000 current and past Rhode Island workers, according to Raimondo, and would “keep the pension system on a healthy path.” She notes: “Unlike the situation in 2014 where all groups were required to sign on to the settlement, such a condition does not exist in the current scenario.”Read more >
Most Americans Unaware of Retirement Plan Deferral Limits
According to a recent survey from Fifth Third Bank, fully 90% of Americans do not know the amount of money they can defer to their 401(k) or other defined contribution plan accounts annually without triggering tax repercussions. Despite the fact that the IRS tends to increase these limits by a small margin annually, Fifth Third Bank researchers find very few retirement savers in the U.S. are either aware of the limit or actually set their deferrals to match it.Read more >
The average pension funding status ratio for the first quarter of 2015 fell from 83.1% to 81.7%, reports Legal & General Investment Management America Inc. (LGIMA). Funded status levels for the average plan with a traditional allocation fell about 1.3% this quarter, estimates Don Andrews, LGIMA’s head of liability-driven investing (LDI) strategy. The drop occurred as liabilities for average plans outpaced assets.Read more >
Economic Events
Total nonfarm payroll employment increased by 126,000 in March, and the unemployment rate was unchanged at 5.5%, according to the Bureau of Labor Statistics. Employment continued to trend up in professional and business services, health care, and retail trade, while mining lost jobs. THE ECONOMIC WEEK AHEAD: Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about wholesale inventories for February. 
EARN Act Clears Senate Finance Committee
Plaintiffs Rebuffed by Appeals Court in Active Management Lawsuit
Data and Research
K-12 Educators Prefer Advisers for Retirement Planning
Market Mirror

Friday, the Dow rose 65.06 points (0.37%) to 17,763.24, the NASDAQ was up 6.71 points (0.14%) at 4,886.94, and the S&P 500 closed 7.27 points (0.35%) higher at 2,066.96. The Russell 2000 increased 3.95 points (0.32%) to 1,255.66, and the Wilshire 5000 gained 77.56 points (0.35%) to finish at 21,946.62.

On the NYSE, 3.2 billion shares traded, with a 1.8 to 1 ratio of advancers to decliners. On the NASDAQ, 2.8 billion shares changed hands, with 1.5 advancing issues for every declining issue.

The price of the 10-year Treasury note was up 20/32, decreasing its yield to 1.843%. The price of the 30-year Treasury bond increased 31/32, bringing its yield down to 2.489%.

WEEK’S WORTH: For the week ending April 3, the Dow closed 0.29% higher, the NASDAQ slipped 0.09%, and the S&P 500 was up 0.27%. The Russell 2000 climbed 1.23%, and the Wilshire 5000 gained 0.46%.

IRS Expands Auto Feature Voluntary Correction Safe Harbor
The Internal Revenue Service (IRS) says a new revenue procedure, 2015-28, “modifies but does not supersede” an earlier revenue procedure, 2013-12, which in part defines methods for plan sponsors to voluntarily correct issues with plan “auto features” so as to avoid jeopardizing their plans’ tax-advantaged status. In short, the 2015-28 revenue procedure modifies the safe harbor correction methods and examples in Appendices A and B of the 2013-12 revenue procedure to provide additional leeway and alternative correction methods for employee elective deferral failures.Read more >
From the Magazine
Insights: Pension (Mis)perceptions
I recently saw a press release discussing a poll about Americans’ opinions of public pensions. The headline claimed “72% of Americans are concerned about public pension costs.” After reading the results and finding the content did not seem relevant to our audience, I put it aside. Later, however, the survey positioning nagged at me. After revisiting the poll’s questions and responses, I debated whether they were presented in a way that suggested government employees get a better benefit than private-sector workers do. Also, the survey did not clarify whether the respondents knew anything about how much government workers pay into their pensions or the degree to which those plans are funded by tax money.Read more >
Small Talk
ON THIS DATE: In 1841, John Tyler was sworn in as president. Tyler was elected as William Harrison’s vice president earlier in 1841 and was suddenly thrust into the role of president when Harrison died one month into office. In 1896, the Olympic Games, a long-lost tradition of ancient Greece, were reborn in Athens 1,500 years after being banned by Roman Emperor Theodosius I. At the opening of the Athens Games, King Georgios I of Greece and a crowd of 60,000 spectators welcomed athletes from 13 nations to the international competition. In 1917, two days after the U.S. Senate voted 82 to 6 to declare war against Germany, the U.S. House of Representatives endorsed the declaration by a vote of 373 to 50, and America formally entered World War I. In 1965, U.S. President Lyndon B. Johnson authorized the use of ground troops in combat operations in Vietnam. In 1985, William J. Schroeder became the first artificial heart recipient to be discharged from the hospital. In 1987, Sugar Ray Leonard took the middleweight title from Marvin Hagler.
Last week, I asked NewsDash readers, “Which of the final four would you like to see win the tournament?” Three in ten (30.8%) of responding readers would like to see the University of Wisconsin win the tournament, while 18.5% wanted the championship to go to Michigan State University. Nine percent of readers are pulling for Duke University, and 10.8% were hoping the University of Kentucky would win. Six percent of readers said they hope anyone but Duke wins the tournament, and 9.2% of readers already have their wish that anyone but Kentucky will win. Slightly more than 15% of respondents chose “none/don’t care.” Early on, I realized, due to a couple of reader comments, that my choice of “anyone but Michigan” was not correct, as Michigan is not the same Michigan State, so about two hours into the survey, I changed that choice. Among the verbatim responses, there was excitement about March Madness and feelings that it boosted morale in the workplace, though a few respondents don’t care much for basketball. Regarding my reference to “March Madness” in the survey, Editor’s Choice goes to the reader who said: “Isn’t it April?” Thanks to everyone who participated in our survey!Read more >
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Copyright © Asset International, Inc., 2015.

All rights reserved.  No reproduction without prior authorization.

Editorial: Alison Cooke Mintzer


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