Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 9th, 2014
Call for Plan Sponsors
Would you be willing to share your experiences with peers? Now in its ninth year, the PLANSPONSOR National Conference remains a unique collaboration of plan sponsors, retirement plan advisers and providers who are focused on understanding and applying the most innovative plan design solutions available. If you are a plan sponsor and would like to share your experiences during one of our panel discussions, email Alison Cooke Mintzer at acooke@assetinternational.com.
Second Opinions
SECOND OPINIONS: HIPAA Standard Transaction Rules
With all of the other mandates, notices, and penalties included in the Patient Protection and Affordable Care Act (ACA), one section went largely unnoticed but potentially has a big impact on health plans. The ACA added new requirements to the HIPAA Administrative Simplification Rules, which are the rules that govern privacy and security of protected health information. Two of the changes impose direct requirements on health plans beginning this year—the Health Plan Identifier Rule and the HIPAA Certification Rule. Experts from Groom Law Group answer questions about both requirements.
Benefit Briefs
Reducing Volatility in DC Plan Lineups
It sounds like the ever-elusive free lunch—an investment strategy that reduces the potential for major losses while still pursuing the market’s strongest opportunities for growth. But that’s exactly what an increasing number of investors are demanding in the wake of the 2008 financial crisis, says Bradford Campbell, counsel with Drinker Biddle & Reath LLP and former head of the Department of Labor’s Employee Benefits Security Administration (EBSA). It’s an especially pressing demand in the retirement planning context, Campbell tells PLANSPONSOR, where investors feel the long-term outlook that dominates decisionmaking about defined contribution (DC) plan investment menus doesn’t sufficiently address shorter-term volatility concerns.
Buyer's Market
Online Tool Compares 401(k) Plan Fees
America’s Best 401k, a provider of 401(k) plan solutions for medium and small-sized businesses, has released an online tool that checks plan fees. By entering in a company name, the fee checker will pull plan information from the Department of Labor’s Form 5500 database and compare its investment-related costs to industry averages.
Insurance provider Allianz Life has joined others in the retirement industry to support National Retirement Planning Week. To help people better understand how financial “hits” triggered by health care costs, inflation and taxes can potentially affect their retirement income, Allianz Life launched “Retirement Income Risks,” a three-minute animated video.
New OneAmerica Platform Improves Plan Management
OneAmerica has launched its OneSolution platform, a collection of tools and services for employers to better manage their retirement plans and increase plan participation. “This collection of services not only makes it easier and more cost effective for employers to manage their retirement plans but also encourages participation by employees and helps them become retirement ready,” says Bill Yoerger, president, retirement services for the companies of OneAmerica.
During National Retirement Planning Week, AXA is emphasizing the need to teach teachers about the importance of their own retirement planning and financial education. Informational “teach-ins” on retirement planning for school employees are being hosted by AXA Advisors Financial Professionals this month at various locations. For online learning, AXA has compiled a suite of retirement planning resources.
Product Helps ESOPs Match Liabilities
Archford Capital Strategies launched an FDIC-insured, bank-issued, principal-protected investment to help employee stock ownership plans (ESOPs) match future repurchase obligations. Archford says it identified a gap in traditional risk adverse investments that could be used to match future repurchase obligations (as well as health care, education or pension expenses). Working with large banking institutions to customize an existing investment product, it developed the Market Participation CD (certificate of deposit). The CD is designed to reduce risk by protecting the investment principal with FDIC coverage and participates in potential equity market index gains when held to maturity.
Lincoln Financial Group has launched its Presidential Managed Risk Moderate Fund. The fund is an asset allocation/balanced fund constructed from diversified exchange-traded funds (ETFs), including Vanguard, State Street and iShares. A risk management overlay seeks to protect investors during volatile markets and reduce the impact on their account values.
Vanguard to Exit DB Administration Business
Investment management firm Vanguard announced it will cease offering administration services for defined benefit (DB) retirement plans. The firm will continue to provide DB plan sponsors with its low-cost investments, trustee and payment services, and investment advisory services. The change will enable the firm to further expand its services for 401(k), 403(b), and other defined contribution (DC) retirement plans.
MassMutual’s retirement services division launched an enhanced participant website designed to make it easier for employees to prepare for retirement. The new RetireSmart site boasts more intuitive navigation and a new design that offers all educational content and planning tools in a streamlined, interactive format accessible both pre- and post-login. The site’s homepage organizes educational and account-level content into four sections.
Industry Voices
Industry Voice: Home Country Bias an Epidemic for Plan Participants
Home country bias is an epidemic for participants looking to build their nest eggs. In daily life, people are more likely to visit restaurants and stores close to home because they are familiar with the local area. But in doing so, they deprive themselves of all the great places in other neighborhoods. Similarly, in retirement portfolios, plan participants often over-allocate investments to companies domiciled in their own country, thereby potentially missing out on significant growth opportunities abroad, slowing their progress toward retirement readiness.
Market Mirror
Tuesday, the Dow was up 10.27 points (0.06%) at 16,256.14, the NASDAQ climbed 33.23 points (0.81%) to 4,112.99, and the S&P 500 increase 6.92 points (0.38%) to 1,851.96. The Russell 2000 closed 8.46 points (0.74%) higher at 1,144.24, and the Wilshire 5000 closed at 19,733.34, up 96.07 points (0.49%). On the NYSE, 3.2 billion shares changed hands, with advancing issues outnumbering declining issues more than 2 to 1. On the NASDAQ, 2.7 billion shares traded, with a near 2 to 1 lead for advancers. The price of the 10-year Treasury note increased 6/32, decreasing its yield to 2.683%. The price of the 30-year Treasury bond was up 13/32, bringing its yield down to 3.541%.
Rules & Regulators
This summer, the Department of Labor (DOL) will be holding free seminars about fiduciary responsibilities in Hartford, Connecticut, and Oklahoma City, Oklahoma. The DOL’s “Getting It Right: Know Your Fiduciary Responsibilities” seminars are designed to increase awareness and understanding about basic fiduciary responsibilities when operating a retirement plan.
The World at Large
The UK’s Financial Conduct Authority is conducting a “thematic review” of advisers’ implementation of new charging rules following the 2012 Retail Distribution Review. The latest report from the investigation reveals a “high proportion” are failing to correctly disclose to clients the cost of their advice and the independence from certain providers of service they offer.
Small Talk
Small Talk: Disciplined Planning Leads to Happier Retirement
The more discipline a person brings to financial planning, the more financially secure they feel in the present, which leads to a greater likelihood they will be happy in the future, says a recent study. The “2014 Planning and Progress Study,” an annual research project commissioned by Northwestern Mutual, finds 70% of highly disciplined planners feel very financially secure, compared with 51% of disciplined planners, 34% of informal planners and 17% of nonplanners. The study also shows highly disciplined planners who are retired are much more likely than nonplanners to say they are happy in retirement (91% vs. 63%).
ON THIS DATE:  In 1865, at Appomattox, Virginia, Confederate General Robert E. Lee surrendered his 28,000 troops to Union General Ulysses S. Grant, effectively ending the American Civil War. In 1959, the National Aeronautics and Space Administration (NASA) introduced America’s first astronauts to the press: Scott Carpenter, L. Gordon Cooper Jr., John H. Glenn Jr., Virgil “Gus” Grissom, Walter Schirra Jr., Alan Shepard Jr., and Donald Slayton. The seven men, all military test pilots, were carefully selected from a group of 32 candidates to take part in Project Mercury, America’s first manned space program.   WEDNESDAY WISDOM: “Fortune favors the prepared mind.”—Louis Pasteur, French chemist and microbiologist      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   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
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PLANSPONSOR interviews Scott Francolini, from New York Life Retirement Services
National Practice Leader Scott Francolini shares how New York Life Retirement Plan Services is thinking differently about retirement plan strategy and success, and how the company is combatting today’s industry challenges.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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