Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 26th, 2015
Benefits & Administration
Investment Options in HSAs Improve Savings Potential
At the end of 2014, account balances in health savings accounts (HSAs) with investment options averaged $10,261, or about six times the average $1,709 balance in HSAs without investment options, according to the Employee Benefit Research Institute (EBRI). “HSAs often have an investment account option that allows account owners to invest in not just a money market account, but in mutual funds and other investment vehicles much like they would in a 401(k) plan,” explains Paul Fronstein, director of EBRI’s Health Research and Education Program and author of the report. “Some HSA owners may use the investment account option as a means to increase savings for retirement, while others may be using it for shorter-term investing.”Read more >
Newell Rubbermaid Inc. intends to offer approximately 3,300 former employees who have deferred vested benefits under the company’s defined benefit (DB) pension plan a one-time election to receive a lump-sum distribution of the present value of their benefits by the end of 2015. The effect of this offering on the company’s benefit obligations is revealed in an 8-K filing with the Securities and Exchange Commission (SEC).Read more >
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Ask the Experts
What Is the Difference Between QPSAs and QJSAs?
“What is the difference between a Qualified Preretirement Survivor Annuity (QPSA) and a Qualified Joint and Survivor Annuity (QJSA)?”Read more >
Economic Events

Sales of new single-family houses in July were at a seasonally adjusted annual rate of 507,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.4% above the revised June rate of 481,000, and is 25.8% above the July 2014 estimate of 403,000.

 

The Conference Board Consumer Confidence Index, which had declined in July, rebounded in August. The Index now stands at 101.5 (1985=100), up from 91.0 in July. The Present Situation Index increased from 104.0 last month to 115.1 in August, while the Expectations Index improved to 92.5 from 82.3 in July.

Market Mirror

Tuesday, U.S. stock market indices gave up gains earlier in the day to close lower. The Dow fell 204.91 points (1.29%) to 15,666.44, the NASDAQ decreased 19.76 points (0.44%) to 4,506.49, and the S&P 500 closed 21.26 points (1.12%) lower at 1,871.95. The Russell 2000 was down 7.63 points (0.69%) at 1,104.07, and the Wilshire 5000 lost 234.48 points (1.17%) to finish at 19,722.01.

 

On the NYSE, 3.2 billion shares changed hands, with 1.2 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a slight lead for decliners.

 

The price of the 10-year Treasury note decreased 24/32, bringing its yield up to 2.090%. The price of the 30-year Treasury bond fell 1 27/32, increasing its yield to 2.817%.

Compliance
Several teachers have filed a lawsuit on behalf of current and former members of the Kentucky Teachers’ Retirement System (KTRS) alleging that KTRS trustees, staff and advisers created a “corrupted system.” Among other things, the lawsuit argues against increasing employee contributions, lack of transparency of the system and investing in alternative investments.Read more >
Certain Identity Theft Benefits Not Considered Taxable
The Internal Revenue Service (IRS) has made an announcement about the taxability of identity protection services received by certain employees.Read more >
From the Magazine
Avoiding a Form 5500 Filing Failure
Do not wait for an audit from the Internal Revenue Service (IRS) to solve your plan’s operational problems. Sponsors should regularly conduct self-reviews of their plan’s operations to fix—and, even better, prevent—problems, sources say. What can plan sponsors do to prevent a Form 5500 filing failure?Read more >
Small Talk
Does the office sometimes remind you of high school, or even elementary school? Surveys by CareerBuilder suggest adolescent behaviors in the workplace are common. More than three-quarters (77%) of employees surveyed said they have witnessed some type of childish behavior among colleagues. The survey revealed some specific immature actions witnessed by employees, as well as behaviors that would keep employers from promoting employees.Read more >
ON THIS DATE: In 1873, the school board of St. Louis, Missouri, authorized the first U.S. public kindergarten. In 1920, the 19th Amendment, guaranteeing women the right to vote, was formally adopted into the U.S. Constitution by proclamation of Secretary of State Bainbridge Colby. In 1939, the first televised Major League Baseball game was broadcast. The game was between the Cincinnati Reds and the Brooklyn Dodgers at Ebbets Field in Brooklyn, New York. In 1968, as the Democratic National Convention got underway in Chicago, thousands of anti-war demonstrators took to Chicago’s streets to protest the Vietnam War and its support by the top Democratic presidential candidate, Vice President Hubert Humphrey. In 1973, a U.S. Presidential Proclamation was declared that made August 26th Women’s Equality Day. In 1974, Charles Lindbergh, the first man to accomplish a solo nonstop flight across the Atlantic Ocean, died in Maui, Hawaii, at the age of 72. In 1978, the “Grease” movie soundtrack earned its second chart-topping hit when its third single—Frankie Valli’s “Grease”—reached the No. 1 spot on the Billboard Hot 100.
SURVEY SAYS: Plan Amendments
Last week, I asked NewsDash readers, “When was the last time your firm or retirement plan sponsoring entity executed a plan amendment that was not dictated by new legislation or regulations, and for what reason(s) was the amendment made?” More than half (55.3%) have executed a plan amendment that was not dictated by new legislation or regulations in the past one to two years, while nearly three in ten (29%) are currently doing so. The addition of or changes to automatic plan features dominated the reasons for plan amendments. Verbatim comments included a warning about making a plan amendment “fail.” Editor’s Choice goes to the reader who said: “So happy that we are doing a clean-up of our very large and complicated pension plan document. Clean-up of the document is daunting, but the person who has my job in 20 years will thank me!” A big thank you to all who responded to the survey!Read more >
WEDNESDAY WISDOM: “Either you run the day or the day runs you.” —Jim Rohn, entrepreneur, author and motivational speaker
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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