Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 1st, 2015
Benefits & Administration
Retirement System Benefits All Income Levels
In a new book, Peter J. Brady, a senior economist in the retirement and investor research division at the Investment Company Institute, highlights the importance of tax considerations in projecting retirement wealth, especially when it comes to setting state and national policy. He argues workers across the income spectrum get a pretty even shake when it comes to retirement benefits.Read more >
Moody’s: PBGC Premiums Will Become Unaffordable
Following a recent announcement by the Pension Benefit Guarantee Corporation (PBGC) that its multiemployer pension insurance fund deficit had increased by $10 billion to $52 billion as of the fiscal year ended September 30, credit ratings agency Moody’s says this is credit negative for multiemployer plan sponsors because it shows the overall worsening trend in multiemployer pension performance. In its recent Credit Outlook report, the ratings agency notes that PBGC premiums have increased by nearly 340% over the previous eight years, and they reduce plan sponsors’ annual free cash flow by more than $270 million.Read more >
Is the UAW’s Demand for Return of Pensions a Realistic Ask?
Delay on Catch-Up Provision Allows Employers to Explore Optional SECURE 2.0 Features
Conduent Sells HSA Assets for $425M in Leaving FSA Business
Products, Deals and People
Mercer’s participant website, Mercer BenefitsCentral, now allows clients to “initiate, manage, and commence their pension plan benefit completely online.” The new capabilities are targeted at large market defined benefit (DB) plans, Mercer says, providing participants with an alternative approach to joining the pension plan and managing/understanding benefit payments.Read more >
Whitepaper Offers Guide for Distribution Success
A new whitepaper by Fred Reish, an Employee Retirement Income Security Act (ERISA) attorney with Drinker, Biddle & Reath, argues participant education and sponsors’ fiduciary knowledge are both critical to plan distribution success. The whitepaper, “Empowering Participants – Plan Distributions and the Plan Sponsor,” is being released this week in collaboration with Empower Retirement. In the publication, Reish guides plan sponsors through the key issues that participants face when comparing and choosing retirement distribution options, with a particular focus on regulatory activity related to educating participants about various options.Read more >
Mary Witherow joins Voya Financial as senior vice president for relationship management in the large corporate market. She will focus on providing Voya’s recordkeeping services to large employer-sponsored 401(k) defined contribution and benefit plans.Read more >
An Alternative When Financial Wellness Isn’t in the Budget
Financial Finesse founder and CEO Liz Davidson has written a new book, and her company is offering a service to help small employers use it as an employee financial wellness program tool. Believing the book lays a good foundation for financial wellness, Davidson decided to incorporate it into the services Financial Finesse offers employees. “We realize smaller employers are budget-constrained, so those who purchase the book for employees and contact us will receive consulting about how to leverage the chapters in the book into full financial wellness program material.”Read more >
Sponsored message from SEI
5 Questions Every Plan Sponsor Should Ask About Retirement Income
With a growing percentage of the workforce reporting insufficient retirement savings, DC plan sponsors are feeling the pressure to provide innovative solutions to better prepare participants for retirement.Read more >
Market Mirror

Early signs of softness in holiday spending sent retail stocks lower on the first day of trading after the Thanksgiving holiday, according to the Associated Press. The Dow lost 78.57 points (0.44%) to finish at 17,719.92, the NASDAQ decreased 18.86 points (0.37%) to 5,108.67, and the S&P 500 closed 9.25 points (0.44%) lower at 2,080.86. The Russell 2000 was down 4.28 points (0.36%) at 1,198.10, and the Wilshire 5000 fell 102.79 points (0.47%) to 21,658.55.

On the NYSE, 3.2 billion shares traded, with 1.3 declining issues for every advancing issue. On the NASDAQ, 2.7 billion shares changed hands, with a slight lead for decliners.

The price of the 10-year Treasury note was up 4/32, decreasing its yield to 2.210%. The price of the 30-year Treasury bond increased 15/32, bringing its yield down to 2.974%. 

Sponsors of defined benefit plans undergoing distress or involuntary termination with valuation dates falling in 2016 have a new table for determining expected retirement ages for participants. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.Read more >
From the Magazine
Array of Fixed-Income Investment Options Available
Few financial phenomena have endured like the bull market in U.S. bonds, which has run with virtually no major interruptions since 1981. With the Fed potentially on the verge of turning it all around, investors are focused on the near-term drop they might see in the bonds they own. Thinking further ahead, though, plan sponsors, their consultants and asset managers are looking at a possible new interest-rate regime and contemplating whether the core and core-plus fixed-income strategies, which worked so well for participants when rates were falling, will be sufficient when costs rise.Read more >
Small Talk
ON THIS DATE: In 1835, Hans Christian Andersen published his first book of fairy tales. In 1913, Ford Motor Co. began using a new movable assembly line that ushered in the era of mass production. In 1941, in the U.S., the Civil Air Patrol was created. In April 1943, the Civil Air Patrol was placed under the jurisdiction of the Army Air Forces. In 1955, Rosa Parks, a black seamstress in Montgomery, Alabama, refused to give up her bus seat to a white man and was arrested, marking a milestone in the civil rights movement in the U.S. In 1959, 12 countries, including the U.S. and the USSR, signed a treaty that set aside Antarctica as a scientific preserve, which would be free from military activity. In 1965, an airlift of refugees from Cuba to the United States began. In 1998, Exxon announced that it was buying Mobil for $73.7 billion, creating the largest company in the world to date.
TRIVIAL PURSUITS: In addition to adopting an 8-hour work day and paying employees more than double what his competitors were paying, Henry Ford offered profit sharing to certain employees. However, in addition to six months of service, employees were required to meet another, what could now be illegal, eligibility requirement.Read more >
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 >

Editorial: Alison Cooke Mintzer


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