Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 12th, 2014
Administration & Benefits
Financial and Emotional Planning Key to Happy Retirement
Preparing for retirement is less akin to running a race and more of a long-term commitment, Elaine Sarsynski, executive vice president of MassMutual Retirement Services, tells PLANSPONSOR. A MassMutual study finds a strong correlation between happiness and planning. The retirees who express the highest levels of contentment are the ones who took concrete steps to order both their emotional and their financial lives at least five years before retirement. Sarsynski stresses that even retirement plan participants who are not currently on track to achieve what they might think is a necessary accumulation can still take action.Read more >
Sponsored message from Vanguard
The Washington Connection: Key issues in the run-up to mid-terms
In the newest “Washington Connection” installment, Ann Combs, head of Vanguard Government Relations, offers insight on the latest legislative and regulatory issues from our nation’s capital.Read more >
Ask the Experts
Ask the Experts – Processing 403(b) Loan Defaults
“I have some questions about how 403(b) loan defaults are processed. I realize that, once a participant defaults on a loan, it’s a deemed distribution and a 1099R is issued. But what should happen to the participant’s account? Is it reduced by said distribution? And what happens to the outstanding loan? Is interest still accumulating on the deemed distribution? How is such interest reported going forward?”Read more >
Products, Deals & People
Insurance brokerage firm and employee benefits solutions provider Lockton hired David Dennis to join its employee benefits operation in Chicago. As unit manager and senior vice president, Dennis is responsible for providing guidance and developing comprehensive benefit programs to address the risks that employers face. He will focus on client retention and manage a team of Lockton professionals as they assist employers with marketing, funding issues, retirement plan design, and analyses of employee health and welfare benefit programs.Read more >
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Industry Voices
Industry Voices: What’s Your Number?
Where have years of urging people to save early for retirement and focus on the evolution of investment line-ups and portfolios gotten us? The savings behavior of many Americans has improved greatly, but as participants grow older and realize that the majority of their earnings and savings potential is behind them, they begin to contemplate whether their lifetime of savings can replace their paycheck in retirement.Read more >
Economic Events

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for October, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,350.9 billion, down 0.1% from September, but up 3.4% from October 2013.

Advance estimates of U.S. retail and food services sales for November, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $449.3 billion, an increase of 0.7% from the previous month, and 5.1% above November 2013. Total sales for the September through November period were up 4.7% from the same period a year ago. Retail trade sales were up 0.7% from October and 4.9% above last year. Auto and other motor vehicle dealers were up 9.5% from November 2013 and nonstore retailers were up 8.7% from last year.

In the week ending December 6, the advance figure for seasonally adjusted initial claims for unemployment insurance was 294,000, a decrease of 3,000 from the previous week’s unrevised level of 297,000, the Labor Department reported. The four-week moving average was 299,250, an increase of 250 from the previous week’s unrevised average of 299,000.

The average interest rate for a 30-year fixed-rate mortgage is 3.93%, up from 3.89% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.20%, up from 3.10%.

Market Mirror

Thursday, the Dow was up 63.19 points (0.36%) at 17,596.34, the NASDAQ closed 24.14 points (0.52%) higher at 4,708.16, and the S&P 500 increased 9.19 points (0.45%) to 2,035.33. The Russell 2000 gained 5.11 points (0.44%) to finish at 1,166.98, and the Wilshire 5000 climbed 94.15 points (0.44%) to 21,338.88.

On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, 2.8 billion shares traded, with 1.4 advancing issues for every declining issue on both exchanges.

The price of the 10-year Treasury note slipped 3/32, increasing its yield to 2.175%. The price of the 30-year Treasury bond was up 12/32, decreasing its yield to 2.814%.

Compliance
Groups Urge No More Rules for Brokerage Windows
Retirement industry groups responding to a request for information (RFI) from the Department of Labor (DOL) about the necessity of definition and disclosure regulations for brokerage windows were mostly against such guidance. As summed up in a letter from the Insured Retirement Institute (IRI), relatively few plan sponsors actually include brokerage windows in their plans, and among plans that do, an extremely small percentage of participants in those plans actually use the brokerage window. The IRI suggested, as did other industry groups, that imposing additional regulatory burdens with respect to brokerage windows would likely cause plan sponsors to cease offering them, which could adversely impact plan participants in one of several ways.Read more >
A brief submitted by the U.S. Solicitor General to the United States Supreme Court argues in favor of plaintiffs in Tibble v. Edison International—a case that could have implications for retirement plan sponsors’ ongoing duty to monitor investments. The brief argues that the plaintiffs’ claims for breaches of fiduciary duty are timely because “they are claims for breaches of the duty of prudence within the limitations period.” This is a critical issue in the case, which reached the Supreme Court from the 9th U.S. Circuit Court of Appeals on a question of whether damages assessed against utility company Edison International for failing to pursue cheaper share classes for mutual funds offered as retirement plan investments should be limited only to those funds added to the investment menu within the Employee Retirement Income Security Act’s (ERISA’s) six-year statute of limitations period.Read more >
IRS Weighs In on What Records to Keep
The Internal Revenue Service (IRS) notes that retirement plan sponsors are required by law to keep books and records available for review by the agency. On an updated Web page, “Maintaining Your Retirement Plan Records,” the IRS says saving these records will also facilitate answering questions when determining participants’ benefits. Plan sponsors should keep the plan and trust document, recent amendments, determination and approval letters, related annuity contracts and collective bargaining agreements. The records kept are based on the type of plan sponsored.Read more >
Small Talk

ON THIS DATE: In 1787, Pennsylvania became the second state to ratify the Constitution, by a vote of 46 to 23. In 1899, George Grant patented the wooden golf tee. In 1900, Charles M. Schwab formed the United States Steel Corporation. In 1901, Italian physicist and radio pioneer Guglielmo Marconi succeeded in sending the first radio transmission across the Atlantic Ocean. In 1917, in Omaha, Nebraska, Father Edward J. Flanagan, a 31-year-old Irish priest, opened the doors to a home for troubled and neglected children—Boys Town. In 1967, “Guess Who’s Coming to Dinner,” a groundbreaking movie about an interracial romantic relationship starring Katharine Hepburn, Spencer Tracy, Sidney Poitier and Katharine Houghton, opened in theaters. In 1970, “Tears Of A Clown” became Smokey Robinson & The Miracles’ first No. 1 pop hit. In 2000, General Motors declared it would begin to phase out the 103-year-old Oldsmobile, the oldest automotive brand in the United States.

 

And now it’s time for FRIDAY FILES!

Someone had a little fun with shoveling a path through the snow.Read more >

In Salt Lake City, Utah, a high school senior showed up to volunteer for a service project organized by her school’s National Honor Society and was turned away for wearing pants. The girl said she was dressed professionally in slacks and a jacket, but was told that pants are not allowed for female volunteers.

Somewhere over California, a Southwest airlines flight from San Francisco to Phoenix was diverted to Los Angeles after a woman gave birth to her second child on the plane. A passenger on the flight said most people aboard didn’t realize the woman was in labor until they heard the baby crying and her husband calling a flight attendant for help, according to MSN News. He said the woman told the surprised flight attendant: “I just had a baby.”

This video shows ways to wrap odd-shaped items and new ideas for wrapping normal-shaped items.Read more >

In Dell Prairie, Wisconsin, a 75-year-old driver was stopped after a deputy noticed his truck cross the center line on State Highway 13 and that the truck had a broken tail light, according to Channel 3000. The deputy said there was a smell of alc.ohol on the man’s breath and he failed a field sobriety test. A breath alcohol test showed a preliminary result of .062, which is more than the .02 limit the man is subject to because of his previous NINE convictions. However, the man denied he had been drinking alc.ohol, saying he ate be.er battered fish that night.

In Murfreesboro, Tennessee, a woman saw a dog chasing her cat in her backyard. So, she decided to get her 22 cal.iber handg.un and shoot the dog. However, while attempting to shoot it, she shot her own hand. Police met up with her at the hospital, but haven’t filed any charges yet.

Have a great weekend!
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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