Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 13th, 2014
Benefit Briefs
Doing More to Help Participants Reach Retirement Goals
Michael Barry, president of the Plan Advisory
Services Group, has been thinking a lot lately about retirement goals—more or
less the issue of target income-replacement ratios. He’s come to the conclusion
that the project of setting a specific goal that a participant must “save to”
is seriously misleading.
Health savings accounts (HSAs) grew to exceed
$20 billion in assets during January, according to a new survey. The survey was
conducted by Devenir, a provider of investment solutions for the HSA custodian
marketplace. Findings from the survey indicate that HSAs grew to an estimated
$19.3 billion in assets and 10.7 million accounts at year-end 2013, and then
exceeded the $20 billion mark in January.
More Employers Contribute to Employee Health Accounts
Nearly three-quarters
of employees (71%) with a health reimbursement account (HRA) or health savings
account (HSA) say their employers contributed to it in 2013. According the 2013
Consumer Engagement in Health Care Survey, conducted by the Employee Benefit
Research Institute (EBRI) and Greenwald & Associates, the percentage of
employers contributing to their employees’ health accounts has been steadily
increasing since 2009.
Buyer's Market
Ascensus Separates Retirement and College Savings
Retirement plan services provider Ascensus
created a new organizational structure to support the firm’s growth
expectations in the retirement and college savings space. The new structure
segments the business into two divisions—retirement services and college
savings—and implements a realignment of the company’s leadership team.
Market Mirror
The Dow slipped 30.83 points (0.19%)
Wednesday, to 15,963.94. The NASDAQ was up 10.24 points (0.24%) at 4,201.29,
and the S&P 500 decreased by 0.49 points (0.03%) to finish at 1,819.26. The
Russell 2000 ticked up 3.37 points (0.30%) to 1,132.54, and the Wilshire 5000
closed 10.61 points (0.05%) higher at 19,451.71.   On the NYSE, 3.2 billion shares changed
hands, with 1.3 advancing issues for every declining issue. On the NASDAQ, 2.7
billion shares traded, with a slight lead for advancers.   The price of the 10-year Treasury note
was down 8/32, with its yield up to 2.758%. The price of the 30-year Treasury
bond decreased 18/32, increasing its yield to 3.720%.
Financial Sense
Pension finances endured a rocky start to 2014. There
were major hits to both asset and liability measures, as equity returns were
uniformly negative and interest rates dropped significantly. The Towers Watson Pension
Index dropped 5.1% to 74.2, essentially giving up all the prior quarter’s
gains.
Rules & Regulators
The Tests You Don’t Want to Fail
Good news: Your employees are contributing to
the 401(k) plan. Bad news: Your highly compensated employees are contributing
more than others to the 401(k) plan. Every employer-sponsored 401(k) plan must undergo
non-discrimination tests in order to make sure the plan is not too highly
weighted in favor of upper-level employees. An employer has several options to improve test
results, Derrin Watson, an attorney with the Relius Education division of
SunGard Financial, tells PLANSPONSOR.
The Puerto Rico Treasury Department has issued
guidance about retirement plan deferral limits for 2014.
DOL Wins Lawsuit Over Unremitted Contributions
Two Department of Labor (DOL) lawsuits have
resulted in plan trustees of an Aurora, Illinois, business being ordered to
restore more than $4 million in employee contributions and other losses. The lawsuits, brought
on behalf of plan participants, sought the recovery of $75,416.72 in unremitted
employee contributions and participant loan repayments, and associated lost
opportunity costs to the Mid-States Express Inc.’s 401(k) Plan.
Small Talk
ON
THIS DATE:
  In
1635, the Boston Public Latin School—the
first public school building in the United States—was established. In
1741, “The American Magazine,” the
first magazine in the U.S., was published in Philadelphia, Pennsylvania. In 1914, the American Society of
Composers, Authors and Publishers (known as ASCAP) was formed in New York City.
The society was founded to protect the copyrighted musical compositions of its
members. In 2000, Charles M. Schulz’s
last original Sunday “Peanuts” comic strip appeared in newspapers. Schulz had
died the day before. In 2002, former
New York mayor Rudolph Giuliani received an honorary knighthood from Queen
Elizabeth II.
SURVEY SAYS:
This week, I’d like to know what you think about the employee
appraisal/performance review process at your company and in general.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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