Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 13th, 2015
Benefits & Administration
HSAs See Solid Investment Returns
Health savings accounts (HSAs) held $24.2 billion in assets as of December 31, 2014, including $21 billion in contributions and $3.2 billion from investments, according to an analysis of the HSA market from Devenir.Read more >
New Mortality Tables Increased DB Liabilities by $100B
For year-end 2014, Moody’s estimates that pension funding levels for its rated U.S. corporates decreased, by 8 percentage points, to 78% of pension obligations, versus a year earlier. According to Moody’s recent Credit Outlook, in dollar terms, this equates to $201 billion of increased underfunding. The ratings agency says two forces drove this large plunge in 2014: lower discount rates and increased longevity.Read more >
Sponsors Active on Pension Risk and DC Cost Cutting
A new Aon Hewitt survey shows there are many reasons pension plan sponsors look to address risk in their pension plan offerings, but reducing Pension Benefit Guaranty Corporation (PBGC) premiums stands out as a common target. Nearly one in five pension plan sponsors (19%) polled by Aon Hewitt plans to increase cash contributions this year to reduce future PBGC premiums assessed against unfunded liabilities. The survey of 183 defined benefit (DB) plan sponsors found that, as pension plan sponsors continue to look for ways to reduce risk, almost two-thirds plan to take some risk-mitigating action in 2015, with settlement strategies topping the list.Read more >
Lockheed Reports Reduced DB Obligations from Lump Sums
Lump-sum payments from Lockheed Martin’s defined benefit (DB) pension plan to certain former employees who had not commenced receiving their vested benefit payments reduced its pension benefit obligation by a significant amount, the company reported in a filing with the Securities and Exchange Commission (SEC). The company made lump-sum payments of $427 million in 2014, and the corresponding reduction in benefit obligation was $529 million.Read more >
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Economic Events

In the week ending February 7, the advance figure for seasonally adjusted initial claims for unemployment insurance was 304,000, an increase of 25,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 289,750, a decrease of 3,250 from the previous week’s revised average.

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for December, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,331.2 billion, down 0.9% from November 2014, but up 0.9% from December 2013.

Advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $439.8 billion, a decrease of 0.8% from the previous month, but up 3.3% above January 2014. Total sales for the November 2014 through January 2015 period were up 3.8% from the same period a year ago. The November to December 2014 percent change was unrevised from -0.9%.

The average interest rate for a 30-year fixed-rate mortgage is 3.69%, up from 3.59% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 2.99%, up from 2.92%.

Market Mirror

Major U.S. stock indices closed higher as technology, materials and energy companies reported gains. The Dow was up 110.24 points (0.62%) at 17,972.38, the NASDAQ gained 56.43 points (1.18%) to finish at 4,857.61, and the S&P 500 increased 19.95 points (0.96%) to 2,088.48. The Russell 2000 climbed 14.70 points (1.22%) to 1,216.25, and the Wilshire 5000 closed 215.03 points (0.99%) higher at 22,022.24.

On the NYSE, 3.2 billion shares traded, with advancing issues outnumbering declining issues more than 3 to 1. On the NASDAQ, 2.7 billion shares changed hands, with a more than 2 to 1 lead for advancers.

The price of the 10-year Treasury note was unchanged, with its yield at 1.986%. The price of the 30-year Treasury bond increased 11/32, bringing its yield down to 2.573%.

Investing
For Pensions, Active Investing Pays Off
Financial research and benchmarking provider CEM Benchmarking says its most recent report contains enough data to prove active investing is worthwhile for pension funds, if executed efficiently and effectively. As noted in the report, “Value Added by Large Institutional Investors Between 1992‐2013,” it is a widely held academic and investing industry belief that active investors have, on average, no real advantage over passive investors over the long term, and can even see worse performance over time due to higher fees. This view on investing strategy is rooted in the efficient market hypothesis, researchers explain.Read more >
Small Talk

ON THIS DATE: In 1915, the American Society of Composers, Authors and Publishers (ASCAP) was founded to protect the copyrighted musical compositions of its members. In 1920, the League of Nations, the international organization formed at the peace conference at Versailles in the wake of World War I, recognized the perpetual neutrality of Switzerland. In 2000, Charles M. Schulz’s last original Sunday “Peanuts” comic strip appeared in newspapers. Schulz had died the day before.

 

And now it’s time for FRIDAY FILES!

This is what happens when you tell a cat “NO!”Read more >
It looks pretty cool when a train plows through snow.Read more >

In Ambridge, Pennsylvania, police used Facebook to find a man wanted on as.sault charges. An hour after the incident, he posted on Facebook that it was “time to leave PA.” That didn’t give officers much of a clue, but days later, he made another Facebook post with a selfie on a Greyhound bus and a message that he was headed to South Carolina. According to the Associated Press, police arrested him when the bus stopped in Ohio. The Ambridge police chief said, “We like it when dumb criminals assist us.”

In Minneapolis, Minnesota, the Ruff Start Rescue, an animal shelter that partners with the Minneapolis PetSmart to have its adoptable animals displayed at the store, said a three-month-old kitten was stolen from the store, and the man accused of taking the cat was caught on the store’s security cameras. However, according to UPI, less than 24 hours later, the kitten was found in a box outside of a PetSmart store in nearby Roseville. A note left with the kitten said, “I didn’t have money and had planned to give the kitten as a Valentine’s Day gift. I’m sorry.”

What is a cat to do when faced with a door of snow?Read more >

In Belém, Brazil, a merchant left a grocery store to investigate a commotion across the street. The commotion was caused by a robbery and the thief opened fire, hitting the merchant on the left side of her chest. She staggered back into the store and was quickly taken to get medical attention. It was discovered that the bullet was stopped by the metal underwire in the merchant’s undergarment. The woman only reported feeling a burning sensation.

In Wichita Falls, Texas, a man took cash, including a roll of tightly wound $1 bills, to the tax office to pay his property tax. Tax officials requested that he unfold the bills so they could count them, and the man launched into a tirade. According to Reuters, the man engaged in an anti-government rant where he showed his anger about paying taxes. He refused to leave the office, and law enforcement was called and arrested him.

In Tampa, Florida, Hillsborough County Sheriff’s officials say a couple had been sleeping in a dumpster outside a convenience store when the dumpster was emptied into the back of a garbage truck. The couple started screaming and banging on the sides of the truck. According to the Associated Press, rescue crews were called and removed the man and woman from the truck. Deputies originally believed they were homeless, but learned they were highly into.xicated after hanging out at a nearby casino.

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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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