Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 18th, 2014
Industry Insights
The Next Great DB Risk: Complacency
What a difference a year makes—strong investment
performance and a modest rise in interest rates during 2013 caused a steep
increase in the funded status of the typical defined benefit (DB) plan,
reversing a multi-year downward trend. The improvements moved most frozen plans
closer to being ready for termination and gave active plans a welcome reprieve
from the pains of the last several years. But the drastic improvements could
lull plan sponsors into a false sense of security that could result in
complacency at a time when they should be evaluating what actions to take.
Benefit Briefs
Non-ERISA 403(b)s an Endangered Species
Aside from government and non-electing church
plans, is there really such thing as a non-ERISA 403(b), given the rules plan
sponsors must follow now? “Yes, non-ERISA still exists, the safe harbor is
still available, but organizations will have to work at it,” Robert J. Toth
Jr., from the Law Office of Robert J. Toth Jr. in Fort Wayne, Indiana, tells
PLANSPONSOR. However, Toth contends the Department of Labor (DOL) really
doesn’t like non-Employee Retirement Income Security Act (ERISA) plans because
in its view, they lessen participant protections.
Buyer's Market
As traditional defined benefit pension plans are
placing a strain on state and local budgets, policymakers across the country
are taking a closer look at alternative ways to design a retirement plan. A new
brief provides an overview of cash balance plan designs and discusses related
policy issues.
Participant Planning Guides Available from IFEBP
Two updated employee retirement planning guides
from the International Foundation of Employee Benefit Plans (IFEBP) offer help
with timing retirement and managing pension benefits.
Economic Events
THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing
starts for January, and the Bureau of Labor Statistics will reveal the Producer
Price Index (PPI) for January. Thursday, the Labor Department will issue its
initial claims report, and Friday, the National Association of Realtors will
report about existing home sales for January.
Market Mirror
The Dow climbed 126.80 points (0.79%)
Friday, to 16,154.39. The NASDAQ added 3.35 points (0.08%) to finish at
4,244.03, and the S&P 500 closed 8.80 points (0.48%) higher at 1,838.63.
The Russell 2000 increased by 1.40 (0.12%) to 1,149.19, and the Wilshire 5000
closed at 19,665.77, up 80.08 points (0.41%). On the NYSE, 3.2 billion shares changed
hands, with advancing issues outnumbering declining issues nearly 2 to 1. On
the NASDAQ, 2.6 billion shares traded, with a slight lead for advancers. The price of the 10-year Treasury note
decreased 3/32, bringing its yield up to 2.745%. The price of the 30-year
Treasury bond was unchanged, with its yield at 3.693%. WEEK’S
 For the week ending February 14, the Dow was up
2.28%, the NASDAQ gained 2.86%, and the S&P 500 increased 2.32%. The
Russell 2000 climbed 2.92%, and the Wilshire 5000 finished 2.41% higher.
Financial Sense
Does your employee retirement education include
information about carrying a mortgage into retirement? It can have a big impact
on retirement wealth, says a report from the National Center for Policy
Analysis (NCPA).
Rules & Regulators
The U.S. District Court for the Middle District
of Florida consented to the DOL appointing Jeanne Bryant of Brentwood,
Tennessee, as an independent fiduciary for the terminated IAQ Inc. 401(k) Plan.
The DOL learned that former fiduciary Gail Garrow and IAQ distributed assets to
only five plan participants. The account balances of the remaining 40
participants were not distributed and remained in the operating account of IAQ.
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Small Talk
Love Is in the Air at the Workplace
Workplace romances are not merely the stuff of
TV sitcoms, according to a new survey. CareerBuilder finds more than one-third
of employees (38%) have dated someone who worked for the same company, with 16%
having done so more than once. Of those who dated someone from the office,
nearly one-third (31%) ended up marrying their office sweetheart.
ON THIS DATE:  In 1885,
Mark Twain published his famous novel “The Adventures of Huckleberry Finn.” In 1929, The Academy of Motion Picture
Arts and Sciences announced the winners of the first Academy Awards. In 1930, Pluto, once considered the ninth
planet, was discovered at the Lowell Observatory in Flagstaff, Arizona, by
astronomer Clyde W. Tombaugh. In 2001,
Dale Earnhardt Sr., considered one of the greatest drivers in National
Association for Stock Car Auto Racing (NASCAR) history, died at the age of 49
in a last-lap crash at the 43rd Daytona 500 in Daytona Beach, Florida.
SURVEY SAYS: Performance Reviews
Last week, I asked NewsDash readers what they
think about their companies’ employee appraisal/performance review process.
Ninety-four percent of responding readers reported their firms use a formal
employee appraisal/performance review program. Nearly three in ten (29.4%) of
respondents said they are “very dissatisfied” with their companies’ programs.
Twenty-eight percent reported being somewhat satisfied, 22.1% are somewhat
dissatisfied and 5.9% are very satisfied. When asked what they like about the
appraisal process, nearly four in ten (39.7%) responding readers like being
able to let their boss know about the work they’ve done. About one-third each
said they can get input from their boss about their work (32.4%) and they usually
get a raise after appraisal time (33.8%). When asked what they disliked about
the appraisal process, 34.3% said rarely is any action taken on goals. Nearly
one-third (32.8%) stated it takes to much time, 31.3% feel uncomfortable rating
themselves, and 22.4% indicated their bosses do not really know what they do.
The majority of the verbatim comments can be summed up with one reader’s
sentiment: “It is inherently capricious, subjective and a complete waste of
time.” Editor’s Choice goes to the reader who said: “Once a year it is the most
painful part of my job.” A big thank you to everyone who participated in the
Screenwriter Sidney Howard was posthumously nominated for an Oscar for “Gone
with the Wind” in 1939. He also won.
was the first actor posthumously nominated for an Academy Award?
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prior authorization.
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(b)lines Ask the Experts – Can a 401(a) Plan Account be Rolled Into a 403(b) Plan?
Plan Sponsors Should Address Financial Squeeze Put on Gen X

Editorial: Alison Cooke Mintzer


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