Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 19th, 2014
Benefit Briefs
Interactive Financial Education Better Engages Gens X and Y
There are personality traits of Generations X and Y that can drive retirement and financial education strategies. According to Matt Iverson, founder of Boulevard R, Gen X (ages 38 to 49) can be described as cynical, entrepreneurial, realists and guarded. So, communication must prove value, provide transparency and include scenario planning to resonate with this generation. Gen Y (ages 18 to 37) can be described as confident, smart, optimistic and collaborative, Iverson said during a webinar. Communication with this generation requires customization, authenticity and multiple resources.
Rhode Island Governor Lincoln D. Chafee and General Treasurer Gina M. Raimondo, as well as attorneys representing public employee unions and retiree coalitions that challenged changes to the state-administered pension system, recently announced a settlement agreement. According to the involved parties, the settlement agreement retains structural elements of the Rhode Island Retirement Security Act of 2011, including the move to a combined defined benefit and defined contribution plan, an increased retirement age, and a cost-of-living adjustment (COLA) suspension until the system is at a stronger funding level.
Pre-Retirees Need Strategies for Withdrawing DC Assets
A new study finds 27% of U.S. workers ages 55 to 64 say they do not know how they will use their defined contribution (DC) plan savings after they retire. According to the study from LIMRA Secure Retirement Institute (LIMRA SRI), women are much more likely than men not to have planned how they will use their DC assets (38% vs. 19%). “It is surprising that such a large proportion of older workers have failed to do this basic level of income planning when most are within 10 years of retirement,” says Matthew Drinkwater, associate managing director, LIMRA SRI Research.
Most 401(k) Plan Fees Declining or Flat
In 2013, costs for small retirement plans decreased, while those for larger plans remained flat. According to the 14th edition of the 401k Averages Book, the average total plan cost for a small retirement plan (50 participants and $2,500,000 assets) declined from 1.46% to 1.44%, while the average total plan cost for a large retirement plan (1,000 participants and $50,000,000 assets) remained flat at 1.03%.
Buyer's Market
Invesco PowerShares Capital Management’s PowerShares International BuyBack Achievers Portfolio will be listed on the NASDAQ stock market starting February 27. The portfolio will provide investors efficient access to a portfolio of international companies classified as International BuyBack Achievers. BuyBack Achievers are companies that have effected a net reduction of 5% or more of their outstanding shares in the past 12 months, and have met additional criteria in accordance with the guidelines and mandated procedures of the NASDAQ OMX Group, Inc., the underlying index provider.
New Guide Supplements DOL TDF Tips
The Defined Contribution Institutional Investment Association (DCIIA) has released a white paper titled, “DCIIA Guide to U.S. Department of Labor Tips on Selecting Target Date Funds.” The paper is intended to supplement the Department of Labor’s (DOL’s) fact sheet about selecting target-date funds (TDFs) and offer additional information about the different types of products that may be available.
A registered investment adviser (RIA) firm has signed on to provide 3(38) investment manager services for a multiple employer plan (MEP) offering. Redhawk Wealth Advisors, Inc. has entered into a strategic alliance with Centier Bank, a regional bank and trust company, under which Redhawk will serve as the ERISA 3(38) provider for the Centier Open MEP.
Jim Mitchell joined BMO Global Asset Management as vice president and relationship manager, BMO Taft-Hartley Services. Mitchell will be responsible for developing new, national relationships in the organized labor community. Based in Chicago, he will work in collaboration with Keith Giemzik, vice president and relationship manager at BMO Taft-Hartley Services.
Market Mirror
The Dow ended 23.99 points (0.15%) lower Tuesday, at 16,130.40, while the NASDAQ climbed 28.76 points (0.68%) to 4,272.78, and the S&P 500 was up 2.13 points (0.12%) at 1,840.76. The Russell 2000 gained 12.26 points (1.07%) to finish at 1,161.47, and the Wilshire 5000 closed 54.03 points (0.27%) higher at 19,719.80. On the NYSE, 3.2 billion shares changed hands, with a near 2 to 1 lead for advancers. On the NASDAQ, 2.7 billion shares traded, with advancing issues outnumbering declining issues more than 2 to 1. The price of the 10-year Treasury note was up 12/32, and the price of the 30-year Treasury bond was up 13/32, bringing their yields down to 2.709% and 3.676%, respectively.
Financial Sense
Risk Management Increasingly Important for Institutions
More than 80% of institutional investors expect risk management to play an even greater role in the investment decision process in the future, says a new study. Published by BNY Mellon, “New Frontiers of Risk: Revisiting the 360-Degree Manager” also finds over the next five years, 73% of institutional investors expect to spend more time on investment risk issues, while 68% expect to spend more time on operational risk issues. Only 25% of respondents, however, have a chief risk officer.
Sponsored message from PLANSPONSOR
PLANSPONSOR Plan Sponsors of the Year – Corporate 401(k) – less than $50M Finalists include COX SMITH MATTHEWS INCORPORATED, Draper, Inc. and Landsman Development Corp. Winners in each category will be announced in February and recognized at the Awards for Excellence dinner. View other categories.
Small Talk
The iMaximize Social Security Calculator helps anyone at or nearing retirement age determine the best strategy to maximize Social Security benefits. There are more than 700 unique filing strategies; however, the majority of Americans file early, at a reduced benefit, possibly leaving $100,000’s in lifetime income on the table. iMaximize effortlessly calculates the most advantageous strategy for the user and generates a detailed summary output that is easy to understand and follow. The FREE iMaximize Social Security app is available in the Apple App Store, the Android Market and on the Web.
ON THIS DATE:  In 1807, Aaron Burr, a former U.S. vice president, was arrested for treason in Alabama on charges of plotting to annex Spanish territory in Louisiana and Mexico to be used toward the establishment of an independent republic. In 1847, the first rescuers reached surviving members of the Donner Party, a group of California-bound emigrants stranded by snow in the Sierra Nevada Mountains. In 1878, Thomas Alva Edison was awarded U.S. Patent No. 200,521 for the phonograph. In 1942, ten weeks after the Japanese bombed Pearl Harbor, U.S. President Franklin D. Roosevelt signed Executive Order 9066, authorizing the removal of any or all people from military areas “as deemed necessary or desirable.” The military in turn defined the entire West Coast, home to the majority of Americans of Japanese ancestry or citizenship, as a military area. By June, more than 110,000 Japanese Americans were relocated to remote internment camps built by the U.S. military in scattered locations around the country. In 1945, Operation Detachment, the U.S. Marines’ invasion of Iwo Jima, was launched. Iwo Jima was a barren Pacific island guarded by Japanese artillery, but to American military minds, it was prime real estate on which to build airfields to launch bombing raids against Japan, only 660 miles away.   WEDNESDAY WISDOM: “Don’t brood. Get on with living and loving. You don’t have forever.”—Leo Buscaglia, author     Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.
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Participant Data Breach Hits Retirement Clearinghouse
Ask the Experts
Are Emergency Savings Account Deferrals Subject to Nondiscrimination Testing?
Major Savings Barriers Include Benefits Language, Financial Stress

Editorial: Alison Cooke Mintzer


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