Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 20th, 2015
Benefits & Administration
Helping Participants Save More, Invest Better
The current average 401(k) participant deferral rate is 7.2%, and that is simply not high enough, according to Joe Ready, director of Institutional Retirement and Trust at Wells Fargo. Average deferral rates have been flat over the past three years, according to an analysis of data from 3.9 million 401(k) eligible employees at companies for whom Wells Fargo provides 401(k) plans. The number of participants contributing at least 10% (including company match) has increased by less than 3%, from 34.6% in the fourth quarter of 2011 to 37% in the fourth quarter of 2014. “Of all the behaviors 401(k) participants can do to improve their retirement outcome, this is the area with the least improvement but with potentially the greatest impact,” says Ready.Read more >
Written Plans for Retirement Are Better Motivators
The top financial concern among Americans remains having enough money for a comfortable retirement, according to a new analysis from the LIMRA Secure Retirement Institute. Nine out of 10 savers say a written plan helps them to better understand their goals, while three out of four feel they are more likely to follow a written plan for retirement.Read more >
Getting Auto-Enrollment Implementation Right
“When a retirement plan sponsor tells me they want to implement automatic enrollment, I always ask them why,” says Scott M. Dufek, a partner with Dufek & Co. Certified Public Accountants in Chicago, which provides auditing services for retirement plans. Dufek notes that he often gets blank looks when he asks that question, or the plan sponsor attended an event and heard that it was a good thing to do. “Some plan sponsors jump into it without thinking it through, and they often do not meet their goals or create administrative headaches,” he says.Read more >
Economic Events
In the week ending February 14, the advance figure for seasonally adjusted initial claims for unemployment insurance was 283,000, a decrease of 21,000 from the previous week’s unrevised level of 304,000, the Labor Department reported. The four-week moving average was 283,250, a decrease of 6,500 from the previous week’s unrevised average of 289,750. The average interest rate for a 30-year fixed-rate mortgage is 3.76%, up from 3.69% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.05%, up from 2.99%.
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Market Mirror

Yesterday, the Dow closed 44.08 points (0.24%) lower at 17,985.77, the NASDAQ climbed 18.34 points (0.37%) to 4,924.70, and the S&P 500 was down 2.23 points (0.11%) at 2,097.45. The Russell 2000 was virtually unchanged at 1,227.91, and the Wilshire 5000 decreased 19.85 points (0.09%) to 22,141.18.

On the NYSE, 3.2 billion shares traded, with a slight lead for decliners. On the NASDAQ, 2.8 billion shares changed hands, with a slight lead for advancing issues.

The price of the 10-year Treasury note was down 10/32, increasing its yield to 2.114%. The price of the 30-year Treasury bond decreased 19/32, bringing its yield up to 2.741%.

Compliance
PBGC Issues FAQs About Multiemployer Pension Reform
The Pension Benefit Guaranty Corporation (PBGC) has issued frequently asked questions (FAQs) about the Multiemployer Pension Reform Act of 2014 (MPRA). The FAQs are addressed to multiemployer plan participants, and provide a summary of certain reform provisions.Read more >
Investing
Northern Trust Agrees to Settle Securities Lending Suit
Northern Trust Investments has agreed to pay $36 million to settle a lawsuit claiming it violated the Employee Retirement Income Security Act (ERISA) in handling retirement plan assets invested in its securities lending program. The lawsuit alleges that Northern Trust breached its duties to retirement plans and their participants and beneficiaries by imprudently investing collateral received from securities lending activities and by charging impermissibly high fees. Plaintiffs Joseph Diebold, representing the ExxonMobil Savings Plan, and Paul Hundt, representing the Texas Instruments 401(k) Savings Plan, filed the lawsuit in 2009, alleging Northern Trust Investments and Northern Trust Co. had ignored warning signs indicating a different investment strategy was in order.Read more >
Small Talk

ON THIS DATE: In 1792, President George Washington signed legislation renewing the United States Post Office as a cabinet department led by the postmaster general, guaranteeing inexpensive delivery of all newspapers, stipulating the right to privacy and granting Congress the ability to expand postal service to new areas of the nation. In 1872, Silas Noble and J.P. Cooley patented the toothpick manufacturing machine. In 1962, from Cape Canaveral, Florida, John Hershel Glenn Jr. was successfully launched into space aboard the Friendship 7 spacecraft on the first orbital flight by an American astronaut. In 1998, American Tara Lipinski, at age 15, became the youngest gold medalist in winter Olympics history when she won the ladies’ figure skating title at Nagano, Japan.

 

And now it’s time for FRIDAY FILES!

Some facts about time that will make you think.Read more >

In Port Wilunga, Australia, a man sustained a gaping wound to his hand while using a chainsaw at his residence. He phoned two emergency departments, but was told that they were very busy and would not be able to treat him for more than 10 hours. According to the BBC, the man then used a large sewing needle and some fishing line to sew up the wound and washed it with gin to prevent infection. He also drank gin to help with the pain. The man later decided to drive to the hospital for treatment after not being able to contact his wife. He was pulled over by police after failing to stop at a sign, and charged with several driving offenses as well as being issued an immediate license disqualification. He recently lost an appeal to his dru.nk driving charge.

In Irving, Texas, a passerby reported what was believed to be a half-na.ked woman’s body in a box near the entrance to the landfill. Police found the woman alive, but very dru.nk. According to the local CBS news station, a friend had reported her missing after he left her at the curb of a nightclub to get his car and came back and she was gone. Initial exams showed no signs of as.sault, and the woman says she doesn’t remember how she got to the landfill. Lesson learned?

In Deerfield Beach, Florida, a woman went with her friend and three-year-old daughter to a liq.uor store. The friend got into an argument with another customer, pulled out a gun and chased the other customer outside. When he came back in, he fumbled with the gun and shot himself in the leg. He then handed the gun to the woman, and the two ran out of the store to hide the gun. However, they left the three-year-old there. The woman has been charged with child neglect and tampering with evidence. 

In Boston, Massachusetts, a man spent a significant amount of time shoveling snow out of a parking space, and placed an old bookshelf in it when he left February 8 to work an evening shift. When he came home around midnight, he found a car parked in the spot. So, the man decided to “put the snow back.”Read more >

In Hull, England, a man and woman went to the city council office to get married. During a pre-wedding meeting with a registrar, the man excused himself to make a phone call—to find out what his intended-bride’s name was. According to Sky News, the registrar notified authorizes and the couple was arrested for conspiracy to facilitate a breach of immigration law.

In Iiyama, Japan, the Iiyama Snow Festival Planning Committee held a “1,500 Snowmen Challenge,” designed to commemorate the planned opening of a train station. More than 500 people constructed 1,585 snowmen within an hour, breaking a Guinness World Record. The previous record of 1,279 snowmen was set in Utah in 2011. According to UPI, officials said each snowman had to be at least 36 inches tall and be composed of three snowballs with eyes, a nose and arms.

In Boston, Massachusetts, commuters experienced a traffic jam… caused by a boat. The boat was being transported early to the convention center for a boat show, ironically, to avoid weather-related complications as Boston is due another snowstorm, when it got stuck in a snowbank. UPI says downtown Boston Business Improvement District ambassadors grabbed shovels and cleared the snow from around the boat with help from a construction crew.

Have a great weekend!
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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