Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 23rd, 2015
Benefits & Administration
Fewer Seniors Delaying Retirement
Motivated by an improving economy, 53% of senior workers (ages 60 and older) are delaying retirement, a post-recession low, down from 58% in 2014 and 66% in 2010. “As household financial situations continue to rebound from the recession, economic confidence among senior workers is significantly improving,” says Rosemary Haefner, chief human resources officer for CareerBuilder. However, retirement is still far off or even unlikely for many senior workers, according to the company’s annual retirement survey.Read more >
Who Has a Realistic View of Retirement Readiness?
A study, “Do U.S. Households Perceive Their Retirement Preparedness Realistically?” analyzed the deviation between households’ actual preparedness for retirement and their assessment of retirement readiness, focusing on what factors make some unrealistically optimistic despite being inadequately prepared. Researchers KyoungTae Kim, from the University of Alabama Department of Consumer Sciences, and Sherman D. Hanna, from Ohio State University, found households with a defined benefit (DB) pension plan are more likely to be unrealistic than similar households without one.Read more >
Retirement Readiness Not Just About Money
Jay Vadiveloo, professor of mathematics and director of the Goldenson Center for Actuarial Research at the University of Connecticut, set out to measure several factors that affect one’s preparedness for retirement, in an attempt to provide “a more holistic measure.” The standard way of measuring individuals’ ability to retire compares their current net assets with the projected value of those assets at some point in the future. The problem, according to Vadiveloo, is that those projections are hugely dependent on the performance of financial markets. “These retirement indices are directly correlated with the current state of the economy and tend to portray a negative image of retirement readiness during adverse economic times, which could be misleading,” he says.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Today, the National Association of Realtors will report about existing home sales for January. Tomorrow, The Conference Board will issue its Consumer Confidence Index for February. Wednesday, the Census Bureau will report about new home sales for January. Thursday, the Labor Department will issue its initial claims report, the Bureau of Labor Statistics will reveal the consumer price index (CPI) for January, and the Census Bureau will report about durable goods orders for January.
MOST READ ARTICLES
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What Participants Want From Employers’ Retirement Plan Websites
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2021 Recordkeeping Survey
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Allowing for After-Tax Contributions in a 401(a) Plan
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Sponsored message from AICPA
How Confident Are You in Your ERISA Compliance Procedures?
The AICPA Employee Benefit Plans Conference features CPAs who specialize and government representatives who correct plan failures. Get updates on class action cases and procedures to suit your needs.Read more >
Market Mirror

A deal between Greece and its creditors helped push major U.S. stock indices higher Friday. The Dow climbed 154.67 points (0.86%) to 18,140.44, the NASDAQ gained 31.27 points (0.63%) to finish at 4,955.97, and the S&P 500 closed 12.81 points (0.61%) higher at 2,110.26. The Russell 2000 was up 3.87 points (0.31%) at 1,231.78, and the Wilshire 5000 increased 137.37 points (0.62%) to 22,278.55.

On the NYSE, 3.2 billion shares changed hands, with advancing issues outnumbering declining issues more than 2 to 1. On the NASDAQ, 2.8 billion shares traded, with a slight lead for advancers.

The price of the 10-year Treasury note slipped 2/32, bringing its yield up to 2.122%. The price of the 30-year Treasury bond increased 5/32, decreasing its yield to 2.727%.

WEEK’S WORTH: For the week ending February 20, the Dow finished 0.67% higher, the NASDAQ gained 1.27%, and the S&P 500 increased 0.63%. The Russell 2000 and the Wilshire 5000 each gained 0.71%.

Compliance
Lockheed Martin Fee Case Settled
A $62 million settlement between Lockheed Martin and participants in its 401(k) plan brings to rest a nearly decade-old complaint arguing Lockheed failed to adequately negotiate for lower plan fees. The settlement also includes a range of non-monetary relief provisions to ensure compliance with the settlement and enhance the 401(k) plan for the benefit of Lockheed Martin employees and retirees.Read more >
Small Talk
ON THIS DATE:  In 1813, the first U.S. raw cotton-to-cloth mill was founded in Waltham, Massachusetts. In 1836, in San Antonio, Texas, the siege of the Alamo began. In 1896, the Tootsie Roll was introduced by Leo Hirshfield. In 1940, Walt Disney’s animated movie “Pinocchio” was released. In 1945, during the bloody Battle for Iwo Jima, U.S. Marines from the 3rd Platoon, E Company, 2nd Battalion, 28th Regiment of the 5th Division took the crest of Mount Suribachi, the island’s highest peak and most strategic position, and raised the U.S. flag. Joe Rosenthal, a photographer with the Associated Press, met them along the way and recorded the raising of the second flag along with a Marine still photographer and a motion-picture cameraman. In 1954, a group of children from Arsenal Elementary School in Pittsburgh, Pennsylvania, received the first injections of the new polio vaccine developed by Dr. Jonas Salk. In 1963, the 24th Amendment to the U.S. Constitution was ratified. It prohibited poll taxes in federal elections. In 1978, both Barbra Streisand’s “Love Theme from A Star Is Born (Evergreen)” and Debby Boone’s “You Light Up My Life” were awarded the Best Song Grammy—the first and only tie in that category in Grammy history.
SURVEY SAYS: Retirement Plan Committees
Last week, I asked NewsDash readers, “Do you think your company’s retirement plan committee is in tune with the latest trends? Do you think it’s helpful for non-executive employees to serve on retirement plan committees?” The good news is 73.2% of responding readers think their retirement plan committees are in tune with the latest trends in plan design and investments. However, nearly 22% don’t think their committees are in tune with the latest trends, and 4.9% reported they do not have a retirement plan committee. More than 20% of respondents said the most recent plan design improvement their company’s retirement plan committee approved or implemented was a move to lower-fee investment funds, while 18% indicated it was the addition of investment choices other than target-date funds, managed accounts or lifetime income options. Sixty percent of responding readers think it is helpful to allow non-executive employees to serve on retirement plan committees, while one-quarter say it depends on the employee demographics or size of employer. The need for non-executive employees on retirement plan committees was expressed emphatically by many readers who chose to share comments. Others commented on what their retirement plan committees know, not just about trends, but about their fiduciary duties. Editor’s Choice goes to the reader who said, “Think herding cats. It is not their main job and is hard to keep them informed of the latest trends and what current employees are up to.” A big thank you to all who responded to the survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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