Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 24th, 2014
Benefit Briefs
Ways Plan Sponsors Can Encourage Employees to Save
In honor of “America Saves Week,” Prudential
Retirement suggests ways plan sponsors can help their employees turn up the
savings to better prepare for retirement. Plan design is a great starting
point, says Christine Marcks, president of Prudential Retirement. “Spend time
working with the right adviser on plan design so it reflects the employer’s
objectives for work force management and their budget,” she tells PLANSPONSOR.
The Arizona Supreme Court upheld a March 2013
decision by the Maricopa County Superior Court that Arizona lawmakers acted
illegally when they passed legislation in 2011 requiring most sitting judges in
the state to pay more into their retirement system, the Elected Officials
Retirement Plan (EORP). The higher court also rejected the state’s argument
that reducing pensioners annual cost-of-living adjustments does not violate the
state’s constitution, saying the term “benefits” includes the promise
of future benefit increases using a specified formula.
Buyer's Market
USI Consulting Group has named David Brisnehan
as vice president of retirement services for its Irvine, California, office.
Brisnehan has worked in the areas of retirement, employee benefit and property
casualty consulting, the firm says. His 15 years of experience also includes
financial analysis, client service and investment consulting.
Time Is Ripe for Next Big All-ETF 401(k) Provider
An innovator in the offering of exchange-traded
funds (ETFs) in 401(k)s is selling its intellectual property. “We have been
running plans with all ETFs since October 2003, and continually enhancing our
product—keeping costs down and automating almost everything,” Darwin K.
Abrahamson, CEO and founder of Invest n Retire, LLC in Portland, Oregon, tells
PLANSPONSOR. The firm has filed for Chapter 11 bankruptcy protection.
Investment services provider American Century
Investments launched a collective investment trust (CIT) designed for defined
contribution (DC) participants that incorporates the firm’s One Choice Target
Date Portfolios. “Collective investment trusts are critical to the defined
contribution business because they give plan sponsors and their consultants
more flexibility in building investment lineups for their employees,” says Rick
Luchinsky, senior vice president of defined contribution investment-only (DCIO)
business at American Century Investments.
Economic Events
existing-home sales, which are completed transactions that include
single-family homes, townhomes, condominiums and co-ops, dropped 5.1% to a
seasonally adjusted annual rate of 4.62 million in January from 4.87 million in
December, and are also 5.1% below the 4.87 million-unit pace in January 2013. According
to the National Association of Realtors, last month’s level of activity was the
slowest since July 2012, when it stood at 4.59 million. THE
the Conference Board will release its Consumer Confidence Index for February. Wednesday, the Census Bureau will
report about new homes sales for January. Thursday,
the Census Bureau will report about durable goods orders for January, and the
Labor Department will release its initial claims report.
Market Mirror
Friday, the Dow slipped 29.93 points
(0.19%) to 16,103.30, the NASDAQ decreased by 4.13 points (0.10%) to 4,263.41,
and the S&P 500 was down 3.53 points (0.19%) at 1,836.25. The Russell 2000
was up 2.52 points (0.22%) at 1,164.63, and the Wilshire 5000 closed 20.86
points (0.11%) lower at 19,689.26. On the NYSE, 3.2 billion shares changed
hands, with 1.3 advancing issues for every declining issue. On the NASDAQ, 2.7
billion shares traded, with a nearly even split between advancers and
decliners. The yields for the 10-year Treasury note
and 30-year Treasury bond were 2.734% and 3.696%, respectively. WEEK’S
For the week ending February 21, the Dow was
down 0.32%, the NASDAQ was up 0.46%, and the S&P 500 slipped 0.13%. The
Russell 2000 climbed 1.34%, and the Wilshire 5000 finished 0.12% higher.
Financial Sense
Are Emerging Market Equities an Acquired Taste?
Spices and seasonings that originate in exotic
locales—curry, Sichuan peppercorns, ginger, cumin—take traditional Western
foods in enjoyable new directions. But they can be overwhelming, too, if
handled improperly or added in the wrong proportions. Plan sponsors take a
similar view when it comes to adding stocks from faraway places—such as
emerging market equities—as stand-alone options in their defined contribution
(DC) plan core menus. As a high-risk, high-return asset class, they are an
acquired taste, often seen in limited quantities or avoided altogether as
direct investments.
Rules & Regulators
ACA Employer Responsibility Relief Calls for Planning
Final regulations implementing the employer
responsibility provisions under the Patient Protection and Affordable Care Act
(ACA) provide some relief for employers, but require careful planning. In addition, the
final rules phase in the percentage of full-time workers to whom employers with
100 or more employees need to offer coverage—from 70% in 2015 to 95% in 2016
and beyond. “This
is to ease employers into the shared responsibility rule and protect them from
the ‘no-coverage’ penalty,” Andy Anderson, partner at Morgan Lewis &
Bockius LLP in Chicago, tells PLANSPONSOR. The 70% rule will provide employers
some cost relief and give them more time for planning.
Sponsored message from PLANSPONSOR
PLANSPONSOR Plan Sponsors of the Year
These awards recognize retirement plan sponsors that demonstrate leadership in providing a more secure retirement for workers across several categories and honored at the Awards for Excellence dinner. View the finalists and more dinner information.
Small Talk
Wells Fargo Offers Free Finance Seminars for Military
Banking and investment services provider Wells
Fargo says it is expanding its efforts to support military personnel and
veterans by offering a series of free online financial education seminars. The
webinars coincide with the unofficial Military Saves Week, which runs February
24 to March 2, alongside America Saves Week.
ON THIS DATE:  In 1803,
the Supreme Court, led by Chief Justice John Marshall, decided the landmark
case of Marbury vs. James Madison,
Secretary of State of the United States
 and confirmed the legal principle
of judicial review—the ability of the Supreme Court to limit
Congressional power by declaring legislation unconstitutional. In 1868, the U.S. House of Representatives
voted 11 articles of impeachment against President Andrew Johnson, nine of
which cited Johnson’s removal of Secretary of War Edwin M. Stanton, a violation
of the Tenure of Office Act. The House vote made President Johnson the first
president to be impeached in U.S. history. In 1982, Wayne Gretzky scored his 77th goal, breaking a record held by
Phil Esposito of 76 goals in a single season. In 1988, the U.S. Supreme Court voted 8-0 to overturn the $200,000
settlement awarded to the Reverend Jerry Falwell for his emotional distress at
being parodied in Hust.ler, a por.nographic
magazine. The court ruled that, although in poor taste, the parody fell within
the First Amendment’s protection of freedom of speech and the press. In 1991, after six weeks of intensive
bombing against Iraq and its armed forces during the Gulf War, U.S.-led
coalition forces launched a ground invasion of Kuwait and Iraq.
SURVEY SAYS: Best Picture Nominees
Last week, I asked NewsDash readers which Best
Picture nominations they’ve seen and which they feel should win. More than half
of responding readers (54.2%) have seen “American Hustle,” while half have seen
“Gravity.” “Captain Phillips” was seen by 45.8% of readers. One-third (33.3%)
have seen “The Wolf of Wall Street,” and one-quarter each have seen “Dallas
Buyer’s Club” and “Philomena.” “12 Years a Slave” was viewed by 16.7% of
readers, “Nebraska” by 12.5% and “Her” by 8.3%. Seen by the most respondents,
“American Hustle” also received the highest number of votes to win the Best
Picture Oscar, at 26.3%. “Captain Phillips” came in second with 21.1% of votes,
and “12 Years a Slave,” “Dallas Buyer’s Club” and “Gravity” tied for third with
10.5% of votes. All other movies were each selected by 5.3% of responding
readers. I also asked readers what movie they’ve seen they feel should have
been nominated for Best Picture this year. In verbatim responses, there were a
few negative comments about the Academy Awards. Several readers noted they have
not seen any of the nominated movies. Editor’s Choice goes to the reader who
said: “I look forward to this survey each year- reminds me to update my Netflix
queue!”  A big thank you to everyone who
participated in the survey!
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Sidecar Savings Accounts Create Current and Future Financial Security
Employer Health Benefit Costs to Rise 6.5% in 2020
Avoid Pitfalls to Properly Replacing DC Plan Investments
(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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