Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 25th, 2014
Webcast Event
Nonqualified plan decisions are becoming
increasingly complicated for key employees. This webcast will highlight our
2013 MullinTBG-PLANSPONSOR Executive Benefits Survey results with a focus on
how we can leverage behavioral science to influence participant engagement
strategies that help increase plan effectiveness, produce better outcomes, and
provide for a safe and secure retirement. Join MullinTBG’s Mark Maizel and
special guest Adam Alter, an NYU Stern School of Business professor and
best-selling author, as we review this year’s data and explore the psychology
of decisionmaking and its application to nonqualified plans.
Benefit Briefs
U.S. Retirement System Barely Holds Top 20 Spot
The United States narrowly holds its spot among
the top 20 nations globally in its capacity to meet retirement security needs
and expectations. According to the 2014 Global Retirement Index, published by
Natixis Global Asset Management, the U.S. scored 19th among 150 nations
analyzed, as the benefits of increasing U.S. economic stability are moderated
by the potential for rising interest rates and inflation, as well as persistent
income inequality. “It’s important to remember the index is not simply focused
on retirement savings, it’s a combination of factors,” Edward Farrington,
executive vice president and leader of Retirement and Offshore Sales at Natixis
Global Asset Management in Boston, tells PLANSPONSOR. “What’s missing for us is
just to expand opportunities for retirement savings. We need to find ways to
incent people to save more for retirement so they have a pool of assets that
will finance them to live longer than their parents.”
Stronger Economy, Weaker Savings
A joint survey from four retirement industry
advocacy groups, released as part of America Saves Week, finds improving
macroeconomic conditions haven’t reversed widespread savings challenges. The
seventh annual national survey assessing household saving—released by the Consumer
Federation of America (CFA), America Saves, the American Savings Education
Counsel, and the Employee Benefit Research Institute (EBRI)—finds most
Americans continue to face significant personal savings challenges. When asked
if they were making progress in meeting their savings needs, only about
one-third (35%) of U.S. workers say they are making “good” or “excellent”
progress. That compares with nearly two-thirds (63%) who report making either
“fair” or “no” progress towards savings benchmarks.
Retirement Specialist Advisers Give Plan Sponsors an Edge
Working with a financial adviser entirely
dedicated to retirement plans gives plan sponsors an edge over peers who do not
do so. A study from the industry advocacy group Retirement Advisor Council,
“Partner with a Professional Retirement Plan Advisor and Achieve Higher
Participant Retirement Readiness Scores,” compares retirement specialist
advisers with two other broadly defined channels—benefits consultants and
investment consultants—that are regularly engaged by retirement plans. Many
findings in the report’s underlying survey suggest the advantage of working
with a retirement specialist over other types of consultants, Steven LaValley, second
vice president of retirement services at MassMutual Financial Group, tells PLANSPONSOR.
Market Mirror
Yesterday, the Dow closed 103.84 points
(0.64%) higher at 16,207.14, the NASDAQ climbed 29.56 points (0.69%) to 4,292.97,
and the S&P 500 was up 11.36 points (0.62%) at 1,847.61. The Russell 2000
gained 9.92 points (0.85%) to finish at 1,174.55, and the Wilshire 5000
increased 123.32 points (0.63%) to 19,812.58. On the NYSE, 3.2 billion shares traded,
with 1.6 advancing issues for every declining issue. On the NASDAQ, 2.7 billion
shares changed hands, with a nearly 2 to 1 lead for advancers. The price of the 10-year Treasury note was down 3/32,
bringing its yield up to 2.746%. The price of the 30-year Treasury bond slipped
5/32, increasing its yield to 3.705%.
Rules & Regulators
Washington Update
Summaries of the latest from Washington and the
courts—what’s coming, what’s contemplated and what’s critical for plan
The Internal Revenue Service (IRS) released the
“Quick Reference Guide for Public Employers.” This guide is produced annually
by the IRS office of Federal, State and Local Governments (FSLG). It aims to
provide a brief introduction to basic federal employment tax and reporting
information issues for governmental employers.
No Harm Required to Seek Plan Reformation
A federal appeals court has found a retirement
plan participant need not show “harm” to pursue a remedy of plan reformation
for failing to disclose information. The appellate court noted that in CIGNA Corp. v. Amara, the Supreme Court held that, with respect to
the equitable remedies under Employee Retirement Income Security Act (ERISA) § 502(a)(3), “any requirement of harm must come
from the law of equity.”  To obtain
contract reformation, equity does not demand a showing of actual harm. The 2nd U.S. Circuit
Court of Appeals agreed to take up the case on appeal from plaintiff Geoffrey
Osberg who claimed his employer, Foot Locker, issued false and misleading
summary plan descriptions (SPDs) in violation of ERISA disclosure requirements.
Sponsored message from PLANSPONSOR
Plan Sponsors of the Year – Public Defined Contribution
Finalists include
State of Tennessee, State of Michigan, Office of Retirement Services, and City
of Austin Deferred Compensation Program. Winners in each category will be
announced in February and recognized at the Awards for Excellence dinner. View
other categories.
Small Talk
1862, the U.S. Congress passed the
Legal Tender Act, authorizing the use of paper notes to pay the government’s
bills. This ended the long-standing policy of using only gold or silver in
transactions, and it allowed the government to finance the enormously costly
Civil War long after its gold and silver reserves were depleted. In 1870, Hiram Rhoades Revels, a
Republican from Natchez, Mississippi, was sworn into the U.S. Senate, becoming
the first African American ever to sit in Congress. In 1938, the city of Miami opened its first drive-in movie theater. In
1964, 22-year-old Cassius Clay (who later became known as Muhammad Ali) shocked the odds-makers by dethroning world
heavyweight boxing champ Sonny Liston in a seventh-round technical knockout.   TUESDAY
 In its original incarnation, Play-Doh was
off-white and came in 1½ lb. cans. However, in less than a year it was
available in three colors (red, yellow and blue) which were vended in a 3-pack
of 7 oz. cans.
was the original use for Play-Doh?
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News from   Copyright © Asset International, Inc.,
2014. All
rights reserved.  No reproduction without
prior authorization.
PLANSPONSOR’s 2014 Plan Sponsor of the Year Winner
Finalists for our 2014 Plan Sponsor of the Year
Award in the Public Defined Contribution category are City of Austin Deferred
Compensation Program (Austin, Texas); State of Michigan, Office of Retirement
Services (Dimondale, Michigan); and State of Tennessee (Nashville, Tennessee).
And, the winner is…
Sidecar Savings Accounts Create Current and Future Financial Security
Avoid Pitfalls to Properly Replacing DC Plan Investments
What Safe Harbors Are Available to Retirement Plan Sponsors?
(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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