Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 25th, 2015
Second Opinions
Applying the Employer Mandate Look-Back Rules
Experts from Groom Law Group answer questions about Internal Revenue Service (IRS) guidance about applying the Patient Protection and Affordable Care Act (ACA) employer mandate look-back rules.Read more >
Benefits & Administration
Well-Funded Public Pensions Share Common Traits
Well-funded public pension systems in the U.S. share a number of common practices, according to a new research paper from the Center for State and Local Government Excellence. The center examined four public pension systems with a long tradition of being well-funded—Delaware Public Employees’ Retirement System, Illinois Municipal Retirement Fund, Iowa Public Employees’ Retirement System and North Carolina Retirement Systems—to determine what they have in common.  According to a report from the center, the systems have all lowered their annual investment assumption to 7.5% or less in recent years, and have adjusted employer and employee contributions as needed to meet funding requirements.Read more >
Factors Still Ripe for Choosing Pension Risk
Mercer has seen that roughly half of defined benefit (DB) plans considering risk transfer have done a lump-sum window for terminated, vested participants in the last two years or have one underway for 2015, according to Matt McDaniel, principal and business leader for Mercer’s Philadelphia-based retirement practice. The trend now is annuity buyouts for retirees, he told attendees of a Mercer webcast. Lump-sum economics are different from buyout economics, McDaniel notes, and the reason some plan sponsors are considering lump sums in 2015 is that, if they look ahead, the situation could get worse.Read more >
Sponsored message from AICPA
How Confident Are You in Your ERISA Compliance Procedures? The AICPA Employee Benefit Plans Conference features certified public accountants (CPAs) who specialize and government representatives who correct plan failures. Get updates on class action cases and procedures to suit your needs. Read more >
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
2022 Recordkeeping Survey
Maximum Benefit and Contribution Limits Table 2023
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
TRIVIAL PURSUITS: Meaning and Origin of the Idiom “Watershed Moment?”
Ask the Experts
Recordkeepers Not Meeting Statement Requirements
“We sponsor an Employee Retirement Income Security Act (ERISA) 403(b) plan with four different recordkeepers. Two of the vendors include vested benefit information, as required, on their participant statements, while two are unable to do so. What is the consequence of this failure on the part of two of our recordkeepers? Must we as a plan sponsor furnish such information separately?”Read more >
Economic Events
The Conference Board Consumer Confidence Index, which had increased in January, declined in February. The Index now stands at 96.4 (1985=100), down from 103.8 in January. The Present Situation Index decreased to 110.2 from 113.9, while the Expectations Index declined to 87.2 from 97.0 in January.
Market Mirror

The Dow climbed 92.35 points (0.51%) Tuesday to 18,209.19, the NASDAQ was up 7.15 points (0.14%) at 4,968.12, and the S&P 500 gained 5.86 points (0.28%) to finish at 2,115.51. The Russell 2000 increased 2.14 points (0.17%) to 1,233.97, and the Wilshire 5000 closed 48.63 points (0.22% ) higher at 22,308.64.


On the NYSE, 3.2 billion shares traded, with 1.6 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares changed hands, with a 1.3 to 1 ratio of advancers to decliners.


The price of the 10-year Treasury note was up 22/32, bringing its yield down to 1.983%. The price of the 30-year Treasury bond increased 1 13/32, decreasing its yield to 2.590%.

A Superior Court judge in New Jersey concluded that New Jersey’s failure to make contributions into its pension systems was a substantial impairment of public employees’ constitutionally protected contract rights. The court ordered the state to pay approximately $1.57 billion to the pension funds, which was previously approved in a fiscal year 2015 budget by the legislature, but removed by Governor Chris Christie.Read more >
The Department of Labor (DOL) still says its pending fiduciary rule proposal, though subject to change, will not prohibit common advisory compensation practices, such as commissions and revenue sharing. As noted in a recently published FAQ section on the department’s website, the new fiduciary rule will include proposed exemptions from the Employee Retirement Income Security Act (ERISA)’s and the Internal Revenue Code (IRC)’s restrictions on financial fiduciaries receiving conflicted compensation, and the agency will request public input on the final design of the exemptions. The exact shape of the new fiduciary rule and any accompanying exemptions remains unknown, with the proposed rule language reportedly under preliminary review by the Office of Management and Budget (OMB).Read more >
Investment Fees Dip for 401(k) Plans
The 15th edition of the 401k Averages Book suggests 2014 was yet another year of falling fees for 401(k) retirement plans of all sizes. The report reveals a year-over-year decline for eight of the nine investment categories tracked for small retirement plans, with large U.S. equity fees declining from 1.40% to 1.38% and target-date funds (TDFs) dropping from 1.35% to 1.32%. For large retirement plans, 2014 fee averages declined from 1.05% to 1.03% for large U.S. equity and from 0.98% to 0.96% for target-date funds.Read more >
Small Talk
ON THIS DATE: In 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 1901, the United States Steel Corp. was incorporated by J.P. Morgan. In 1913, the 16th Amendment to the U.S. Constitution was ratified. It authorized a graduated income tax. 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.
WEDNESDAY WISDOM: “To find joy in work is to discover the fountain of youth.” —Pearl S. Buck, American writer
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Copyright © Asset International, Inc., 2015.

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Editorial: Alison Cooke Mintzer


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