| | Industry Insights | | Evaluating In-Plan Guaranteed Income Alternatives | | Plan sponsors need to pay careful attention to
their participant’s unique challenges and other sources of retirement income
when weighing the benefits and shortcomings of in-plan guaranteed income
alternatives, says Jerry
Huggins, CFP, MBA, vice president at Innovest Portfolio Solutions. No single
income alternative protects against all of the risks that participants may
encounter and certain features accommodating certain risks may not be
appropriate and/or may prove to be a problem for a participant in the future. | | | Benefit Briefs | | Employer Strategies for Implementing Health Care Reform | | Consulting firm Mercer has released a list of
recommended strategies to help employers navigate the complexities of the
health care reform law and fulfill its requirements. The five key topics
discussed in the list include avoiding the Patient Protection and Affordable
Care Act (ACA) excise tax, rethinking dependent coverage strategies,
classifying part-time and variable-hour employees, next generation wellness
strategies and consideration of private exchanges. | | While many older employees say they are delaying
retirement, the delay rate is lower than in previous years, says a new survey. According
to an annual survey from CareerBuilder, 58% of employees age 60 and older say
they will delay retirement in 2014. However, this figure is lower than 2013
(61%) and 2010 (66%). Survey results also show that 10% of employees in this
age group feel they will never be able to retire, which is relatively unchanged
from 2013 (11%). Half of this group (50%) believes they will be able to retire
within four years, compared with 47% in 2013. | | | Buyer's Market | | Rethinking the 4% Withdrawal Rule | | Financial professionals often suggest a 4%
annual withdrawal rate for retired workers living off accumulated assets, but
one service provider is pushing a more sophisticated approach. In a new study
called “Breaking the 4% Rule,” researchers from J.P. Morgan argue that
retirees—and the service providers supporting them—should take a more dynamic
approach to managing retirement account withdrawals. The study finds more
rigid, percentage-based withdrawal rules can expose retirees to an increased
chance of outliving their retirement assets or leaving too much wealth
untapped, mainly because these strategies ignore the specifics of a retiree’s
financial situation. | | Wells Fargo Retirement has named Betsy Hammond
as head of its Nashville-based retirement benefits consulting division. Hammond
will report to Joe Ready, director of Wells Fargo Institutional Retirement and
Trust. | | | Economic Events | | In the week
ending February 22, the advance figure for seasonally adjusted initial claims for
unemployment insurance was 348,000, an increase of 14,000 from the previous
week’s revised figure of 334,000, the Labor Department reported. The four-week
moving average was 338,250, unchanged from the previous week’s revised average.
New orders
for manufactured durable goods in January decreased $2.2 billion or 1.0% to
$225.0 billion, the U.S. Census Bureau announced. This decrease, down three of
the last four months, followed a 5.3% December
decrease. Excluding transportation, new orders increased 1.1%. Excluding
defense, new orders decreased 1.8%.
The average interest rate for a 30-year fixed-rate
mortgage is 4.37%, up from 4.33% one week ago, according to Freddie Mac. The average
interest rate for a 15-year fixed-rate mortgage is 3.39%, up from 3.35%.
| | | Market Mirror | | Thursday, the Dow was up 74.24 points
(0.46%) at 16,272.65, the NASDAQ increased 26.87 points (0.63%) to 4,318.93,
and the S&P 500 gained 9.13 points (0.49%) to finish at 1,854.29. The
Russell 2000 climbed 6.22 points (0.53%) to 1,187.94, and the Wilshire 5000
closed 98.24 points (0.50%) higher at 19,917.22.
On the NYSE, 3.2 billion shares traded,
with advancing issues outnumbering declining issues more than 2 to 1. On the
NASDAQ, 2.7 billion shares changed hands, with a near 2 to 1 lead for
advancers.
The yields for the 10-year Treasury note and 30-year
Treasury bond were 2.641% and 3.593%, respectively.
| | | Financial Sense | | The cost of purchasing pension buyout annuities
from an insurer remained level during January, at 108.5% of a plan’s accounting
liability, but the cost of maintaining the liability ticked up. According to
the Mercer U.S. Pension Buyout Index, the real cost of maintaining pension
liabilities increased from 108.6% to 108.7% of the balance sheet liability
during January. | | Brookings Gets Ball Rolling for Public Pension Policy Discussions | | During a discussion at The Brookings Institution
in Washington, D.C., speakers discussed a framework and political process for
pension reform policies. The Brown Center on Education Policy at Brookings will
release two papers that examine pension reform efforts across the nation and
provide actionable policy solutions aimed at those states still struggling with
underfunded pension systems. Patten Priestley Mahler, economics Ph.D. candidate
at the University of Virginia, told event attendees that “Improving Public
Pensions, Balancing Competing Priorities” offers a framework for evaluating
reforms and discusses a pension plan that meets these goals. “It’s not a silver
bullet, but it shows how workers’ and taxpayers’ competing interests can be
met,” she says. | | A new report, “The Multiemployer Defined Benefit
Pension Plan Landscape: A Ten-Year Look (2002-2011),” jointly released by the
International Foundation of Employee Benefit Plans and Horizon Actuarial
Services, LLC, reveals that multiemployer DB plans have a strongly positive
outlook as financial markets improve and plan trustees take steps to ensure
their plans remain viable. Multiemployer DB plans remained resilient despite an
unstable period between 2002 and 2011, according to the report. Due to the
volatility of the financial markets, most notably the market collapse in 2008,
many plans suffered sizable losses. Since that time, the markets have shown
significant recovery and resulted in the majority of multiemployer DB plans
becoming more stable. | | Changes in bond market conditions and
institutional portfolio strategies are driving the largest U.S. investors to
add more exchange-traded funds (ETFs)—especially those built on fixed-income
investments. The increased attention means fixed-income ETFs are poised to take
on a bigger role in institutional portfolios, according to a new report,
“Institutional Investors Turning to Fixed-Income ETFs in Evolving Bond Market,”
from financial research and consulting firm Greenwich Associates. | | | The Feeling’s Mutual | | Investors around the world contributed almost $1
trillion in net flows to investment funds during 2013, similar to levels
observed in the preceding year. Research from fund research firm Strategic
Insight (SI), an Asset International company, shows while the net flows into
investment funds remained essentially level during 2013, the allocations
changed dramatically in terms of the types of funds seeing the strongest
interest. | | | Rules & Regulators | | Industry Groups Raising Alarms About Tax Reform | | A U.S. Senate leader has introduced a sweeping
tax reform bill that has many in the retirement industry alarmed about its
proposals concerning retirement plans. While the 979-page document introduced
by U.S. House Ways and Means Committee Chairman Dave Camp (R-Michigan) does not
include taxation of retirement contribution amounts and benefits caps President
Obama suggested in earlier budget proposals, there are similar or new
provisions industry groups say will result in double taxation and discouraging
retirement plan benefit offerings. | | The Pension Benefit Guaranty Corporation’s (PBGC)
Open Government Web page hosts popular data sets like a list of pension plans
PBGC’s trusteed, as well as ones that it currently insures. The agency would like
to add even more information, and is asking users for help identifying
additional information it can provide. What PBGC data should PBGC make more
readily available? Which PBGC online service or data would you like to be
easier to use? Which PBGC service would you like to use on your mobile device?
Direct your feedback to Opengov@pbgc.gov. | | | Sponsored message from PLANSPONSOR | | PLANSPONSOR
Plan Sponsors of the Year – Corporate 401(k) – $50-$1B
Finalists include
Akin Gump Strauss Hauer & Feld LLP, American Woodmark Corporation, O.C.
Tanner Company, Range Resources Corporation and Vermeer Corporation. Winners in
each category will be announced in February and recognized at the Awards for
Excellence dinner. View other categories.
| | | Small Talk | | ON
THIS DATE: In
1784, John Wesley chartered the
first Methodist Church in the United States. In 1861, with the region’s population booming because of the Pike’s
Peak gold rush, Congress created the new Territory of Colorado. In 1953, Cambridge University scientists
James D. Watson and Frances H.C. Crick announced they had determined the
double-helix structure of DNA, the molecule containing human genes. In 1983, the celebrated sitcom M*A*S*H bowed
out after 11 seasons, airing a special two-and-a-half hour episode watched by
77% of the television viewing audience. It was the largest percentage ever to
watch a single TV show up to that time. In 1993,
agents from the Bureau of Alcohol, Tobacco and Firearms raided the Branch
Davidian cult compound in Waco, Texas, prompting a gun battle in which four
agents and six cult members are killed. The federal agents were attempting to
arrest the leader of the Branch Davidians, David Koresh, on information that
the religious sect was stockpiling weapons. A nearly two-month standoff ensued
after the unsuccessful raid. In 1994,
in the first military action in the 45-year history of the North Atlantic
Treaty Organization (NATO), U.S. fighter planes shot down four Serbian
warplanes engaged in a bombing mission in violation of Bosnia’s no-fly zone.
And now it’s time for FRIDAY FILES!
| | Love Girl Scouts cookies? There’s an app for
that. | | In Kansas
City, Missouri, after 19 rounds in a Missouri county’s annual spelling bee,
only two of the 25 contestants who started the competition remained. Several
hours and 47 rounds later, an 11-year-old and her 13-year-old adversary had
used up all of the available words, forcing organizers of the Jackson County
Spelling Bee to temporarily halt the showdown. The contestants buzzed through
the list of words provided by the Scripps National Spelling Bee, then they ran
through a list of about 20 additional words bee officials picked out of their
Merriam-Webster’s 11th Edition during the lunch break, The Kansas City Star reported. Officials decided not to pull more
words from the dictionary because they worried one speller might get a tough
word and the other a relatively easy one, which wouldn’t be fair. The contest
will resume March 8. | | Throwing out the trash is not always as easy as
it sounds. | | In Braintree,
Massachusetts, an 18-year-old driving up on an accident scene decided to
record the scene with his cellphone. As he was recording though, he smashed
into the rear of a vehicle himself—a police cruiser with an officer inside.
Other officers said they smelled mari.juana when they approached the vehicle.
The teenager was taken into custody. | | Russian filmmaker Vyacheslav Ivanov used an
ultra-high-speed camera to show what snowflakes look like as they form. | | In Arnold, Missouri,
Windsor high school’s female basketball team’s senior guard had a season-ending
knee injury before a big game with one of their top rivals. She has been a
starter for Windsor ever since she was a freshman, and this year, she was the
team captain. But, it was senior night at Windsor, and despite her injury, she
was put in the starting lineup. At the opening tip-off, a very cool coach for
the rival team told his team to stand down, while the Windsor team passed the
ball to their team captain so she could make her final layup.
In Stockholm, Sweden, job
seekers were pleased to get an e-mail invitation for a recruiting meeting at an
employment office. Until they arrived and saw that a crowd filled up the alley
containing the office and spilled out into adjacent streets in central
Stockholm. Apparently, the e-mail had accidentally been sent to a mailing list
of 61,000 people—all the registered job seekers in the city. Police had to be
called to calm the situation.
In Glasgow,
Scotland, a man entered a bookmakers shop armed with a “long
cylindrical object covered in a black sock” and went to the counter for
cash. A worker thought it may be a gun but refused to give him money. A police
detective also happened to be in the betting shop and when he heard the
commotion, he knocked the man to the ground with one blow. The black sock was
then taken off the “weapon” revealing it to be a cucumber. The man
initially told police it was “a joke” and said, “It was a dare.
It was a f****** cucumber. Am I getting the jail for this?”
Have a wonderful 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. | | News from PLANSPONSOR.com
Copyright © Asset International, Inc.,
2014.
All
rights reserved. No reproduction without
prior authorization.
|
|
 |
|
|
 | FEATURED |
| | PLANSPONSOR’s 2014 Plan Sponsor of the Year Winner | | Finalists for PLANSPONSOR’s 2014 Plan Sponsor of
the Year Award in the 403(b) category include Gilman School (Baltimore,
Maryland); Moffitt Cancer Center (Tampa, Florida); Texas Association of School
Boards Inc. (Austin, Texas); and Washington St. Board for Community &
Technical Colleges (Olympia, Washington). And, the winner is… |
|
| |
