Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 12th, 2015
Benefits & Administration
House Votes to Change ACA Definition of Full-Time Worker
The U.S. House of Representatives is trying to ease employer mandate requirements of the Patient Protection and Affordable Care Act’s (ACA). The House has approved a measure that would change the ACA’s definition of full-time worker.Read more >
Sponsored message from Vanguard
Vanguard’s Economic & Investment Outlook
According to Vanguard’s newly released Economic and Investment Outlook, the U.S. economy will likely remain resilient with anticipated growth above trend in the new term,but it won’t be immune to the recessionary and deflationary risks.Read more >
Products, Deals & People
A New Tool for Educating and Engaging Participants
Plan sponsors and participants alike report dissatisfaction with the way the retirement plan industry educates and communicates, according to Laurie Rowley, president of National Association of Retirement Plan Participants (NARPP). “Part of the problem with [participant] engagement centers on the undeniable fact that the materials people are interacting with are complicated, confusing and disempowering,” she says. Addressing issues in retirement savings is complex, and can no longer rest in the hands of service providers alone, she contends. “Change requires collaboration, innovation, and action. If communications materials are not engaging people, you have to throw out the old model and come up with something new.”Read more >
Miller & Chevalier, a Washington, D.C., law firm representing insurance companies, large employers, self-funded employee benefits plans, and Employee Retirement Income Security Act (ERISA) plan participants, announced the hire of Erin M. Sweeney to join the firm’s ERISA & Fiduciary Litigation Practice. Sweeney counsels clients about executive compensation, health care reform, and employee benefit plan matters.Read more >
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Industry Voices
Industry Voice: Time for an Alternative Alternative
Given the performance challenge facing hedge funds due to efficiency at the micro level, not to mention a fee structure that few managers can justify, many defined benefit plan sponsors are increasingly seeking alternatives to hedge funds.Read more >
Economic Events

Total nonfarm payroll employment rose by 252,000 in December, and the unemployment rate declined to 5.6%, according to the Bureau of Labor Statistics. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing.

The U.S. Census Bureau announced that November sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $452.2 billion, down 0.3% from the revised October level, but were up 2.4% from the November 2013 level. The October preliminary estimate was revised downward $1.0 billion or 0.2%. November sales of durable goods were up 0.2% from last month and were up 6.3% from a year ago. Sales of nondurable goods were down 0.8% from October and were down 0.8% from last November.

THE ECONOMIC WEEK AHEAD: Wednesday, the Census Bureau will report about retail sales for December and business inventories for November. Thursday, the Labor Department will issue its initial claims report, and the Bureau of Labor Statistics will reveal the producer price index for December. Friday, we’ll learn the consumer price index for December from the Bureau of Labor Statistics.

Market Mirror

Friday, the Dow fell 170.50 points (0.95%) to 17,737.37, the NASDAQ was down 32.12 points (0.68%) at 4,704.07, and the S&P 500 closed 17.30 points (0.84%) lower at 2,044.84. The Russell 2000 lost 10.45 points (0.87%) to finish at 1,185.68, and the Wilshire 5000 decreased 175.27 points (0.81%) to 21,497.12.

On the NYSE, 3.2 billion shares changed hands, with 1.7 declining issues for every advancing issue. On the NASDAQ, 2.7 billion shares traded, with a near 2 to 1 lead for decliners.

The price of the 10-year Treasury note was up 17/32, bringing its yield down to 1.961%. The price of the 30-year Treasury bond increased 1 12/32, decreasing its yield to 2.538%.

WEEK’S WORTH: For the week ending January 9, the Dow decreased 0.54%, the NASDAQ closed 0.65% lower, and the S&P 500 was down 0.48%. The Russell 2000 fell 1.09%, and the Wilshire 5000 lost 0.78%.

Compliance
Possible Meaning of Lower DOL Enforcement Results
The dollar amount secured by the Department of Labor’s (DOL) Employee Benefit Security Administration dropped substantially in 2014 compared with the previous year, despite a higher number of cases closed and a similar number of violations found. The major year-over-year drop has left some in the retirement plan compliance industry scratching their heads.Read more >
An Internal Revenue Service announcement provides for automatic approval of a change in funding method with respect to a single-employer defined benefit plan under certain circumstances in which the change in method results from a change in the plan’s enrolled actuary. The current announcement expands upon the automatic approval conditions under previous regulations. It lays out four conditions for a plan to have automatic approval of a change in funding method.Read more >
From the Magazine
Ideas to Keep Participants from Withdrawing Assets
The goal of a workplace-based retirement plan is to have plan participants accumulate enough assets for retirement. However, through loans or hardship withdrawal provisions, money can be taken out of the plan before participants reach retirement age. Why even offer these provisions?Read more >
Small Talk
ON THIS DATE: In 1904, Henry Ford set a land-speed record of 91.37 mph on the frozen surface of Michigan’s Lake St. Clair. In 1915, the U.S. Congress established the Rocky Mountain National Park. In 1926, the two-man comedy series “Sam ‘n’ Henry” debuted on Chicago’s WGN radio station. Later changing its name to “Amos ‘n’ Andy,” the show became one of the most popular radio programs in American history. In 1932, Ophelia Wyatt Caraway, a Democrat from Arkansas, became the first woman to be elected to the U.S. Senate. In 1966, “Batman” debuted on ABC-TV. In 1971, “All In the Family” debuted on CBS-TV.
SURVEY SAYS: Best and Worst Holiday Gifts Last week, I asked NewsDash readers, “What is the best holiday gift you received in 2014, and what is the worst?” I was pleasantly surprised to see that electronics did not dominate the list of best gifts this year. As a matter of fact, less than a handful of responding readers mentioned an electronic item. The theme around this year’s best gifts was family—time with family, family news, trips, handmade gifts or gifts that represent family or family memories. Other items on the “best” list included watches, gift cards, socks, electric blankets, a coffee thermos and a customized t-shirt, among others. However, some of these “best” gifts were also listed by some responding readers as “worst” gifts. Many respondents said none of their gifts were bad, and several listed being sick as their worst gift. In verbatim comments there was also a theme—that the holidays should be less about gifts and more about spending time with family and friends. Some offered suggestions for choosing the right, thoughtful gift. Editor’s Choice goes to the reader who said: “Can we stop between adults? It’s not fun ’cause it’s tons of work and no one wants to do it! I’d rather my friends spend time with me, which they never seem to have available! Let’s go out for a nice dinner & conversation instead!” Thank you to everyone who participated in our survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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