Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 15th, 2015
Benefits & Administration
More Employers Offering Overall Financial Help
Employers are expanding their focus on the overall financial well-being of their workers, a survey from Aon Hewitt finds. According to the survey of nearly 250 U.S. employers representing approximately six million employees, 93% intend to focus on the overall financial well-being of their employees, beyond retirement readiness. Nearly half (46%) are very likely and another 47% are somewhat likely to add new plan features, mobile applications or online tools to assist individuals with understanding financial concepts and financial planning.Read more >
Hispanics are more invested in their financial future compared to the general population, with 61% leaving the well-being of their finances up to chance, versus 65% of the general population. A survey from Massachusetts Mutual Life Insurance Company revealed that 42% of Hispanics are likely to carefully research and plan every detail of their retirement, and 38% are likely to work at their retirement plan until they believe it is perfect.Read more >
Employers Continue Health Benefit Cost-Saving Tactics
United Benefit Advisors (UBA) reveals industry trends among employer-sponsored health plans in the 2014 UBA Health Plan Survey of nearly 10,000 employers. According to UBA, among the most striking trends revealed by the survey, employers have overwhelmingly opted for early renewals of their plans—a tactic that helped them delay adopting new Patient Protection and Affordable Care Act (ACA)-compliant plan designs for which insurance companies charge more. Premium renewal rates increased an average of 5.6% for all plans—up very slightly from last year’s 5.5% increase. This can be attributed to a nearly 322% increase in the number of plans utilizing an early renewal strategy, UBA says.Read more >
Re-enrollment Keeps Micro Retirement Plans Ongoing
Andrew Meadows, consumer and brand ambassador at Ubiquity Retirement + Savings (formerly The Online 401k), tells PLANSPONSOR that regular re-enrollments can be a lifeline for small business retirement plans. Ubiquity’s average plan client has just 12 participants, Meadows notes, calling the small and micro plan segment “our bread and butter.” He says, “Being in the small and micro plan environment, we’re actually at risk of losing clients, whole plans at a time, if enough of the employees don’t decide to participate. If a small business plan is only benefiting a small group of employees out of a small workforce, you can bet the owners are going to question the cost of administering the plan.”Read more >
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Products, Deals & People
PNC Offers ‘Zero Revenue’ Mutual Fund Platform
PNC Retirement Solutions expects its new zero revenue mutual fund platform for defined contribution retirement plans will help produce lower expense ratios and improved investing outcomes for participants. As explained by PNC, the platform is built around mutual fund share classes with zero revenue sharing. The company says this approach offers better flexibility to plan sponsors, providing additional options for paying plan fees.Read more >
Economic Events

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for November, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,345.8 billion, down 0.2% from October 2014, but up 2.2% from November 2013.

Advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.9 billion, a decrease of 0.9% from the previous month, but up 3.2% from December 2013. Total sales for the 12 months of 2014 were up 4.0% from 2013. Retail trade sales were down 1.1% from November, but 2.6% above last year. Auto and other motor vehicle dealers were up 9.8% from December 2013 and food services and drinking places were up 8.2% from last year.

Market Mirror

The Federal Reserve released its Beige Book Wednesday, which revealed concern about consumer spending and oil prices. The Dow fell 186.59 points (1.06%) to 17,427.09, the NASDAQ decreased 22.18 points (0.48%) to 4,639.32, and the S&P 500 lost 11.77 points (0.58%) to finish at 2,011.26. The Russell 2000 was down 3.59 points (0.30%) at 1,177.04, and the Wilshire 5000 closed 115.61 points (0.54%) lower at 21,164.95.

On the NYSE, 3.2 billion shares traded, with 1.5 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares changed hands, with a 1.8 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note was up 16/32, bringing its yield down to 1.846%. The price of the 30-year Treasury bond increased 28/32, decreasing its yield to 2.463%.

Compliance
Tim Bishop, a partner with Mayer Brown LLP, filed an amicus brief on behalf of the International Municipal Lawyers Association in support of the State of Illinois in its appeal of a circuit court decision that struck down the legislature’s attempt to reform the state’s public pensions. “A State’s government may not stand at the sidelines while a fiscal disaster of this dimension plays out, trusting to luck that some economic miracle will come along and save the day. Government has an obligation to all the State’s citizens—and to the United States of which it is an integral part—to use its police powers to avoid impending disaster. That is just what the General Assembly did when it passed the Pension Reform Law,” Bishop wrote.Read more >
From the Magazine
Barry’s Pickings: Updated Mortality Tables
On October 27, 2014, the Society of Actuaries (SOA) released updated mortality tables, reflecting significantly increased longevity. The headline claimed defined benefit (DB) liability valuations will increase significantly—by 4% to 8%. On October 30, the Government Accountability Office (GAO) revealed the interest rates used to value pension liabilities for U.S. multiemployer and state and municipal systems are fully 200 basis points (bps) higher than those used anywhere else.Read more >
Small Talk
ON THIS DATE: In 1870, the first recorded use of a donkey to represent the Democratic Party appeared in Harper’s Weekly. In 1929, Martin Luther King Jr. was born in Atlanta, Georgia. In 1967, at the Los Angeles Coliseum, the Green Bay Packers beat the Kansas City Chiefs in the first-ever Super Bowl. In 1972, “American Pie,” an epic poem in musical form, hit  No. 1 on the Billboard charts. In 1974, “Happy Days” premiered on ABC-TV. In 1986, U.S. President Ronald Reagan signed legislation making Martin Luther King, Jr.’s birthday a national holiday, to be celebrated on the third Monday of January. In 2009, a potential disaster turned into a heroic display of skill and composure when Captain Chesley Burnett Sullenberger III safely landed the plane he was piloting on New York City’s Hudson River after a bird strike caused its engines to fail.
SURVEY SAYS: This weekend, the results of the AFC and NFC championship games will reveal who will compete in Super Bowl XLIX. Competing for the AFC title are the Indianapolis Colts and the New England Patriots. Competing for the NFC title are the Green Bay Packers and the Seattle Seahawks. This week, I’d like to know, which team would you most like to see compete in the Super Bowl? You may respond to this week’s survey by 6 p.m .Pacific time today.Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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