Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 16th, 2015
Benefits & Administration
A New Landscape of TDFs in Retirement Plans
According to the 2015 Defined Contribution (DC) Trends Survey by the Callan Investments Institute, about one in 10 plan sponsors replaced their target-date fund/balanced fund manager in 2014, and the proportion of plans that offer their recordkeeper’s proprietary TDF declined precipitously, from 47.5% in 2013, to 28.7% in 2014. Plan sponsors expect this number will decrease even further in 2015 (to 23.6%). Lori Lucas, executive vice president and Defined Contribution Practice leader at Callan Associates in Chicago, said the change in the TDF landscape was what stood out to her in the survey findings. “I was not surprised by the change away from recordkeeper’s proprietary funds, but was surprised by how many DC plans are using custom target-date funds,” she tells PLANSPONSOR.Read more >
2015 Advisers' Choice Award Winners
PLANADVISER announced the winners of the second annual Advisers’ Choice Awards, to be handed out at its annual PLANSPONSOR/PLANADVISER Awards for Excellence dinner, to be held March 31 at Pier 60 of the Chelsea Piers in New York City. Nine firms will be honored for their high-ranking performance in four of distinct categories, taken from the eighth annual PLANADVISER Retirement Plan Adviser Survey. More than 600 retirement plan advisers participated in the survey and entered their preferred fund families, investment firms and defined contribution (DC) providers, as well as the mutual funds they most often recommended to their defined contribution plan clients.Read more >
Former California Public Employees Retirement System (CalPERS) Board member Alfred R. Villalobos has died just a month before he was to go on trial for a bribery and fraud scheme relating to pension fund investments. Police said they received a call from a Nevada gun club that there was “a possible suicidal person” there, and when they arrived, they found Villalobos dead from a gunshot wound, according to the Associated Press. Police are investigating, but said it was “apparently self-inflicted.” However, Villalobos’ attorney, Bruce Funk, maintained that Villalobos’ death was connected to his “protracted and painful illness,” not the upcoming trial.Read more >
MOST READ ARTICLES
1
What Participants Want From Employers’ Retirement Plan Websites
2
2021 Recordkeeping Survey
3
DOL’s Next Moves
4
Allowing for After-Tax Contributions in a 401(a) Plan
5
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
Little Plan Sponsor Reaction to Dudenhoeffer Decision
Following a U.S. Supreme Court decision that fiduciaries of employee stock ownership plans (ESOPs) are not entitled to any special presumption of prudence under the Employee Retirement Income Security Act (ERISA), 72.7% of defined contribution (DC) plan sponsors that offer company stock indicated they anticipate no changes to their offerings this year. According to the 2015 Defined Contribution (DC) Trends Survey by the Callan Investments Institute, 9.1% said they are waiting to make a decision pending the outcome of ongoing stock drop lawsuits. Lori Lucas, executive vice president and defined contribution practice leader at Callan Associates in Chicago, tells PLANSPONSOR she expected the number of plan sponsors taking a “wait-and-see” approach to be higher.Read more >
Economic Events

The Producer Price Index for final demand fell 0.3% in December, the Bureau of Labor Statistics announced. Final demand prices decreased 0.2% in November and advanced 0.2% in October. In December, the index for final demand goods dropped 1.2% and prices for final demand services moved up 0.2%.

In the week ending January 10, the advance figure for seasonally adjusted initial claims for unemployment insurance was 316,000, an increase of 19,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 298,000, an increase of 6,750 from the previous week’s revised average.

The average interest rate for a 30-year fixed-rate mortgage is 3.87%, up from 3.83% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.15%, up from 3.10%.

Market Mirror

Disappointing earnings from large banks, mixed economic data and a move by the Swiss National Bank to ditch its currency ceiling and implement a rate cut, pushed stock indices lower Thursday. The Dow was down 106.38 points (0.61%) at 17,320.71, the NASDAQ lost 68.50 points (1.48%) to finish at 4,570.82, and the S&P 500 decreased 18.60 points (0.92%) to 1,992.67. The Russell 2000 fell 22.35 points (1.90%) to 1,154.71, and the Wilshire 5000 closed 211.61 points (1.00%) lower at 20,953.34.

On the NYSE, 3.2 billion shares traded, with 1.8 declining issues for every advancing issue. On the NASDAQ, 2.7 billion shares changed hands, with a near 4 to 1 lead for decliners.

The price of the 10-year Treasury note increased 1 4/32, with its yield falling to 1.735%. The price of the 30-year Treasury bond jumped up 2 11/32, with its yield dropping to 2.368%.

Compliance
Supreme Court Declines Withdrawal Liability Case
An updated docket sheet on the U.S. Supreme Court website shows the top court has denied a review petition from defendants in Central States, Southeast and Southwest Areas Pension Fund and Arthur H. Bunte, Jr., Trustee, vs. CLP Venture LLC, et al. Court documents show the case, relating to the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), arose from questions about whether various co-defendants that are commonly owned but organizationally distinct can be made jointly and severally liable for a multiemployer pension plan withdrawal liability “indisputably incurred” by one of the defendants.Read more >
The Securities and Exchange Commission (SEC) adopted several sets of rules and proposed others related to data collection and reporting for security-based swap data repositories. The new rules change the way transaction information is collected and disseminated by security-based swap data repositories, or SDRs. The adopted rules require most SDRs to register with the SEC.Read more >
Investing
Investing Considerations for Nonprofit Health Systems
Consulting firm Mercer has released a list of ten investment priorities for not-for-profit health care organizations. Many not-for-profit health systems are currently engaged in or considering strategic actions such as a merger, acquisition, operating agreement, or joint venture, notes Michael Ancell, senior consultant and national segment leader for health care investments at Mercer in St. Louis, Missouri. He explains to PLANSPONSOR that during such actions, organizations prioritize projects, and the number one priority is patient care and getting operations configured. Because of this, organizations often put off decisions about consolidation of retirement plans. However, strategic actions among not-for-profit health care organizations have been going on for years, and many are now facing retirement plan issues, Ancell says.Read more >
Small Talk

ON THIS DATE: In 1547, Ivan the Terrible was crowned Czar of Russia. In 1866, Everett Barney patented the metal screw, clamp skate. In 1919, the 18th Amendment to the U.S. Constitution, prohibiting the “manufacture, sale, or transportation of intoxicating liquors for beverage purposes,” was ratified. In 1991, Operation Desert Storm, the code-name for the U.S.-led offensive against Iraq, began. In 2002, the U.N. Security Council unanimously adopted sanctions against Osa.ma bin La.den, his ter.ror network and the remnants of the Tali.ban. The sanctions required that all nations impose arms embargoes and freeze their finances. In 2013, Pauline Phillips, who for more than 40 years wrote the “Dear Abby” newspaper advice column, died at age 94 in Minneapolis after battling Alzheimer’s disease.

 

And now it’s time for FRIDAY FILES!

How to fold a fitted sheet.Read more >
One Swedish town has a very unusual way to say “yes.”Read more >

In Macedon, New York, police spotted a woman driving erratically around a Walmart parking lot. The 46-year-old told officers she had gotten lost on the way home. Suspecting she was drunk, an officer subjected the woman to a breat.halyzer test. She registered a 0.26. However, she hadn’t been drinking your usual alc.oholic beverages—she had been drinking vanilla extract, which contained 41% alc.ohol. She was arrested and charged with driving while into.xicated.

In Spokane Valley, Washington, two men carrying large garbage bags over their shoulders while walking were stopped by police. The bags contained frozen lamb chops. The men said a woman gave them the food because she was moving, but police followed their footprints in the snow to a home that had been broken into. The resident said the lamb chops were stolen from her freezer. The men were charged with burglary and theft.

In Cleveland, Ohio, a man boarded a long-delayed flight to New York to find that every other passenger had been rebooked on another flight. According to CNN, he chose an aisle seat near the front of the plane and stretched out. He got a flight attendant to snap pictures of him, with rows of empty seats in the background, and tweeted it. However, the man ended up only getting a semi-private jet; the plane was about to push back when, at the last minute, another man hopped on.

Unbelievable shot at Jazz vs. Thunder NBA game.Read more >

In Coon Rapids, Minnesota, a 60-year-old man called police and reported there might be dead bodies in his house. When officers responded, the man opened the door wielding a large Samurai sword, a 12-inch knife and a long wooden stick with a spear fastened to it. KSTP-TV reports the man eventually put down the weapons and police searched his home. They didn’t find dead bodies, but did find nearly 16 grams of metha.mphetamine.

In Los Angeles, California, police officers approached and questioned two men sitting in a SUV at Venice Beach. When one of the men is asked to step out of the car, a passenger in the back appears to crack saying, “I can’t do this I can’t do this, we have a bunch of coke in the back…it’s not ours we were just bringing it to a friend,” NBC News reports. The officers asked the men to step out of the car and handcuffed them. A search of the trunk, however, turned up numerous sodas covered by a blanket. Commander Andrew Smith of the LAPD was less than impressed. “It is dangerous for the participants involved and a huge waste of a police officer’s time. The public has a right to have their police officers working and not wasting their time responding to juvenile pranks.” The SUV was equipped with cameras on the Dash and in the trunk, and the two men posted the prank on Youtube.

In Largo, Florida, WFTS reported that new rugs ordered for the sheriff’s administration building say “In Dog We Trust” instead of “In God We Trust.” The real kicker is the forest green rugs with the sheriff’s yellow badge were in the entrance area for a couple of months before the error was discovered.

In Kissimmee, Florida, a police officer sought to pull over a gold Acura after the vehicle nearly slammed into his cruiser. The officer activated his car’s overhead lights, but the Acura continued moving. According to The Smoking Gun the officer said that while shining a spotlight on the Acura, “I saw the sun roof of the vehicle open.” Breuer slowed his car down feeling the passenger was going to throw something out of the vehicle. Breuer then watched as the vehicle’s passenger stuck his right hand out of the sunroof. A clear bag come out of the sun roof, flew into the air… and landed on the hood of the police officers car. The bag contained coc.aine. The men finally pulled over and were arrested.

Have a wonderful, extended (for some) weekend, everyone! We are closed Monday, but NewsDash will be back in your inbox Tuesday.
Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more >

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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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