Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 21st, 2015
Benefits & Administration
Debt Stands in the Way of Retirement Readiness
Eighty-one percent of working age people surveyed by HSBC Bank said saving for retirement is not their main priority. Other priorities included paying off debts (24%), saving for children’s education (8%), and saving for a rainy day (8%) or a vacation (6%). The survey found major life events have affected the retirement saving of more than three quarters (76%) of pre-retirees.Read more >
A strong majority of U.S. households—including those with and those without retirement plan accounts—disagree with proposals to remove or reduce tax incentives for retirement savers using defined contribution (DC) accounts, according to new survey findings by the Investment Company Institute (ICI). Eighty-eight percent of households disagreed with the notion that the government should take away the tax advantages of DC accounts, and 90% disagreed with reducing the amount that individuals can contribute to DC accounts. These percentages are up from 86% and 83%, respectively, one year ago.Read more >
Ask the Experts
Going from No HCEs to Having HCEs
“I have worked with a small private tax-exempt that, since its inception many years ago, has had no concerns regarding nondiscrimination testing for its 403(b) plan, since it employed zero highly compensated employees (HCEs). However the organization is growing, and, given the most recent raise for the executive director, she is expected to exceed (barely) the HCE compensation threshold for 2015. Is there a transitional period to pass testing? The plan utilizes a non-safe harbor match that would likely fail ACP testing, I suspect that they would be reluctant to change a plan design that they have enjoyed for many years, for financial and other reasons.”Read more >
Sponsored message from Financial Engines
PLANSPONSOR interviews Christopher Jones, Chief Investment Officer at Financial Engines.Read more >
Recent TDF Performance Lawsuits Raise Insurer Ire
Microsoft Latest Target of Lawsuits Over TDF Suite
Deals and People
Retirement Industry People Moves
Market Mirror

Tuesday, the Dow ticked up 3.66 points (0.02%) to 17,515.23, the NASDAQ increased 20.46 points (0.44%) to 4,654.85, and the S&P 500 closed 3.13 points (0.15%) higher at 2,022.55. The Russell 2000 fell 6.40 points (0.54%) to 1,170.25, and the Wilshire 5000 was up 13.46 points (0.06%) at 21,258.14.


On the NYSE, 3.2 billion shares changed hands, with a 1.6 to 1 ratio of decliners to advancers. On the NASDAQ, 2.8 billion shares traded, with 1.4 declining issues for every advancing issue.


The price of the 10-year Treasury note was up 14/32, decreasing its yield to 1.793%. The price of the 30-year Treasury bond increased 1 24/32, bringing its yield down to 2.378%.

DOL Challenges Investment Adviser on Fees
The Department of Labor (DOL) says the Roger Ramsay and Compensation Planning Corp. of Rochester Inc. collected fees that were not properly disclosed or authorized, according to an Employee Benefits Security Administration (EBSA) investigation. A statement from the DOL says Roger Ramsay provided investment advisory services as a fiduciary to any least nine employee benefit plans covered under the Employee Retirement Income Security Act (ERISA). Ramsay provided the services through SAR Services, Inc. a company he owned and operated, and he was also the sole owner and president of Compensation Planning Corp. of Rochester Inc., a third-party administrator (TPA) to the plans.Read more >
Congressional Action Could Follow Fiduciary Rule
Leading a conference call with reporters, Lee Covington, senior vice president and general counsel for the Insured Retirement Institute (IRI), said there is a lot of common ground between investment industry practitioners and federal regulators heading into 2015. Both camps have a stated focus on solving retirement issues, Covington said, especially in the areas of improving access to lifetime income guarantees through tax-qualified retirement plans and continuing the uptake of automatic plan enrollment and deferral escalation features codified by the Pension Protection Act (PPA).Read more >
From the Magazine
408(b)(2) Enforcement Has Arrived
When a plan sponsor recently received a notice announcing a Department of Labor (DOL) investigation of its plan, it was clear, based on the request for documents, that the investigator planned to look at 408(b)(2) compliance. As background, the 408(b)(2) regulation requires that service providers make disclosures about services, compensation and fiduciary status. That’s the starting point. The law then requires that the fiduciaries evaluate those disclosures and determine whether the compensation is reasonable in light of the services.Read more >
Small Talk
Nearly half (48%) of employed Americans say they are distracted by fatigue at work, causing them to make mistakes and even doze off, according to a survey commissioned by Red Bull and human capital solutions firm Glassdoor. Employees say tiredness is a bigger distraction to them than social media (19%) and personal communications (35%). Employees surveyed cited a number of mistakes they make at the workplace due to being tired.Read more >
ON THIS DATE: In 1954, the Nautilus was launched in Groton, Connecticut. It was the first atomic-powered submarine. U.S. First Lady Mamie Eisenhower broke the traditional bottle of champagne across the bow. In 1954, the gas turbine automobile was introduced in New York City. In 1957, country music legend Patsy Cline first gained national attention with her winning appearance on Arthur Godfrey’s Talent Scouts. In 1959, Carl Dean Switzer, the actor who as a child played “Alfalfa” in the Our Gang comedy series, died at age 31 in a fight, allegedly about money, in a Mission Hills, California, home. In 1970, the Boeing 747 made its first commercial flight from New York to London for Pan American. In 1977, U.S. President Jimmy Carter granted an unconditional pardon to hundreds of thousands of men who evaded the draft during the Vietnam War. In 1990, at the Australian Open in Melbourne, American tennis player John McEnroe was disqualified for misconduct.
WEDNESDAY WISDOM: “Error is acceptable as long as we are young, but one must not drag it along into old age.” —Johann Wolfgang Von Goethe, German writer
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Copyright © Asset International, Inc., 2015.

All rights reserved.  No reproduction without prior authorization.

Editorial: Alison Cooke Mintzer


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