Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 23rd, 2015
Benefits & Administration
Cost of Retirement Income Jumped in 2014
A sharp rise in lifetime income costs means many workers in their 50s and early 60s are less financially prepared for retirement than they were 12 months ago, despite 11% gains in equity markets over the same time period. Even a strong 14% return for the average 55-year-old retirement investor examined by BlackRock couldn’t keep pace with the relative increase in lifetime income costs.Read more >
PLANSPONSOR Research
2014 PLANSPONSOR DC Survey: Plan Benchmarking
The difference between price and value is a fundamental concept in finance and represents an important lesson for investors to learn. It may be great to find a $5 watch, but the deal is less compelling if the thing doesn’t tick. As managing principal at Retirement Benefits Group in Irvine, California, Gary Josephs is often called on to discuss how the price/value question applies to employer-sponsored benefits, especially in regard to defined contribution (DC) retirement plans. He says the retirement plan industry’s reinvigorated focus on fees has been a positive development overall for plan participants, leading to better prices and greater transparency. However, there is sometimes a tendency for plan sponsors to overlook the best value in search of the lowest price.Read more >
Products, Deals & People
A Financial Wellness Program with a Human Touch
Carolyn Schneider, senior vice president of human resources at Capella Healthcare in Franklin, Tennessee, is concerned about the prospects for retirement for Capella employees. A couple of years ago, Schneider was attending a women’s conference where Alexa von Tobel, CEO of LearnVest, a financial education provider based in New York City, was presenting. Schneider turned to Capella’s chief financial officer, who was also attending the conference, and said, “This is something we need for employees.” She says she felt LearnVest’s financial wellness program was not only a great product but a way for the organization to meet its fiduciary responsibilities to employees in a way that is cutting edge.Read more >
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TRIVIAL PURSUITS: How Many Verses Does The Star-Spangled Banner Have?
Pinnacle Plan Design says it has expanded into the New York market with the addition of Susan Feit as a consulting actuary. Feit will join the firm’s New York office and will be responsible for the design and administration of defined benefit (DB) and defined contribution (DC) retirement plans.Read more >
Industry Voices
Industry Voices: Multi-Asset Credit
The Pete Seeger song that became a hit during the 1960s in a cover version by The Byrds, “Turn! Turn! Turn! (to Everything There Is a Season),” may seem to have little relevance to the world of debt investment. But when it comes to the management of Multi-Asset Credit (MAC) portfolios, the underlying message holds true—there is a time to be in each asset class and a time to leave. With a MAC approach, plan sponsors and other institutional investors empower managers to create portfolios that seek to achieve an attractive total return by investing in all sectors of the fixed income market.Read more >
Economic Events

In the week ending January 17, the advance figure for seasonally adjusted initial claims for unemployment insurance was 307,000, a decrease of 10,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 306,500, an increase of 6,500 from the previous week’s revised average.

The average interest rate for a 30-year fixed-rate mortgage is 3.63%, down from 3.66% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 2.93%, down from 2.98%.

Market Mirror

The European Central Bank on Thursday launched its most aggressive effort to date to revive the region’s ailing economy, which sent major U.S. stock indices into positive territory. The Dow closed 259.70 points (1.48%) higher at 17,813.98, the NASDAQ jumped 82.98 points (1.78%) to 4,750.40, and the S&P 500 added 31.03 points (1.53%) to finish at 2,063.15. The Russell 2000 climbed 24.12 points (2.07%) to 1,190.37, and the Wilshire 5000 gained 332.36 points (1.56%) to end at 21,685.03.

On the NYSE, 3.2 billion shares traded, with advancers outnumbering decliners nearly 4 to 1. On the NASDAQ, 2.8 billion shares changed hands, with 2.6 advancing issues for every declining issue.

The price of the 10-year Treasury note slipped 1/32, bringing its yield up to 1.876%. The price of the 30-year Treasury bond increased 15/32, decreasing its yield to 2.443%.

From the Magazine
Insights: Plan Procrastination
We often talk about inertia among participants and about employing plan design elements to overcome any lack of engagement with the plan—automatic enrollment and automatic deferral increases being prime examples. Now, though, it seems there might be such a thing as sponsor inertia as well.Read more >
Small Talk

ON THIS DATE: In 1849, English-born Elizabeth Blackwell became the first woman in America to receive a medical degree. It was from the Medical Institution of Geneva, New York. In 1907, Charles Curtis, of Kansas, began serving in the United States Senate. He was the first American Indian to become a U.S. Senator. He resigned in March of 1929 to become U.S. President Herbert Hoover’s Vice President. In 1922, at Toronto General Hospital, 14-year-old Canadian Leonard Thompson became the first person to receive an insulin injection as treatment for diabetes. In 1957, toy company Wham-O rolled out the first batch of aerodynamic plastic discs known as Frisbees. In 1973, U.S. President Richard Nixon announced that Henry Kissinger and Le Duc Tho, the chief North Vietnamese negotiator, initialled a peace agreement in Paris “to end the war and bring peace with honor in Vietnam and Southeast Asia.” In 1983, the A-Team debuted on NBC. In 1989, surrealist artist Salvador Dali died in Spain at age 84.

 

And now it’s time for FRIDAY FILES!

How can this driver be so calm during such a close call?Read more >
Super Bowl party stereotypes. (The volume gets loud at times with this video.)Read more >

In Slaton, Texas, Ira Keys has saved every penny since he was 17 years old—literally. According to KCBD-TV, Keys said it was at that age his father told him, “Whatever you do son, save your money.” Keys said he didn’t have a lot of money back then, so he started saving pennies and has continued to save them.  The 81-year-old recently took his collection—weighing about 500 pounds—to the bank, where it took employees more than an hour to count them. The total was $816.

In Near Eastside, Indiana, a 32-year-old woman lost control of her car and struck a Hardee’s restaurant. She claimed she only drank two be.ers, but a brea.thalyzer registered her blood alc.ohol content at 0.168—twice the legal limit in Indiana. The woman was hired late last year to help run the campaign to repeal Indiana’s ban on Sunday alc.ohol sales at grocery, liq.uor, convenience and drug stores.

This is definitely a fail for this tow truck driver.Read more >

In DeBary, Florida, an 83-year-old woman drove herself and her 87-year-old husband to the hospital to be treated for injuries received in a fight—with each other. The husband had bruising and cuts to his left forearm, which he was said were caused by his wife grabbing him and “clawing his arm with her fingernails,” the Daytona Beach News-Journal reports. The wife, listed in court records as at 4 feet 11 inches tall and weighing 88 pounds, according to the news report, had the left side lens of her glasses missing, severe bruising and numerous bloody skin tears to both forearms, an abrasion on her left cheek and bruising on her upper chest near her neck and collarbone. She was charged with battery on a person older than 65—a felony. Both the husband and wife declined to give statements, saying they did not remember the incident or the reason they were arguing.

In Toledo, Ohio, police tried to stop a motorist, but he sped up and led them on a chase. During the pursuit, the man rammed through the gate of a parking lot, which happened to be the parking lot of a prison. He followed the facilities driveway around the perimeter, but it just ended up back in the parking lot. The motorist is facing several charges.

In Aberdeen, Scotland, the oldest woman in the country recently celebrated her 109th birthday. Asked for the secret to her longevity, the woman told the UK’s Daily Mail, “My secret to a long life has been staying away from men. They’re just more trouble than they’re worth.” She added, “I also made sure that I got plenty of exercise, eat a nice warm bowl of porridge every morning and have never gotten married.”

Have a good weekend, everyone!
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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