Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 10th, 2014
Benefit Briefs
Employers Offering Employees More Health Care Control
Employers seeking to better manage health care costs and benefits are offering employees more choice and ownership for their health care. For the 2014 benefit year, large employers continued to invest in wellness programs—adding some new programs, expanding incentive dollars and increasing their efforts to engage employees, according to the 2014 bswift Benefits Study. Within large companies, 87% now provide wellness programs for their employees. However, only 69% of small companies offered any wellness program to their employees—a significant drop from the 81% reported in 2013. The survey also found the percentage of large employers that are considering a defined contribution (DC) approach to health care benefits and/or private exchanges is gradually increasing.
An investigation by the U.S. Government Accountability Office (GAO) recently identified questionable practices of companies that offer retirees pension advances. As part of its investigation, the GAO identified at least 38 companies that offered individuals lump-sum payments or advances in exchange for receiving part or all of their pension payment streams. These companies used multistep pension advance processes that included various other parties. The GAO investigation report says at least 21 of the 38 companies were affiliated with each other in ways that were not apparent to consumers. Findings also show that all of the companies operated primarily as Web-based companies, and that some targeted financially vulnerable consumers with poor or bad credit nationwide.  
More Health Care Organizations Bundling DB Plan Services
Thirty-seven percent of health care organization plan sponsors offer a defined benefit (DB) plan. Health care organizations that sponsor 403(b) plans are somewhat more likely to offer a DB plan (41%, although down from 48% in 2012) than those that sponsor 401(k) plans (32%, consistent with prior years), according to the “Retirement Plan Trends in Today’s Healthcare Market – 2014” report released by Transamerica Retirement Solutions in partnership with the American Hospital Association. The survey finds health care organizations that sponsor DB plans appear to be shifting away from unbundled service arrangements. Forty-one percent (down slightly from 44% in 2012) utilize an unbundled service arrangement for their DB plans.
Buyer's Market
Transamerica Retirement Solutions has named Bill Feldmaier as division vice president for the company’s central region retirement plan sales. Feldmaier will lead Transamerica’s team of central regional vice presidents for all retirement plan sales activities in the small-plan market.
Market Mirror
News of the Fed’s plans to stop quantitative easing corrected major U.S. stock indices’ downward streak, with the Dow up 78.99 points (0.47%) Wednesday at 16,985.61. The NASDAQ gained 27.57 points (0.63%) to finish at 4,419.03, and the S&P 500 increased 9.12 points (0.46%) to 1,972.83. The Russell 2000 increased 1.72 points (0.15%) to 1,173.87, and the Wilshire 5000 closed 95.01 points (0.46%) higher at 20,903.70.   On the NYSE, 3.2 billion shares traded, with 1.4 advancing issues for every declining issue. On the NASDAQ, 2.7 billion shares changed hands, with a 1.2 to 1 ratio of advancers to decliners.   The price of the 10-year Treasury note was up 2/32, and the price of the 30-year Treasury bond was up 1/32, bringing their yields down to 2.552% and 3.373%, respectively.
Rules & Regulators
Details About the Proposed 408(b)(2) Fee Guide
The Department of Labor (DOL) wants to ensure that plan fiduciaries fully understand fee information they receive. Therefore, the DOL is planning to ask covered service providers (CSPs) to provide plan fiduciaries with a guide when the 408(b)(2) provider fee disclosures are not contained in a single document or exceed a certain number of pages, said Craig Hoffman, general counsel at the American Society of Pension Professionals & Actuaries (ASPPA). Hoffman made his comments during an ASPPA webcast Tuesday titled “An Update on DOL Fee Disclosure.” So far, the DOL has not been clear about how many documents or pages would trigger the need for a guide, Hoffman said.
The Small Business Administration, Department of Health Human and Services (HHS), and Small Business Majority have teamed up for a free weekly webinar series during which small employers can learn the basics of the Patient Protection and Affordable Care Act (ACA) and what it means for their organization and employees. Topics covered include cost containment, the Small Business Health Care Tax Credit, the new Health Insurance Marketplace and Employer Shared Responsibility.
Insights into 403(b) Compliance
Changes to rules for employer-sponsored retirement plans are established with regularity, and sometimes it is hard to determine what regulators have in mind for compliance. At the National Tax-deferred Savings Association (NTSA) 2014 403(b) Summit, M. Kristi Cook, an attorney with her own practice in Horsham, Pennsylvania, and Ellie Lowder of TSA Consulting and Training Services in Tucson, Arizona, shared insights they’ve gained into compliance requirements for 403(b) plans.
The Internal Revenue Service (IRS) has moved back the date of a phone forum on same-gender couples and retirement plans to July 17.
Tips for Fielding Lost Participant Claims
“You can’t guarantee yourself a win,” says employee benefits lawyer David Weiner, describing claims appeals and litigation involving missing retirement plan participants, “but you can guarantee a loss.” Sponsors are often faced with the task of fielding benefits claims from participants for whom no real records exist—making it difficult to prove whether the participant took cash distributions or still has a stake in plan assets. Sponsors should have a well-reasoned process in place and take care to document decisions.
Financial Sense
Trading activity in defined contribution (DC) plans in June continued to be light—marking the second lowest monthly level since Aon Hewitt began tracking participant transfers in 1997. Across the Index, total transfer activity was $319 million (0.20%) with one day in June above normal. However, when trading occurred, plan participants slightly favored fixed-income funds over equities.
Sponsored message from PNC
PLANSPONSOR Interviews Jim Sandidge of PNC PLANSPONSOR Editor-in-Chief Alison Cooke-Mintzer sits down with Jim Sandidge, Product Director of Retirement Products at PNC Bank. Click here to watch the full interview.  
Small Talk
ON THIS DATE:  In 1850, Vice President Millard Fillmore was sworn in as the 13th president of the United States. President Zachary Taylor had died the day before, five days after falling ill with a severe intestinal ailment on July 4. In 1890, Wyoming became the 44th state to join the United States. In 1925, in Dayton, Tennessee, the trial against John Thomas Scopes, a young high school science teacher accused of teaching evolution in violation of a Tennessee state law, began. In 1913, the highest temperature ever recorded in the U.S. was 134 degrees in Death Valley, CA. In 1962, the United States Patent Office issued Swedish engineer Nils Bohlin a patent for his three-point automobile safety belt.
SURVEY SAYS: Almost all notices and statements can be delivered to participants electronically, if plan sponsors follow certain rules. This week, I’d like to know, which required communications do you offer to participants electronically, and do you think this makes participants more likely to read them? You may respond to this week’s survey by 6 p.m. Pacific time today.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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