Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 11th, 2014
Benefit Briefs
Health Care Employers Addressing Retirement Plan Engagement
Defined contribution retirement plan sponsors in the health care industry are becoming more proactive in their efforts to help employees adequately prepare for retirement. According to Transamerica Retirement Solutions report, “Retirement Plan Trends in Today’s Healthcare Market – 2014,” produced in partnership with the American Hospital Association, they are making adjustments to plan design that can help employees achieve retirement goals and also implementing programs that address the challenge of employee engagement. Seventy-five percent of sponsors surveyed said motivating employees to save adequately is the biggest challenges of managing a retirement plan.
Cost of Generating Retirement Income Increased
The cost of generating retirement income increased over the last year, according to a new BlackRock analysis, but market gains have helped retirement savers stay on track. The “CoRI Retirement Indexes Analysis,” based on BlackRock’s proprietary CoRI Retirement Indexes, tells a somewhat positive story about America’s retirement readiness, as those ages 55, 60 and 64 with median income and retirement savings are on track to replace as much as two-thirds of their on-the-job earnings each year in retirement from savings and Social Security payments combined. 55-year-olds with median levels of income and retirement savings are better positioned to achieve adequate income replacement in retirement compared with older workers.
Roth Accounts Can Improve Retirement Outcomes
“The adoption of Roth features is definitely rising,” Jean Young, senior analyst, Vanguard Center for Retirement Research, tells PLANSPONSOR. Roth accounts appeal to a broad segment of employees, she says, offering advantages to employees from a tax standpoint. Young explains that because taxes on Roth contributions are now instead of later, this helps to alleviate some of the worry that employees may have about what their tax rates will be once they retire and during their years in retirement. As to whether Roth accounts can help improve employees’ retirement readiness, Young says, “If an employee makes the same deferral amounts with Roth as they would with a pre-tax account, upon retirement, more assets will be available.”
Buyer's Market
New York Life Tool Gauges Retirement Readiness
New York Life Retirement Plan Services has released an interactive Retirement Readiness Dashboard to help 401(k) plan sponsors and their advisers better gauge the effectiveness of their plans. The dashboard is designed to determine a plan participant’s level of retirement readiness, as well as model plan changes that may increase those levels of readiness. Lynda Abend, chief data officer at New York Life Retirement Plan Services, tells PLANSPONSOR, “We incorporate defined contribution, defined benefit and Social Security benefits.”
Economic Events
In the week ending July 5, the advance figure for seasonally adjusted initial claims for unemployment insurance was 304,000, a decrease of 11,000 from the previous week’s unrevised level of 315,000, the Labor Department reported. The four-week moving average was 311,500, a decrease of 3,500 from the previous week’s unrevised average of 315,000. The U.S. Census Bureau announced that May 2014 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $453.2 billion, up 0.7% from the revised April level and were up 6.6% from the May 2013 level. The April preliminary estimate was virtually unchanged. May sales of durable goods were up 0.2% from last month and were up 5.9% from a year ago. Sales of metals and minerals, except petroleum, were up 3.2% from last month, while sales of computer and computer peripheral equipment and software were down 1.6%. Sales of nondurable goods were up 1.1% from April and were up 7.2% from last May. Sales of farm product raw materials were up 6.6% from last month and sales of apparel, piece goods, and notions were up 2.0%. The average interest rate for a 30-year fixed-rate mortgage is 4.15%, up from 4.12% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.24%, up from 3.22%.
Market Mirror
Thursday, the Dow closed 70.54 points (0.42%) lower at 16,915.07, the NASDAQ was down 22.83 points (0.52%) at 4,396.20, and the S&P 500 lost 8.15 points (0.41%) to finish at 1,964.68. The Russell 2000 fell 11.95 points (1.02%) to 1,161.86, and the Wilshire 5000 decreased by 98.03 points (0.47%) to 20,805.67. On the NYSE, 3.2 billion shares changed hands, with declining issues outnumbering advancing issues more than 2 to 1. On the NASDAQ, 2.7 billion shares traded, with a near 3 to 1 lead for decliners. The price of the 10-year Treasury note increased 5/32, decreasing its yield to 2.536%. The price of the 30-year Treasury bond was up 2/32, bringing its yield down to 3.372%.
Rules & Regulators
Why Are There Fiduciaries?
Under the Employee Retirement Income Security Act (ERISA), plan sponsors serve as fiduciaries for their retirement plans. Most often, the responsibilities they incur in that role are delegated to a committee and the committee members become fiduciaries. That is a heavy responsibility. It’s also an unnatural one.
Financial Sense
The funded status of the largest defined benefit (DB) plans in the United States improved during the month of June, according to data from Milliman, Inc. The Milliman 100 finds a funded status increase of $14 billion. The deficit decreased to $252 billion from $266 billion at the end of May, due to investment gains.
The World at Large
The UK Pension Regulator has “significantly” missed its target for half of its ‘key performance indicators’ for improving defined contribution (DC) plan members’ outcomes, its annual report shows.
Small Talk
ON THIS DATE:  In 1767, John Quincy Adams, son of the second U.S. president, John Adams, was born in Braintree, Massachusetts. In 1804, the United States’ first secretary of the treasury, Alexander Hamilton, was killed by Vice President Aaron Burr in a duel. In 1914, George Herman “Babe” Ruth made his major league baseball debut pitching seven strong innings to lead the Boston Red Sox over the Cleveland Indians, 4-3. In 1916, in a ceremony at the White House, President Woodrow Wilson signed the Federal Aid Road Act. The law established a national policy of federal aid for highways. In 1922, the Hollywood Bowl, one of the world’s largest natural amphitheaters, opened with a performance by the Los Angeles Philharmonic. In 1960, the Hollywood Argyles’ novelty song “Alley Oop” topped the Billboard pop chart. In 1979, parts of Skylab, America’s first space station, came crashing down on Australia and into the Indian Ocean five years after the last manned Skylab mission ended.   And now it’s time for FRIDAY FILES!
This adorable elderly couple should take their song and dance show on the road.
In Holly Hill, Florida, a man ran from a traffic stop and two witnesses said he was headed to his home. As deputies headed to the home, a caller reported the man was hiding behind a sport utility vehicle. As officers got there, they saw him walking out but he ran off again, according to The Daytona Beach News-Journal. Shortly after, dispatchers got a call from someone reporting the man drove from the area in a Ford Mustang. In a second call, the same person reported the man was in Hollyland Park. But deputies, helped out by a police dog, kept searching the area they last saw the man and found him hiding. After he was caught dispatchers provided deputies the telephone number from where the 911 calls were made and it turned out the man had called 911 himself trying to throw off the police.
The no-hands way to put your pants on.
In Shannon County, Missouri, a sheriff’s deputy decided he’d be nice and let 10 inmates outside the jail to watch fireworks on Independence Day. But now, one accused of mur.der is at large. Another sheriff’s deputy said, “One of the inmates told me he wasn’t running real fast,” but search efforts are challenging because of all the brush in the area. The deputy who let the inmates out has been fired.
A special 4th of July fireworks show from Disneyland, California.
In Ocala, Florida, witnesses told police a woman appeared to be into.xicated and doing yoga in the street. Before police arrived, another witness called and said the woman was taking off her clothes, according to the local News 13 channel. When officers arrived, they found her standing in just her underwear, standing in the road beside her truck, with the driver’s side door open. Inside the truck, police found her.ion and drug parap.hernalia. In Oconee County, Georgia, the sheriff’s office received a call about a dog locked in a car at a local food mart. The outside temperature was 99 degrees and the temperature registered inside the car was 123, according to the local ABC news station. When a sheriff’s office sergeant arrived at the scene, the owner of the car told him the dog had driven him to the store to buy some corn. The officer said the owner appeared to be highly into.xicated. Have a great weekend!
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News from   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.

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