| Benefits & Administration | The funded status of the typical U.S. corporate
pension plan increased 1.5 percentage points in June to 87.8%, according to the
BNY Mellon Investment Strategy and Solutions Group (ISSG). Liabilities declined
more rapidly than assets during the month. The June BNY Mellon Institutional
Scorecard is the first to reflect a realignment in the December 2014 funded
status for the typical U.S. corporate plan resulting from recent changes in
mortality tables produced by the Society of Actuaries to estimate life
expectancies. These longer life expectancy assumptions caused a
5-percentage-point reduction in the December 2014 funded status, which was then
carried forward, ISSG said.Read more > | | Products, Deals & People | The Newport Group Inc. and its affiliates will
be acquiring the Greensboro, North Carolina, operations of Clark Consulting
LLC, and its broker/dealer (B/D) Clark Securities Inc. This will make Newport
the largest administrator of bank-owned life insurance (BOLI) and
corporate-owned life insurance (COLI) in the nation, according to the announcement.
BOLI and COLI are used to recover the costs of supplemental employee health and
nonqualified retirement plans.Read more > | RIA Issues eBook About TDF Best Practices | Guidance Point Retirement Services, a registered
investment adviser (RIA) in Bangor, Maine, has issued “Navigating the
Target-Date Fund Evaluation Process,” an e-book for defined contribution (DC)
plan sponsors containing best practices for evaluating and selecting a
target-date fund (TDF) series for their participants. The book uses tips and
information gleaned from the Department of Labor’s (DOLs) “Target-Date
Retirement Funds – Tips for ERISA Plan Fiduciaries.”Read more > | A financial wellness vendor, Four Seasons
Financial Education (FSFE), has introduced a voluntary option to its corporate
financial wellness programs. According to FSFE, this offering is the first of
its kind in the U.S. and gives employers an alternative to traditional programs
for which plan sponsors generally cover the cost.Read more > |
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| Economic Events | The U.S. Census Bureau announced that
May 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 $449.8 billion, up 0.3% from the revised April
level, but down 3.8% from the May 2014 level. May sales of durable goods were
down 0.1% from last month, but were up 1.6% from a year ago. Sales of furniture
and home furnishings were down 2.8% from last month, while sales of motor
vehicle and motor vehicle parts and supplies were up 2.2%. Sales of nondurable
goods were up 0.7% from April, but were down 8.3% from last May. Sales of
petroleum and petroleum products were up 4.3% from last month.
THE
ECONOMIC WEEK AHEAD: Tomorrow,
the Census Bureau will report about retail sales in June and business
inventories in May. Wednesday, the
Bureau of Labor Statistics will reveal the producer price index (PPI) for June.
Thursday, the Labor Department will
issue its initial claims report. Friday,
the Bureau of Labor Statistics will reveal the consumer price index (CPI) for
June, and the Census Bureau will report about housing starts for June.
| | Market Mirror | Friday, the
Dow was up 211.79 points (1.21%) at 17,760.41, the NASDAQ rose 75.30 points
(1.53%) to reach 4,997.70, and the S&P 500 climbed 25.31 points (1.23%) to
2,076.62. The Russell 2000 finished 17.87 points higher (1.45%) at 1,252.02,
and the Wilshire 5000 closed 267.70 points higher (1.23%) at 21,954.36.
On the NYSE,
3.2 billion shares traded, with a nearly 4 to 1 lead for advancers. On the
NASDAQ, 2.9 billion shares changed hands, with roughly 3 advancing issues for
every declining issue.
The price of
the 10-year Treasury note slipped 23/32, bringing its yield up to 2.403%. The
price of the 30-year Treasury bond was down 1 9/32, increasing its yield to
3.194%.
WEEK’S
WORTH: For the week ending July 10, the Dow increased
0.17%, the NASDAQ finished 0.23% lower, and the S&P 500 was down 0.01%. The
Russell 2000 finished 0.30% higher and the Wilshire 5000 was up 0.02%.
| | Compliance | DOL Seeks Independent Fiduciary for Abandoned Plan | The U.S. Department of Labor (DOL) has filed a
lawsuit seeking appointment of an independent fiduciary for the abandoned
401(k) plan of Ants Software Inc. in Dunwoody, Georgia. According to the DOL,
in February 2013, Ants Software Inc. ceased operations, and at the time, Rik
Sanchez was fiduciary to the Ants Software Inc. 401(k) Plan. The plan’s
recordkeeper refused to make distributions after Sanchez changed each
participant’s address to his own.Read more > | Connecticut Governor Dannel Malloy signed Public
Act 15-167 into law, bringing additional protections to retirees’ assets from
creditor claims. Under the text of the law, any annuity contract to which
employee defined benefit (DB) plan assets are transferred and lose protections
of the Employee Retirement Income Security Act (ERISA) and insurance by the Pension
Benefit Guaranty Corporation (PBGC) will be considered a trust protected from
claims of creditors.Read more > | IRS Announces Halt to Certain Lump-Sum Offerings | The Internal Revenue Service (IRS) has issued
Notice 2015-49 announcing its intent “to amend the required minimum
distribution regulations under § 401(a)(9) of the Internal Revenue Code to
address the use of lump sum payments to replace annuity payments being paid by
a qualified defined benefit pension plan.”Read more > | | Report Rounds Up Retirement Reforms Needed | The U.S. Senate Committee on Finance’s Savings
and Investment Bipartisan Tax Working Group has issued a report in support of
recommendations for reform related to retirement savings. To enable small
employers to sponsor high-quality, low-cost plans, the working group recommends
that the Committee on Finance consider proposals that allow employers to join
open multiple employer plans (MEPs). The report says MEPs allow businesses to
share administrative and other responsibilities associated with providing
retirement plans to their employees; however, it notes, current law hinders the
formation of MEPs by requiring a “nexus” between employers who wish to join an
MEP.Read more > | | Investing | Retirement Income Shortfalls Are Everyone’s Problem | A survey from the CFA Institute and Mercer finds
a lack of retirement income could put a drag on capital markets over the five
years (and likely longer), driving financial stress for individuals and entire
economies. The 2015 Global Market Sentiment Survey asked CFA Institute members
to identify “the most underestimated risk” that could negatively impact global
capital markets in the next five years. Fully 20% pointed to the “the impact
from the demographic trends of aging populations,” and another 14% designated
“pension plan shortfalls and low levels of retirement savings” as leading
threats to global investors. Read more > | | Small Talk | ON THIS DATE: In
1585, a group of 108 English
colonists, led by Sir Richard Grenville, reached Roanoke Island, North
Carolina. In 1787, the U.S.
Congress, under the Articles of Confederation, enacted the Northwest Ordinance,
which established the rules for governing the Northwest Territory, for
admitting new states to the Union and limiting the expansion of slavery. In 1863, opponents of the Civil War draft
began three days of rioting in New York City, which resulted in more than 1,000
casualties. In 1930, France defeated
Mexico 4-1 and the United States defeated Belgium 3-0 in the first-ever World
Cup football matches, played simultaneously in host city Montevideo, Uruguay. In
1985, at Wembley Stadium in London,
Prince Charles and Princess Diana officially open Live Aid, a worldwide rock
concert organized to raise money for the relief of famine-stricken Africans. In
2010, George Steinbrenner, long-time
owner of the New York Yankees, who re-established the team as one of baseball’s
most successful franchises, died of a heart attack at age 80 in Tampa, Florida. | Last week, I asked NewsDash readers, “What do
you think would happen in your workplace if a technology failure occurred?” Nearly
half (47.1%) of responding readers said business would only be interrupted for
a short period of time; they have a good backup plan in place. Slightly more
than 39% indicated it would take a while to switch to manual processes and get
the business moving again, but they could do it, and 13.7% reported that their
business would halt; they are unprepared. Several readers who chose to leave
comments noted how likely a widespread technology failure is to happen— “What
do you mean “if”?!? I think you mean, when.”—while even more expressed
what a relief it would be to them if it happened in the workplace—“SNOW DAY!!!”
I appreciated all the comments about the generational shift of power that could
happen if such an event occurred—“Fortunately, there are still enough of us
gray-hairs around who’d be able to snap the screen-gazers out of their trances
and show ’em how to use a pen, pencil and paper.” Editor’s Choice goes to the reader who injected a good dose of
humor into the seriousness of the possibility. A big thank you to all who
participated in the survey!Read more > | 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 > | News from PLANSPONSOR.com
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