Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 14th, 2015
Benefits & Administration
Sponsors Should Ask for Indemnification in Contracts
Retirement plan sponsors should ask for indemnification clauses when they enter into contracts with service providers and retirement plan advisers, experts say. Indemnification clauses are promises by the service providers that if they do something wrong that causes harm to the plan sponsor or causes a third party to sue the sponsor, the service provider will cover their legal costs, explains Fred Reish, chair of the Financial Services Employee Retirement Income Security Act (ERISA) practice at Drinker, Biddle & Reath in San Francisco. However, while it is important for plan sponsors to realize that indemnification clauses are helpful protections, they are not “exculpatory provisions” that eliminate sponsors’ fiduciary liabilities, Reish says.Read more >
Working Americans expect to retire at an average age of 68—a full decade later than when current retirees left the work force, according to Northwestern Mutual’s “2015 Planning & Progress Study.” Notably, 62% of working Americans believe they will work past the traditional retirement age of 65 out of necessity, with 79% of this group saying they won’t have saved enough to retire comfortably, and another 79% saying they are not certain that Social Security will take care of their needs.Read more >
Products, Deals & People
Lockton is expanding its retirement services practice with a new executive benefits expert. Daniel Barry will be joining the firm as senior vice president, working out of Denver and Charlotte, North Carolina, as part of the Mountain West team.Read more >
Bank of America Merrill Lynch Launches Longevity Training
At the 2015 White House Conference on Aging, Bank of America Merrill Lynch will announce the introduction of a longevity training program for human resources (HR) and benefit plan professionals. Developed in partnership with the University of Southern California’s Leonard Davis School of Gerontology, the Bank of America Merrill Lynch Longevity Training Program is designed to drive greater awareness and understanding of the evolving needs of the nation’s aging population and their families.Read more >
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
2022 Recordkeeping Survey
TRIVIAL PURSUITS: Meaning and Origin of the Idiom “Watershed Moment?”
Maximum Benefit and Contribution Limits Table 2023
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
Market Mirror

U.S. stocks closed higher after Greece reached an agreement with its creditors, according to the Associated Press. The Dow gained 217.27 points (1.22%) to finish at 17,977.68, the NASDAQ climbed 73.82 points (1.48%) to 5,071.51, and the S&P 500 closed 22.98 points (1.11%) higher at 2,099.60. The Russell 2000 was up 13.33 points (1.06%) at 1,265.35, and the Wilshire 5000 increased 240.27 points (1.09%) to 22,194.62.

On the NYSE, 3.2 billion shares changed hands, with 2.7 advancing issues for every declining issue. On the NASDAQ, 2.9 billion shares traded, with a 2.4 to 1 ratio of advancers to decliners.

The price of the 10-year Treasury note was down 15/32, increasing its yield to 2.452%. The price of the 30-year Treasury bond decreased 27/32, bringing its yield up to 3.237%.

DOL Clarifies Annuity Selection Safe Harbor Regulation
A regulation issued by the Department of Labor (DOL) in 2008 regarding the selection of annuity providers under defined contribution (DC) plans (safe harbor rule) provides plan fiduciaries with safe harbor conditions for the selection and monitoring of annuity providers and annuity contracts for benefit distributions. However, in Field Assistance Bulletin 2015-02, the DOL says a recurring comment about the safe harbor rule is that employers remain unclear about the scope of their fiduciary obligations with respect to annuity selection under defined contribution plans.Read more >
The Internal Revenue Service (IRS) has announced a free webinar, “Correcting Retirement Plan Mistakes – Summer 2015 Updates,” that will cover how updates to the IRS correction program make fixing certain retirement plan failures easier.Read more >
On Remand, ABB Wins Fund Change Case
In the long-running Tussey v. ABB lawsuit, a court found ABB breached its fiduciary duties, but a procedural error by plaintiffs handed ABB the win. On remand, the U.S. District Court for the Western District of Missouri weighed whether fiduciaries to ABB’s 401(k) plan abused their discretion when making an investment lineup change, and found they did, but since plaintiffs in the case failed to prove damages using the appropriate calculation, judgement was entered in favor of the fiduciaries.Read more >
Sixty-three percent of professional U.S. investors foresee an increase in market volatility in the next 12 months, according to the MFS Active Management Sentiment survey. Seventy percent say protecting capital in down markets is one of the most important considerations when selecting an active manager, and 63% say actively managed strategies work best in a falling market.Read more >
Institutional Investors More Cautious About Alternatives
Twenty-two percent of institutional investors surveyed by Morningstar and Barron’s financial magazine plan to allocate more than 25% of their portfolios to alternative investments in the next three to five years, down from 31% in 2013. Meanwhile, 63% of advisers say they will allocate more than 11% of assets to alternatives in the next five years, up from 39% who expressed that level of commitment in 2013.Read more >
Small Talk
Researchers at the National Bureau of Economic Research (NBER) studied financial literacy issues using an unusual set of respondents: largely tech-savvy, white-collar professionals who are users of LinkedIn, the professional networking site. They attempted to hone in on retirement awareness rather than previous retirement savings, by asking respondents if they had tried to figure out how much they need for retirement.Read more >

ON THIS DATE: In 1868, Alvin J. Fellows patented the tape measure. In 1881, Sheriff Pat Garrett shot Henry McCarty, popularly known as Billy the Kid, to death at the Maxwell Ranch in New Mexico. In 1913, Gerald R. Ford was born Leslie Lynch King, Jr. in Omaha, Nebraska. In 1946, Dr. Benjamin Spock’s “The Common Sense Book of Baby and Child Care” was first published.


TUESDAY TRIVIA: The first box of Crayola Crayons was produced in 1903 as an 8-count box. It sold for a nickel and contained the colors red, orange, yellow, green, blue, violet, brown and black.

TRIVIAL PURSUITS: From where did the brand name Crayola come?Read more >
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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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