Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 16th, 2015
Benefits & Administration
Beyond Auto-Enrollment: Managed Accounts and Advice
For years, the retirement planning industry pondered how to transform nominal participants into committed investors and savers, “and do so in a way that’s legal, appropriate, allowed and understandable to the participant,” says Steve Dorval, vice president wealth solutions for John Hancock Retirement Plan Services. The first steps are getting participants into the plan and encouraging them to save at appropriate levels. The search for better investment options produced balanced funds, along with target-risk and the increasingly popular target-date funds (TDFs), Dorval says. “The logical next steps along that continuum have been more personalized advice offerings, and that would include managed accounts.”Read more >
Issues concerning government regulation in the realm of health care benefits have ebbed in importance for employers during the last three years, according to Littler Mendelson’s 4th annual Executive Employer Survey. Three years ago, 64% of survey respondents said they were significantly concerned about regulatory issues surrounding health care affecting their business, compared with only 33% of respondents in 2015. However, in response to the challenges to the Patient Protection and Affordable Care Act (ACA) and uncertainty surrounding its implementation, more than half (55%) of employers engaged employee benefits attorneys or consultants to help navigate upcoming regulations and track areas where there are likely to be changes.Read more >
Automatic enrollment succeeds in boosting participation by older workers age 55 to 69 in defined contribution (DC) plans, the Center for Retirement Research at Boston College found. But because defaults are so low, their contributions are lower than those who voluntarily opt in.Read more >
Products, Deals & People
Pentegra Unveils Retirement Savings Guidance Tool
Pentegra Retirement Services has introduced the Pentegra Participant SmartPath, an online tool that generates retirement savings accumulation and investing strategies to help 401(k) plan participants achieve successful retirement outcomes. SmartPath details effective tactics—including the benefits of compounding, utilizing effective asset allocation, periodic rebalancing and understanding distribution and decumulation plans.Read more >
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Sponsored message from Vanguard
How America Saves 2015
Get the latest in DC plan trends from Vanguard’s annual report. How America Saves 2015 is a comprehensive report that offers useful insights into current issues affecting DC plans, including employer contribution trends, automatic plan features use of target-date funds, use of advice services and more.Read more >
Economic Events
The Producer Price Index (PPI) for final demand advanced 0.4% in June, according to the Bureau of Labor Statistics. Final demand prices rose 0.5% in May and declined 0.4% in April. In June, prices for final demand goods increased 0.7%. The index for final demand services advanced 0.3%.
Market Mirror

U.S. stock indices ended lower as energy companies fell with weaker oil prices, according to the Associated Press. The Dow was down 3.41 points (0.02%) at 18,050.17, the NASDAQ decreased 5.95 points (0.12%) to 5,098.94, and the S&P 500 slipped 1.55 points (0.07%) to 2,107.40. The Russell 2000 lost 8.81 points (0.69%) to finish at 1,264.52, and the Wilshire 5000 closed 48.05 points (0.22%) lower at 22,252.58.                  

On the NYSE, 3.2 billion shares changed hands, with 1.5 declining issues for every advancing issue. On the NASDAQ, 2.9 billion shares traded, with a near 2 to 1 lead for decliners.

The price of the 10-year Treasury note was up 13/32, decreasing its yield to 2.353%. The price of the 30-year Treasury bond increased 1 2/32, bringing its yield down to 3.141%.

Compliance
DOL Gets Final Judgment in Misuse of Funds Case
A consent judgement issued by a Kentucky federal court will recover nearly $300,000 for a pension plan in Michigan, and ban the defendants from serving as plan fiduciaries or service providers again. The latest court order culminates six years of investigations and three years of legal battle for the Department of Labor (DOL).Read more >
From the Magazine
What to Know About Distributions and Rollovers
The Department of Labor (DOL), Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and Government Accountability Office (GAO) are looking at what plans and service providers say to participants about distributions and rollovers. Should you be looking at this, too?Read more >
Investing
June was another light month of trading activity in defined contribution plans, according to the Aon Hewitt 401(k) Index. Of the 22 trading days in the month, 13 had more money flow to equities than to fixed income. However, for the month, the most popular asset classes for inflows were money market ($63 million), small U.S. equity ($56 million), and GIC/stable value funds ($41 million). Read more >
Small Talk
Health and Life Satisfaction Improve in Retirement
Despite a prevailing belief that health and life satisfaction decline in retirement, the National Bureau of Economic Research (NBER) says they actually improve, at least in the initial few years of retirement. While some have determined that retirees are socially isolated and have a diminished sense of purpose, they have more time for leisure, “which may reduce physical and mental stress, improving both subjective well-being and health,” NBER says. Read more >
ON THIS DATE: In 1790, the young American Congress declared that a swampy, humid, muddy and mosquito-infested site on the Potomac River between Maryland and Virginia would be the nation’s permanent capital. In 1935, the world’s first parking meter was installed on the southeast corner of what was then First Street and Robinson Avenue in Oklahoma City, Oklahoma. In 1945, at 5:29:45 a.m., the Manhattan Project came to an end as the first atom bomb was successfully tested in Alamogordo, New Mexico. In 1966, Tommy James and the Shondells earned their first No. 1 hit with “Hanky Panky.”  In 1999, John F. Kennedy, Jr.; his wife, Carolyn Bessette Kennedy; and her sister, Lauren Bessette, died when the single-engine plane that Kennedy was piloting crashed into the Atlantic Ocean near Martha’s Vineyard, Massachusetts.
SURVEY SAYS: Plan sponsors may have more than one retirement plan to manage—a defined benefit plan and a defined contribution plan, two types of defined contribution plans, a qualified plan and a nonqualified, etc. This week, I’d like to know, does your firm or do have clients that sponsor multiple retirement plans, and in what ways do they handle certain aspects of plan administration? You may respond to this week’s survey by 6 p.m. Pacific time today.Read more >
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