Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 20th, 2015
Benefits & Administration
Are Employers Hindering Retirement Savings Progress?
A research paper published by the Social Science Research Network (SSRN) claims employers design their defined contribution (DC) retirement plans to attract labor, and often exploit problematic employee retirement savings behaviors. The researchers suggest taking employers out of the process of offering employees DC retirement plans.Read more >
NQ Plans Prevalent for Tax-Exempt Health Organizations
Executive benefits continue to be a strategic component of total rewards programs for health care executives, Mercer finds. Nearly two-thirds (63%) of tax-exempt organizations offer top executives an employer-paid nonqualified retirement plan, according to Mercer’s 2014/2015 Health Care Executive and Physician Benefits and Perquisites Report.Read more >
Deals and People
Voya Keeps Building Government Markets Team With Rehire
Data and Research
Unplanned Financial Challenges Continue to Plague US Workers’ Retirement Savings
Is the UAW’s Demand for Return of Pensions a Realistic Ask?
Products, Deals & People
Retirement Industry People Moves
Deana Calvelli joins Lockton; Brett Dutton comes to PNC Institutional Asset Management; and Dave Anders & Associates affiliates with PlanMember Securities Corporation. Read more >
Sponsored message from PNC Retirement Solutions
Watch PNC’s Brad Bonno discuss employee retirement education strategies.
Get employee education tips from Brad Bonno, Vice President and Director of Employee Education at PNC Retirement Solutions in his interview with PLANSPONSOR Editor-in-Chief Alison Cooke-Mintzer.Read more >
The market for investment services devised to meet specific institutional client objectives will grow by more than $1 trillion over the next five years, predicts global analytics firm Cerulli Associates. “Institutional Custom Solutions 2015: The Drive Towards Objectives-Based Solutions” defines the U.S. market for custom solutions and analyzes the growth of the various functions that comprise custom solutions, including multi-asset-class solutions (MACS), outsourced chief investment officer (OCIO), liability-driven investing (LDI), and pension risk transfer (PRT)/defined benefit plan resolution transactions.Read more >
Economic Events

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all items index rose 0.1% before seasonal adjustment.

Real average hourly earnings decreased 0.4% in June, seasonally adjusted. Average hourly earnings were unchanged and the CPI-U increased 0.3%. Real average weekly earnings decreased 0.3% over the month.

Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,174,000, according to the Census Bureau. This is 9.8% above the revised May estimate of 1,069,000 and 26.6% above the June 2014 rate of 927,000. Single-family housing starts in June were at a rate of 685,000; this is 0.9% below the revised May figure of 691,000. The June rate for units in buildings with five units or more was 476,000.

THE ECONOMIC WEEK AHEAD: Wednesday, the National Association of Realtors will report about existing home sales for June. Thursday, the Labor Department will issue its initial claims report. Friday, the Census Bureau will report about new home sales for June.

Market Mirror

Major U.S. stock indices ended mixed Friday, with the Dow losing 33.80 points (0.19%) to finish at 18,086.45, the NASDAQ climbing 46.96 points (0.91%) to 5,210.14, and the S&P 500 ticking up 2.35 points (0.11%) to 2,126.64. The Russell 2000 closed 5.74 points (0.45%) lower at 1,267.09, and the Wilshire 5000 increased 4.01 points (0.02%) to 22,420.67.

On the NYSE, 3.2 billion shares traded, with 1.8 declining issues for every advancing issue. On the NASDAQ, 2.9 billion shares changed hands, with a 1.5 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note was up 1/32, decreasing its yield to 2.346%. The price of the 30-year Treasury bond increased 18/32, bringing its yield down to 3.082%.

WEEK’S WORTH: For the week ending July 17, the Dow increased 1.84%, the NASDAQ climbed 4.25%, and the S&P 500 gained 2.41%. The Russell 2000 was up 1.20%, and the Wilshire 5000 finished 2.12% higher.

GAO Requests
Survey of 401(k) Plans’ Use of Eligibility and Vesting Requirements: Building savings in a 401(k) plan is a key step to achieving income security in retirement for millions of Americans. That savings may be affected by the eligibility and vesting requirements that are used by many plans. The Government Accountability Office (GAO) is asking plan sponsors to participate in its survey examining why plan sponsors use certain eligibility and vesting requirements, how they may have changed the requirements, and how they communicate the rules to employees and participants.Read more >
Survey of Lifetime Income Options 401(k) Plan Sponsors Offer Participants: An increasing American lifespan in an era when the predominant workplace retirement plan no longer guarantees lifetime income calls into question how well 401(k) plans work for the oldest Americans. The GAO is asking plan sponsors to participant in a survey that examines the mechanisms in 401(k) plans that can provide some financial stability to participants until the end of their lives. It asks about the advantages and disadvantages of these options, education about them, and barriers that might limit their adoption.Read more >
The Defending Public Safety Employees’ Retirement Act (H.R. 2146), introduced by U.S. Congressman Dave Reichert (R-Washington) and Bill Pascrell, Jr. (D-New Jersey), allows federal public safety officials to access retirement savings at the age of 50 after 20 years of service without the application of the 10% tax on early withdrawals.Read more >
From the Magazine
DB Plan Q&A
Alternative investments have grown in popularity, due to the perception that they have performed well and lessened plans’ exposure to volatility in an environment where broad-based equity and bond markets are forecast to produce anemic returns. The level of interest has risen to the point that some plan fiduciaries may believe they could be failing in their duties if they neglect to include this asset category in their defined benefit (DB) pension plan portfolios. Marcia Wagner, principal and founder of The Wagner Law Group, answers questions addressing the due diligence a plan sponsor should undertake with respect to alternatives, so as to properly fulfill its fiduciary obligations.Read more >
Small Talk
ON THIS DATE: In 1963, Jan and Dean’s “Surf City” hit No. 1 on the U.S. pop charts. In 1969, at 10:56 p.m. EDT, American astronaut Neil Armstrong, 240,000 miles from Earth, stepped off the lunar landing module Eagle and became the first human to walk on the surface of the moon. In 1973, actor and martial-arts expert Bruce Lee died in Los Angeles at age 32 from a brain edema possibly caused by a reaction to a prescription painkiller. In 2012, a 24-year-old gunman went on a rampage at a movie theater in the Denver suburb of Aurora, killing 12 people and injuring at least 70 others.
SURVEY SAYS: Managing Multiple Retirement Plans
Last week, I asked NewsDash readers, “Does your firm, or do have clients that, sponsor multiple retirement plans?” I also asked about certain aspects of plan administration. The vast majority (90.9%) of responding readers sponsor, or have clients that sponsor, multiple retirement plans. Of those that do, 22.6% have separate personnel working for the plan sponsor that handle each plan type, while 74.2% do not. About one-quarter (25.8%) of respondents reported there are separate committees for each plan. Recordkeeping and administration are bundled for each plan with one plan provider, according to 48.4% of respondents. One-quarter (25.8%) of responding readers said participant education/communication is combined for each plan. Verbatim comments from readers clearly show managing multiple retirement plans is complicated, with one reader summing it up as, “If our plans had Facebook accounts, each relationship status would be ‘It’s complicated.’” But, a few expressed confidence in their ability to handle it; “Plan sponsors have been multi-tasking since way before multi-tasking was ‘cool.’” A couple shared information about how they handle education and committees. Editor’s Choice goes to the reader who said: “Yep, I do and do it quite well…despite having one hand tied behind my back by the plague of overwhelmingly odious regulations and the scourge of auditors anally focused on the barn door rather than where the horse is heading.” A big thank you to all who participated in the survey!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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