| Benefit Briefs | Research Targets Average 14% Deferral Rate | A secure retirement is achievable if retirement plan participants start saving early and consistently, and at levels far above 3%, according to findings from the Center for Retirement Research (CRR) at Boston College. Individuals with a workplace-based retirement plan should look to that plan, whether it’s a 401(k) or other retirement savings plan, for 35% of their retirement income, on average, the CCR study contends. The average required savings rate to achieve that level of targeted income is 14%—that is, if savings starts at age 35 and retirement occurs at age 65, according to “How Much Should People Save?” | | Buyer's Market | Nuveen Adopts RiskFirst Technology | Nuveen Asset Management will use RiskFirst’s web-based analytics platform, PFaroe, to help craft customized liability-driven investment (LDI) strategies for institutional clients, particularly defined benefit pension plans. Nuveen says the PFaroe product will be used by the firm’s recently formed Institutional Solutions Group as it builds and delivers LDI strategies for pension plans, public funds, foundations and endowments, insurance companies and other institutional investors. | Wagner Law Group Adds Two | Stephen Rosenberg, an Employee Retirement Income Security Act (ERISA) and labor law litigator, has joined The Wagner Law Group as “of counsel.” Rosenberg has extensive experience as an ERISA lawyer, the firm says, and has litigated a wide range of denial of benefit, breach of fiduciary duty, and class action cases related to retirement plans. Rosenberg will be joined at Wagner Law Group by his associate, Caroline Fiore, a commercial and regulatory lawyer with a background in administrative law, commercial litigation, insurance, class action, employee benefits and ERISA disputes. | Burnham Benefits Insurance Services, an employee benefits brokerage firm, has named Helen Vits as a senior account executive. She will consult with clients as they structure their employee benefit packages—from initial procurement and analysis to implementation. The firm notes that the enactment of the Patient Protection and Affordable Care Act (or ACA) has ushered in a need for subject matter experts with the skills to adapt to changes and recommend solutions to keep clients competitive in the job market. | | Industry Voices | Industry Voice: Getting Participants to Save More | Corporate America has a generation of older employees who do not have enough money saved for retirement. The result is that the Baby Boomers are either not retiring or they are retiring into financial hardship. Corporate America and Washington are starting to recognize the shortfall and understand the source of the problem. I stand up in front of enrollment groups and tell participants that they have a great 401(k) plan with highly ranked, style-specific, low-expense-ratio investment choices. We explain that their plan is with an outstanding, low-cost recordkeeper that offers the best in enrollment and educational materials. We reinforce the message that their plan sponsor is doing their part by paying the administrative fees and matching the participants’ contributions. Unfortunately, if the participant doesn’t contribute enough, all our efforts are wasted. How do we get the average participant to contribute more? | | Economic Events | On a
seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U)
increased 0.3% in June after rising 0.4% in May, according to the Bureau of
Labor Statistics. The index for all items less food and energy rose 0.1% in
June after increasing 0.3% in May.
Real average
hourly earnings were unchanged in June, seasonally adjusted. Average hourly
earnings rose 0.2% and the CPI-U rose 0.3%. Real average weekly earnings were
unchanged over the month.
Total existing-home sales, which are completed
transactions that include single-family homes, townhomes, condominiums and
co-ops, climbed 2.6% to a seasonally-adjusted annual rate of 5.04 million in
June from an upwardly-revised 4.91 million in May, according to the National
Association of Realtors. Sales are at the highest pace since October 2013 (5.13
million), but remain 2.3% below the 5.16 million-unit level a year ago.
| | Market Mirror | Tuesday, the Dow was up 61.81 points (0.36%) to
17,113.54, the NASDAQ increased 31.31 points (0.71%) to 4,456.02, and the
S&P 500 gained 9.90 points (0.50%) to 1,983.53. The Russell 2000 added 9.49
points (0.83%) to finish at 1,156.15, and the Wilshire 5000 closed 111.23
points (0.53%) higher at 20,972.80.
On the NYSE, 3.23 billion shares traded, with 2.2
declining issues for every advancing issue. On the NASDAQ, 2.76 billion shares
changed hands, advancers outnumbering decliners about 2 to 1.
The price of the 10-year
Treasury note rose 2/32, dropping its yield up to 2.463%. The price of the
30-year Treasury bond was up 4/32, with its year down to 3.253%.
| | Financial Sense | Examining Investment Share Classes | Choosing
the right share class needs careful consideration as the Department of Labor
(DOL) is paying more attention to investment menu options, experts say. Several
larger plans are being sued over costs of investment options. In Tibble vs. Edison, cited as a watershed
moment, the plan sponsor was found to have breached fiduciary responsibility
because it did not offer institutionally priced shares of a fund that were, in
fact, available. The curtain is gradually being pulled back on this practice,
according to Philip J. Koehler, chief executive of ERISA Fiduciary
Administrators. “It’s a key issue,” Koehler says. “You’d think highly
sophisticated managers and advisers would be more aware, but nevertheless,
high-priced, revenue-share classes wind up on investment lineups.” | | Small Talk | Work Not Just About the Paycheck | Just over half of Americans (51%) would continue to work, even if they did not need to financially. A new survey from CareerBuilder finds that not all people dream of hitting it big and leaving their offices behind. In fact, if they won the lottery, 30% of respondents to a recent CareerBuilder poll say they would even keep their current job. The two most common reasons to continue working, even though they did not have to, were: they would be bored if they didn’t work (77%) and work gives them a sense of purpose and accomplishment (76%). | ON THIS DATE: In 1885, just after completing his memoirs,
Civil War hero and former President Ulysses S. Grant died of throat cancer. In 1976, members of the American Legion
arrived in Philadelphia to celebrate the bicentennial of U.S. independence.
Soon after, many began suffering from a mysterious form of pneumonia. Their
ailment would come to be known as Legionnaires’ disease. In 1984, 21-year-old Vanessa Williams gave
up her Miss America title, the first resignation in the pageant’s history,
after Pen.thouse magazine announced plans to publish nu.de photos of the beauty
queen in its September issue. In 1988,
Guns N’ Roses’ first hit single, “Sweet Child O’ Mine,” entered the
Billboard Top 40.
Wednesday Wisdom: “The brain is a wonderful organ; it starts working the
moment you get up in the morning and does not stop until you get into the
office.” – Robert Frost
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