Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 24th, 2015
Benefits & Administration
From Where Will the Retirement Paycheck Come?
The legions of Baby Boomers approaching retirement is turning up the heat on the issue of ongoing income, especially to pay health care expenses in retirement, according to Cerulli Research. The July 2015 Cerulli Edge-Retirement Edition takes a look at how recordkeepers and plan sponsors can change plan participants’ perspectives, helping to de-emphasize investment return and think about potential income.Read more >
Social Security Gains a Year of Solvency
The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one year later than projected last year, according to the Social Security Board of Trustees annual report. The DI Trust Fund will become depleted in 2016, unchanged from last year’s estimate, with 81% of benefits still payable. The combined trust fund reserves are still growing and will continue to do so through 2019, the report says.Read more >
Vanguard Partners With Candidly For Student Loan Repayment Program
Data and Research
Retirement Security Is Higher for Veteran Teachers Than for New Entrants
The Role of Financial Wellness Amid Rising Inflation
Multiemployer Plan Sponsors Say Reform Is Helpful
Sixty-six percent of sponsors of multiemployer plans say the Multiemployer Pension Reform Act (MPRA) of 2014, which was passed on December 13, 2014 to help troubled multiemployer plans from becoming insolvent, will be somewhat, very or extremely helpful. According to a survey of 216 multiemployer plans that the International Foundation of Employee Benefit Plans conducted in May, 81% say that the Pension Benefit Guaranty Corporation (PBGC) premium increase from $12 per participant in 2014 to $26 in 2015 will be somewhat, very or extremely impactful.Read more >
More Employers Promoting Financial Wellness
Forty percent of companies now offer financial wellness programs, Alliant Credit Union found. The reason they are embracing these programs, Alliance says, is “businesses realize that helping their employees achieve and maintain financial well-being is a win-win for their people and their organizations. Financial stress has a significant impact on both the physical well-being of employees and their workplace productivity. This realization has led many HR executives to regard a financial wellness program as not only compassionate for employees, but as a sound investment for the company.” The most common component of a financial wellness program is retirement planning, cited by 65% of HR executives. This is followed by medical and health care cost-planning programs (52%).Read more >
Economic Events

In the week ending July 18, the advance figure for seasonally adjusted initial claims for unemployment insurance was 255,000, a decrease of 26,000 from the previous week’s unrevised level of 281,000, the Labor Department reported. This is the lowest level for initial claims since November 24, 1973, when it was 233,000. The four-week moving average was 278,500, a decrease of 4,000 from the previous week’s unrevised average of 282,500. 

The average interest rate for a 30-year fixed-rate mortgage is 4.04%, down from 4.09% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.21%, down from 3.25%.

Market Mirror

Major U.S. stock indices closed lower again Thursday as more disappointing earnings reports were announced. The Dow lost 119.12 points (0.67%) to finish at 17,731.92, the NASDAQ was down 25.36 points (0.49%) at 5,146.41, and the S&P 500 decreased 12.00 points (0.57%) to 2,102.15. The Russell 2000 fell 13.38 points (1.06%) to 1,244.97, and the Wilshire 5000 closed 133.72 points (0.60%) lower at 22,132.00.

On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, nearly 2.9 billion shares traded, with declining issues outnumbering advancing issues more than 2 to 1 on both exchanges.

The price of the 10-year Treasury bond increased 15/32, bringing its yield down to 2.269%. The price of the 30-year Treasury bond climbed 1 12/32, decreasing its yield to 2.969%.

GAO Request
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 >
From the Magazine
Insights: Consolidation Benefits
As I write this, we are sending out a special news alert about the latest recordkeeping consolidation move: OneAmerica is acquiring BMO’s Milwaukee-based business, BMO Retirement Services. This news is just the latest in a seemingly endless wave of recordkeeping consolidations. Consolidation in the recordkeeping industry is nothing new, and plan sponsors hopefully get better service and platforms because of it.Read more >
Small Talk

ON THIS DATE: In 1847, Mormon leader Brigham Young and his followers arrived in the valley of the Great Salt Lake in present-day Utah. In 1866, Tennessee became the first state to be readmitted to the Union after the U.S. Civil War. In 1911, American archeologist Hiram Bingham got his first look at Machu Picchu, an ancient Inca settlement in Peru that is now one of the world’s top tourist destinations. In 1982, “Eye Of The Tiger” from Rocky III topped the U.S. pop charts. In 1987, Hulda Crooks, at 91 years of age, climbed Mt. Fuji. Hulda became the oldest person to climb Japan’s highest peak. In 1998, Roy O. Disney received a star on the Hollywood Walk of Fame.


And now it’s time for FRIDAY FILES!

Famous Brands’ original names.Read more >
View the Great Barrier Reef, from the back of a turtle.Read more >

In Henrico County, Virginia, a man ordered some chicken at a Bojangle’s drive-thru, but when he received his order the chicken was cold. He asked the worker in the window to give him some fresh chicken and was told to pull aside as it would take six or seven minutes. After a while, a worker came out and handed him a bag, but when the man checked it, he didn’t find chicken; he found about $4,500 and some bank deposit slips. Thinking either he was being set up or that an employee was trying to steal the money, he went into the restaurant, asked for a manager and explained the situation. The manager’s response: “We would’ve called the authorities on you, too.” Afterward, the man said he was offered another meal and a tailgate party, but he called Bojangle’s corporate headquarters to report the manager’s nasty attitude and disrespect, and to ask for an apology.                      

In Spotswood, New Jersey, a man walked into a home through an open door while the homeowner was taking out the trash. And he stayed—for three days, under a bed in a spare bedroom. The third day, the homeowner heard a noise in the bedroom and went in to find the intruder. It wasn’t clear if or when the man planned to rob the home.

In Washingtonville, Pennsylvania, police were called about an agitated man making threats and driving a lawn mower along a road. Responding officers found a 25-year-old man who has had three drun.ken driving convictions in the last three years and whose license is suspended. He smelled of alc.ohol, had a box of under his armpit, and said he was driving his lawn mower to a friend’ house. The man became uncooperative and combative, threatening officers, during the arrest, according to The Daily Item, so he had to be secured with a rope.

In Winter Haven, Florida, a man got upset when the bus driver told him it would cost an extra $2 to travel to another stop. The man got off the bus, but a few minutes later, came back and began head butting the glass doors, shattering the glass and knocking himself out. Police said he eventually got up and ran off.Read more >

At Yellowstone National Park, a woman decided to take a selfie with a bison and her six-year-old daughter. They turned their back to the bison, but soon heard its footsteps coming their way. They ran, but the bison caught the mother on her right side, lifted her and tossed her with its head. CNN reports she was treated in the park’s clinic for minor injuries.

In Merseyside, U.K., a man told his wife that he stopped smoking after his doctor advised him to improve his lifestyle after he had a heart attack. But the wife got suspicious after he stormed out of the house when she confronted him over a stash of empty cookie wrappers in his car, TIME reports. Hearing that Google’s Street View car had been to her street that week, the wife went online and found an image of her husband smoking in the driveway.

In Covington, Kentucky, the U.S. 6th Circuit Court of Appeals has determined you have no right to privacy if you pocket dial someone and they listen in, or even record the call. The Consumerist reports that a firm’s former board chairman tried to call his executive assistant, but didn’t reach her, so he put his phone in his pocket, which dialed her number. When she answered, she heard her boss and the board’s vice chairman talking about replacing the then-CEO. Thinking they were discussing how to unlawfully discriminate against the CEO, the executive assistant recorded the conversation and turned it in to other members of the board. The former chairman sued her for violating a federal wiretap act. But, both a district court and the appellate court ruled that the former chairman did not have a reasonable expectation of privacy. The appellate court judge likened it to a homeowner opening the curtains of a home: “[E]xposure need not be deliberate and instead can be the inadvertent product of neglect. Under the plain-view doctrine, if a homeowner neglects to cover a window with drapes, he would lose his reasonable expectation of privacy with respect to a viewer looking into the window from outside of his property…the doctrine applies to auditory as well as visual information.”

Have a happy weekend, everyone!
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 >

Editorial: Alison Cooke Mintzer


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