Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 28th, 2015
Benefits & Administration
Match Contributions Boost Savings and Engagement
Retirement plan sponsors need to fully understand the power of making a match contribution and how it can boost participants’ engagement in the plan, says Hearts & Wallets. An employer-sponsored retirement plan match contribution can more than double average annual plan participant savings, especially for moderate-income households, according to a Hearts & Wallets study.Read more >
From the Magazine
Six Steps for Improving Plan Committee Governance
For many 401(k) plan committees, improving their governance process starts with the basics of knowing what they need to do, and why. Sources talked about six things committees can do to improve their governance.Read more >
MOST READ ARTICLES
1
What Participants Want From Employers’ Retirement Plan Websites
2
2021 Recordkeeping Survey
3
DOL’s Next Moves
4
Allowing for After-Tax Contributions in a 401(a) Plan
5
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
Economic Events
New orders for manufactured durable goods in June increased $7.7 billion or 3.4% to $235.3 billion, the U.S. Census Bureau announced. This increase, up following two consecutive monthly decreases, followed a 2.1% May decrease. Excluding transportation, new orders increased 0.8%. Excluding defense, new orders increased 3.8%. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $6.4 billion or 8.9% to $78.4 billion.
Market Mirror

Stocks fell broadly around the globe on Monday, a reaction to a steep drop in the Chinese market overnight, according to the Associated Press. The Dow closed 127.94 points (0.73%) lower at 127.94, the NASDAQ fell 48.85 points (0.96%) to 5,039.78, and the S&P 500 was down 12.01 points (0.58%) at 2,067.64. The Russell 2000 lost 11.30 points (0.92%) to finish at 1,214.69, and the Wilshire 5000 decreased 145.08 points (0.66%) to 21,761.67.

On the NYSE, 3.2 billion shares changed hands, with 2.6 declining issues for every advancing issue. On the NASDAQ, nearly 2.9 billion shares traded, with a more than 2 to 1 lead for decliners.

The price of the 10-year Treasury note was up 13/32, decreasing its yield to 2.219%. The price of the 30-year Treasury bond increased 19/32, bringing its yield down to 2.933%.

Sponsored message from Charles Schwab
“The unique value of Target-Date Funds” from Charles Schwab Investment ManagementRead more >
Compliance
Judge Finds Halt to Union Plan Contributions Unlawful
National Labor Relations Board Administrative Law Judge Kenneth W. Chu has ruled that StaffCo of Brooklyn violated the National Labor Relations Act when it refused to maintain the status quo with respect to the terms and conditions of employment by failing to contribute to the New York State Nurses Association (NYSNA) Pension Plan after the expiration of a collective bargaining agreement (CBA). Wu cited a previous Board decision in finding that it is clear the pension plan benefits “. . . are a term and condition that survive the expiration of the collective-bargaining agreement and are a mandatory subject of bargaining that an employer cannot alter without providing the union an opportunity to bargain.”Read more >
No Individual Harm, No Claim Against Pension Plan
The 3rd U.S. Circuit Court of Appeals has determined Jeffrey Perelman has no standing to sue his father, Raymond Perelman, under Section 502(a)(3) of the Employee Retirement Income Security Act (ERISA) because claims demanding a monetary equitable remedy require the plaintiff to allege an individualized financial harm traceable to the defendant’s alleged ERISA violations. Jeffrey Perelman is a participant in the defined benefit (DB) plan of General Refractories Company (GRC). He alleges that his father, as trustee of the plan, breached his fiduciary duties by covertly investing plan assets in the corporate bonds of struggling companies owned and controlled by Jeffrey’s brother, Ronald Perelman. Jeffrey contends that these transactions were not properly reported; depleted plan assets; and increased the risk of default, such that his own defined benefits are in jeopardy.Read more >
Investing
TDF Customization Adds Considerable Complexity
A white paper from J.P. Morgan suggests custom target-date strategies can add real value to retirement plans, but the complexity of customization can quickly overwhelm the upside. Penned by Daniel Oldroyd, head of target-date strategies and multi-asset solutions for J.P. Morgan Asset Management, the report warns plan sponsors and financial advisers not to shoulder more than they can carry when implementing a custom target-date fund (TDF) series. Especially in the small plan market segment, the significant resources and expertise needed to effectively manage custom investment options can seriously strain plan fiduciaries.Read more >
Small Talk

ON THIS DATE: In 1868, following its ratification by the necessary three-quarters of U.S. states, the 14th Amendment, guaranteeing to African Americans citizenship and all its privileges, was officially adopted into the U.S. Constitution. In 1914, one month to the day after Archduke Franz Ferdinand of Austria and his wife were killed by a Serbian nationalist in Sarajevo, Austria-Hungary declared war on Serbia, effectively beginning World War I. In 1951, the Walt Disney film “Alice in Wonderland” was released.

 

TUESDAY TRIVIA: There is no lead in the writing core of a “lead” pencil. The core is made of non-toxic graphite and does not contain lead.

TRIVIAL PURSUITS: What does No. 2 mean on a No. 2 pencil?Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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