| Benefit Briefs | Employee Stock Purchase Plans Increasing in Importance | Employee stock purchase plans (ESPPs) are
increasing in importance when it comes to employee retention and recruiting, finds
a study from Fidelity Investments. When asked about the importance of company
stock plans as part of their compensation and benefits package, 86% of
respondents younger than 40 say they would want their new employer to offer a
company stock plan if they changed jobs. In addition, 40% of all respondents
consider a company stock plan as a must-have when making a decision to change
employers, and more than one-third of respondents (37%) say giving up their
ESPP would make it harder for them to leave their current job. | Lockheed Martin will freeze its salaried defined
benefit (DB) pension plan and transition employees to an enhanced defined
contribution (DC) retirement plan. When the freeze is complete, the majority of
Lockheed Martin salaried employees, including approximately 25,000 not in the
pension plan, will have transitioned to a DC retirement plan that offers up to
10% of employees’ salary annually in company contributions. | Perceived Expense Stops Many from Seeking Advice | A recent survey report from American United Life
Insurance Company (AUL), a OneAmerica company, tells a conflicted story about
workplace retirement investors. Twenty-three percent of respondents were not
sure why they do not work with a financial professional. Others said they
prefer to make their own decisions (24%), or they feel financial professionals
are too expensive to hire (23%). Investors younger than 50, as well as those
with household incomes less than $75,000, are the most likely to go it alone. | | Industry Voices | Insights: Are We Missing the TDF Point? | One of the issues raised most commonly when
comparing target-date fund suites relates to the composition of a fund when it
hits the “date” in the name—e.g., the asset allocation in the year 2020 for a
2020 fund. As an industry, we have taken to distinguishing these funds by
whether they go “to” or “through” retirement. Does the fund manager stop
changing allocations at that date—to—or continue the glide path
after—through—and come to rest at some later point? Is one better than the
other? Fund
managers obviously think so. However, as to which is correct, I just can’t seem to
agree that one approach is “better” than the other for all participants of every
age group and risk preference. | | Economic Events | New orders for manufactured goods in May, down
following three consecutive monthly increases, decreased $2.6 billion or 0.5%
to $497.7 billion, the U.S. Census Bureau reported. This followed a 0.8% April
increase. Excluding transportation, new orders decreased 0.1%. | | Market Mirror | Wednesday, the Dow ticked up 20.17
points (0.12%) to 16,976.24, the NASDAQ decreased by 0.92 (0.02%) to 4,457.73,
and the S&P 500 increased by 1.30 (0.07%) to 1,974.62. The Russell 2000
fell 6.45 points (0.53%) to 1,199.50, and the Wilshire 5000 closed 11.75 points
(0.06%) lower at 20.997.11.
On the NYSE, 3.2 billion shares traded,
with 1.7 declining issues for every advancing issue. On the NASDAQ, 2.7 billion
shares changed hands, with a 1.2 to 1 ratio of decliners to advancers.
The price of the 10-year Treasury note decreased
17/32, and the price of the 30-year Treasury bond fell 1 4/32, bringing their
yields up to 2.627% and 3.461%, respectively.
| | Rules & Regulators | Same-Gender Partnerships Now Marriages in Washington State | Referendum 74, passed in November 2012, updated Washington
State law so that any state registered same-gender domestic partnership in
Washington State where neither party is 62 years of age or older, was
automatically converted into a marriage as of June 30, 2014, unless dissolved
or converted to marriage prior to that date. According to an alert from law
firm Davis Wright Tremaine, this will impact retirement plans, beneficiary
designations and health care plans. | Navigating the DOL Audit Process | Of the 3,677 Department of Labor (DOL) qualified
retirement plan audit investigations closed in 2013, violations were found in
nearly three-quarters of them. DOL investigators also closed some 320 criminal
investigations in 2013, securing 88 indictments and 70 guilty pleas or
convictions. For plan sponsors, the settlements for plan-related criminal cases
and violations, taken together, cost a collective $1.7 billion in plan
reimbursements and fines last year alone. Bruce Ashton, an attorney with
Drinker Biddle & Reath LLP’s Employee Benefits and Executive Compensation
Practice Group in Los Angeles, says those numbers contain a clear message for
plan fiduciaries and financial advisers working with retirement plans: The best
way to survive a plan audit unscathed is to avoid an audit in the first place.
And once an audit is triggered, only the most carefully governed plans can expect
a clean bill of health. | | Financial Sense | The funded status of corporate defined benefit
(DB) plans in the United States increased to 92% during June, with liabilities
decreasing 0.2% during the month. The BNY Mellon Institutional Scorecard for
June shows assets at the typical corporate plan rose 1.4%. Year-to-date, the
funded status of corporate plans is down 3.2 percentage points, according to
the scorecard. | | The World at Large | “It is important to understand the needs of your
employees, which benefits are most valuable, particularly for different groups,
and integrate that into the reward strategy,” says Ben Marks, L’Oreal’s HR
compensation and benefits director. “There are issues of fairness in scheme design and
that informs the pension strategy and the reward strategy.” He argues
significant contributions must go hand in hand with effective investment
platforms, with the requirement for fairness extending to the design of
investment options. | | Small Talk | ON THIS DATE: In 1775,
George Washington rode out in front of the American troops gathered at
Cambridge common in Massachusetts and drew his sword, formally taking command
of the Continental Army. In 1863, on
the third day of the Battle of Gettysburg, Confederate General Robert E. Lee’s
last attempt at breaking the Union line ended in disastrous failure, bringing
the most decisive battle of the American Civil War to an end. In 1890, Idaho was admitted to the union,
becoming the 43rd state. In 1922,
“Fruit Garden and Home” magazine was introduced. It was later renamed
“Better Homes and Gardens.” In 1930,
the U.S. Congress created the U.S. Veterans Administration. In 1934, the U.S. Federal Deposit
Insurance Corporation (FDIC) made its first payment to Lydia Losiger. In 1940, Bud Abbott and Lou Costello
debuted on NBC radio. In 1962,
Jackie Robinson became the first African American to be inducted into the
National Baseball Hall of Fame. In 1969,
Rolling Stones guitarist Brian Jones was found dead of an apparent accidental
drowning. In 1971, Jim Morrison died
of heart failure in a bathtub in Paris. In 2012,
Andy Griffith, famous for his role as the good-hearted, small-town sheriff of
fictional Mayberry, North Carolina, on the iconic 1960s TV sitcom “The
Andy Griffith Show,” died at age 86 at his North Carolina home. | SURVEY SAYS REWIND: Five
years ago we asked NewsDash readers, “What famous American documents have you
read?” | Share the good news with a friend! Pass the Dash along – and tell your
friends/associates they can sign up for their own copy. | News from PLANSPONSOR.com
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