Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 30th, 2015
Benefits & Administration
Five Components for Managing Health Care Costs
Joseph Berardo, CEO of MagnaCare, a Manhattan-based health plan administrator and provider for self-insured health plans, recommends five key components to positively impact the total cost of care. Self-insured health plans offer flexibility in plan design and the reduction of premium taxes that exist with fully insured benefits. “Right out of the gate, employers can save 4% to 6% without premium taxes,” Berardo tells PLANSPONSOR.Read more >
Ineligible Dependents Drive Up Health Benefits Costs
Up to 8% of the dependents enrolled in an employer’s medical plan are actually ineligible to receive benefits according to their plan’s own criteria, according to a research paper from Colonial Life & Accident Insurance Company, in partnership with the Government Finance Officers Association (GFOA). The study, “Controlling health-care costs with dependent eligibility audits,” cites research from the Kaiser Family Foundation and Mercer, which says employers pay an average of $3,500 annually to provide coverage for a single dependent.Read more >
EBSA Head Lisa Gomez Says DOL Continues Honing Retirement Security Rule
Data and Research
Early Withdrawals Found to Exacerbate 401(k) Account Disparities Across Race, Gender
Ask the Experts
Are Roth Excess Deferrals Taxed Twice?
The Social Security System Can Be Fixed
The Center for Retirement Research’s latest issue brief, “Social Security’s Financial Outlook: The 2015 Update in Perspective,” takes a deep dive into the Social Security Trustees’ latest report. The Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to be exhausted by 2034, with the Disability Insurance trust fund on scheduled to run out of money next year, in 2016, but the Center maintains that if legislators were to mandate a small increase in payroll tax contributions to the funds, Social Security could remain solvent for the foreseeable future.Read more >
Study Suggests Millennials Interested in Annuities
More than half (52%) of Millennials are very or somewhat interested in annuities, according to a survey by the Indexed Annuity Leadership Council. This indicates that the younger investor cohort is looking toward alternative retirement savings products, the Council said. Millennials said they are interested in annuities because they can help grow a retirement nest egg and provide long-term financial security.Read more >
Products, Deals & People
Plan sponsors looking for an adviser to support their retirement plan can visit the Employee Fiduciary adviser directory, which provides contact information, website, number of years in business and the credentials of all financial adviser partners who submitted their business listing. Each adviser’s compensation structures—fee-only, asset-based or fee-only (hourly), to name a few—are also detailed, as are services offered and plan sizes served.Read more >
Deloitte and Penbridge Expand Pension Services Partnership
Deloitte Consulting and Penbridge Advisors are expanding a strategic partnership established in 2014 to bring new defined benefit (DB) plan support services to market. According to the firms, the expanded partnership will focus on helping DB plan sponsors “make balanced, well-informed decisions, whether it involves plan maintenance or pension risk transfer.”Read more >
Transamerica Retirement Solutions has partnered with Progressive Employer Management Company (PEMCO) to offer multiple employer plan services. The two companies will handle all plan administration, including due diligence, plan compliance, testing, annual reporting, enrollment, education and assistance. The service is aimed at small plans.Read more >
Market Mirror

The Federal Reserve appears on track to raise interest rates later this year but signaled Wednesday that it wants to see further economic gains and higher inflation before doing so, the Associated Press reports. The Dow gained 121.12 points (0.69%) to finish at 17,751.39, the NASDAQ closed 22.53 points (0.44%) higher at 5,111.73, and the S&P 500 closed 15.32 points (0.73%) higher at 2,108.57. The Russell 2000 rose 5.00 points (0.41%) to 1,229.60, and the Wilshire 5000 increased 164.74 points (0.75%) to 22,192.39.

On the NYSE, 3.2 billion shares traded, with 2.6 advancing issues for every declining issue, and on the NASDAQ, 2.8 billion shares changed hands, with a roughly 1.2 to 1 ratio of advancers to decliners.

The price of the 10-year Treasury note decreased 10/32, bringing its yield up to 2.287%. The price of the 30-year Treasury bond fell 21/32, increasing its yield to 2.999%.

Small Talk
ON THIS DATE: In 1942, the WAVES were created by legislation signed by U.S. President Franklin D. Roosevelt. The members of the Women’s Accepted for Volunteer Emergency Service were a part of the U.S. Navy. In 1954, Elvis Presley made his professional debut in Memphis. It was his first concert to be advertised. In 1956, the phrase “In God We Trust” was adopted as the U.S. national motto. In 1965, President Lyndon B. Johnson signed into law Social Security Act that established Medicare and Medicaid. It went into effect the following year. In 1974, the U.S. House of Representatives Judiciary Committee voted to impeach President Nixon for blocking the Watergate investigation and for abuse of power. In 1998, a group of Ohio machine-shop workers (who call themselves the Lucky 13) won the $295.7 million Powerball jackpot. It was the largest-ever American lottery.
SURVEY SAYS: There has been much speculation and debate surrounding the fiduciary rule proposal—mostly due to the proposed change in adviser business practices and the new rules about IRAs. However, several commenters suggested the new rule could have an adverse effect on plan sponsors—especially smaller ones—and participants. This week, I’d like to know, are you worried about the effect the fiduciary rule could have on your retirement plan or its participants? You may respond to this week’s survey by 6 p.m. Pacific time today.Read more >
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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