| Benefit Briefs | Current Guidelines for Electronic Communications | The Employee Retirement Income Security Act
(ERISA) requires multiple disclosures of information about retirement plans to
participants on a regular basis, a key protection of the act. But, the time and
expense of doing so make electronic delivery a good option. Electronic delivery
can be a boon, as long as plan sponsors follow the rules. Email and other
electronic methods can simplify the disclosure process, provide a more reliable
way to deliver information and possibly even reduce administration costs for
the plan over time. Provided the plan sponsor meets the proper requirements,
almost all notices and statements can be delivered to participants
electronically, according to Andrew Miller, director of retirement services at
the Principal Financial Group. | Public Sector More Retirement Confident | More than two-thirds of state and local public
workers polled expressed confidence they would have enough money to live
comfortably in retirement. According to a survey from The Pew Charitable
Trusts, 69% of public employees said they were very or somewhat confident they
would have enough money to live comfortably in retirement, compared with 55% of
Americans surveyed for the Employee Benefit Research Institute’s (EBRI) 2014
Retirement Confidence Survey. State and local employees said retirement plan
design affects decisions about when to stop working. | | Buyer's Market | Published every June, the PLANSPONSOR
Recordkeeping Survey is now available in print. It consists of 16 pages of
comparative client profile, market share and product data for 75 providers of
defined contribution recordkeeping services. | Helping DC Plans Improve Investment Outcomes | A manager of managers approach may help defined
contribution (DC) plan sponsors offer more diversified investment options to
participants without overwhelming them with too many options or increasing
costs. A manager of managers’ fund aims to achieve its objectives by selecting
differentiated managers and giving them a mandate to make investment decisions
on behalf of the fund. The rationale is diversification and balance can be
better achieved by allocating assets to more than one manager, each with a
distinct style. The manager of managers role is to select the managers, monitor
performance and risk, and alter the composition of the fund to adapt to market
conditions. Scott Brooks, head of defined contribution at SEI, explains the
concept. | RiversEdge Advanced Retirement Solutions
announced its mobile application is now available to retirement plan
participants whose accounts are recordkept by the company. RIVERSEDGE MOBILE
gives participants the ability to check account balances, view investment
options, monitor their account’s investment performance, track contributions
and review account transactions. | | Economic Events | In the week ending June 28, the advance
figure for seasonally adjusted initial claims for unemployment insurance was
315,000, an increase of 2,000 from the previous week’s revised level. The
previous week’s level was revised up by 1,000 from 312,000 to 313,000. The four-week
moving average was 315,000, an increase of 500 from the previous week’s revised
average. The previous week’s average was revised up by 250 from 314,250 to
314,500.
Total nonfarm payroll employment
increased by 288,000 in June, and the unemployment rate declined to 6.1%,
according to the Bureau of Labor Statistics. Job gains were widespread, led by
employment growth in professional and business services, retail trade, food
services and drinking places, and health care.
The average interest rate for a 30-year
fixed-rate mortgage is 4.12%, down from 4.14% one week ago, according to
Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is
3.22%, unchanged from one week ago.
THE
ECONOMIC WEEK AHEAD: Thursday,
the Labor Department will issue its initial claims report, and the Census
Bureau will report about wholesale inventories for May.
| | Market Mirror | Last Thursday, the Dow finished 92.02
points (0.54%) higher at 17,068.26, the NASDAQ increased 28.19 points (0.63%)
to 4,485.93, and the S&P 500 was up 10.82 points (0.55%) at 1,985.44. The
Russell 2000 climbed 8.65 points (0.72%) to 1,208.15, and the Wilshire 5000
gained 110.43 points (0.53%) to close at 21,107.54.
On the NYSE, 3.2 billion shares changed
hands, with 1.3 advancing issues for every declining issue. On the NASDAQ, 2.7
billion shares traded, with a more than 2 to 1 lead for advancers.
The price of the 10-year Treasury note
was down 3/32, bringing its yield up to 2.638%. The price of the 30-year
Treasury bond decreased 6/32, increasing its yield to 3.471%.
WEEK’S
WORTH: For the week ending July 3, the Dow finished
1.28% higher, the NASDAQ climbed 2.00%, and the S&P 500 increased 1.25%.
The Russell 2000 gained 1.57%, and the Wilshire 5000 was up 1.25%.
| | Rules & Regulators | Pre-Approved 403(b) Document Program Furthers Uniformity | 403(b) plan documents currently may be presented
in a myriad of forms, but pre-approved prototype plans are coming, which will
provide some uniformity, notes Barbara J. Webb of PenServ Plan Services, Inc. Webb,
director of technical services at the Horsham, Pennsylvania-based firm, told
attendees of the National Tax-deferred Savings Association’s (NTSA) 2014 403(b)
Summit, just like other qualified plan types, 403(b)s will have a restatement
period every six years, and even non-Employee Retirement Income Security Act
(ERISA) 403(b)s will be subject to the amendment requirements. Plan sponsors
will no longer have the option of having “specimen plans”—typically, documents
that were offered as a model, or to give a gist, of how the plan works, and
that were signed off on by plan sponsors’ attorneys. | | Financial Sense | New Mortality Tables Will Impact Pension Management | Wilshire Consulting estimates defined benefit
pension plan liabilities will increase between 3% to 8% in total for most plans
when they move to new Society of Actuaries mortality tables. When the impact of
improved mortality is adopted by the Internal Revenue Service (IRS), the result
will be lower funded ratios and higher minimum required contributions. Wilshire
notes many corporate pension plan sponsors have adopted funded ratio based
de-risking glide paths. The liability used to calculate the funded ratio is
often the Projected Benefit Obligation (PBO) or balance sheet liability. As a
result of the mortality assumption change, the funded ratio used to determine
the asset allocation will decrease and may indicate that an alternative, most
likely higher risk, asset allocation is appropriate. | Banks Ask to Continue Managing Pension Assets | BNP Paribas and Credit Suisse, which have each
pled guilty to U.S. criminal charges, are asking to be able to keep managing
U.S. pension plan assets. The banks have applied for an exemption that would
enable them to keep their status as qualified professional asset managers
(QPAMs). The QPAM Exemption allows the manager to engage in transactions with
parties in interest with respect to the plan without running afoul of the
prohibited transaction restrictions of the Employee Retirement Income Security
Act (ERISA) or the Internal Revenue Code. It contains an anti-criminal rule
that requires that neither the QPAM nor any of its affiliates have been
convicted of a variety of crimes within 10 years immediately prior to the
transaction. | | Small Talk | ON THIS DATE: In 1846,
U.S. annexation of California was proclaimed at Monterey after the surrender of
a Mexican garrison. In 1865, Mary
Surratt was executed by the U.S. government, accused of being a conspirator in
Abraham Lincoln’s assassination. She was the first woman executed by the U.S.
federal government. In 1930,
construction of the Hoover Dam began. In 1949,
“Dragnet” was first heard on NBC radio. In 1976, for the first time in history, women were enrolled into the
United States Military Academy at West Point, New York. In 1981, President Ronald Reagan nominated Sandra Day O’Connor, an
Arizona court of appeals judge, to be the first woman Supreme Court justice in
U.S. history. | 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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