Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 8th, 2015
Benefits & Administration
Nuances of 403(b) Plan Investment Menus
It’s not the only corner of the retirement planning market impacted by misunderstandings and half-truths, but managing 403(b) plan investment menus effectively requires some serious know-how. Historically bound to purchasing individual annuity contracts, today ERISA 403(b) plans can still be set up as individual annuity contracts through an insurance company, but there are other forms the plans can take under the reformed IRS regulations.Read more >
The funded status of U.S. pension plans improved in the second quarter of 2015, with the deficit declining by $81 billion for the quarter, according to an analysis by Aon Hewitt.Read more >
Are Retirement Savings Rates Reined by Limits?
Perhaps people are being reined in from saving as much as they’d like by the current contribution limits on 401(k) plans, if they are even aware of the limits in the first place. “Do Catch-Up Contributions Increase 401(k) Saving?,” from the Center for Retirement Research at Boston College, seeks to explore savings behaviors and how many retirement plan participants in 401(k) plans actually save the maximum amount allowed.Read more >
The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies improved by 1% to 84% as of June 30, according to Mercer. Increases in interest rates used to calculate corporate pension plan liabilities made up for poor equity market performance, Mercer said.Read more >
Multiemployer Health Plans Have Cost Savings Options
In the five years since the Patient Protection and Affordable Care Act (ACA) became law, many multiemployer health plan sponsors have implemented cost-containment strategies. A study of multiemployer health plan clients by Segal Consulting revealed the most popular cost-management strategies that plans have implemented are soliciting competitive bids from carriers/vendors (40%), implementing more intensive pharmacy management programs (34%) and increasing copayments (32%). “The study suggests plan sponsors have additional options and opportunities for managing the high cost of health care beyond increasing participant cost sharing,” says Andrew Sherman, senior vice president at Segal.Read more >
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Nearly one-quarter, 23%, of employees feel “high” or “overwhelming” financial stress, up from only 18% in 2012 and 19% in 2011, according to a survey by Financial Finesse, a provider of financial education to workers. Employers have a role in helping people with financial stress as well, says Liz Davidson, chief executive officer of Financial Finesse. They can offer financial wellness programs to teach their workers practical money skills.Read more >
Ask the Experts
Can the 403(b) 15-Year Catch-Up Be Phased Out?
“I just read the June 30th Ask the Experts Column about 15-year catch-up, and had a question about the final paragraph of the article. Would not the “phasing out” of a catch up election, where existing users are permitted to exhaust the catch-up but new elections would be prohibited, violate universal availability?”Read more >
Sponsored message from PLANSPONSOR
PLANSPONSOR’s 2015 Recordkeeping Survey
Our 2015 Recordkeeping Survey profiles 66 providers seeking to capture sponsor attention with the right balance of value and service.Read more >
Products, Deals & People
Too much time is spent on fees, funds and fiduciary, and not enough on the point of a retirement plan: how successfully participants retire, says RPA’s Todd Timmerman. Todd Timmerman was managing director of Principal Financial Group for almost 27 years, but he has founded a new firm, Retirement Plan Analytics (RPA), where he is managing director. RPA, a newly formed retirement plan advisory and consulting firm based in Charlotte, North Carolina, serves nonprofits, such as ministries and faith-based organizations; professional groups, including organizations for doctors, lawyers and dentists; and businesses in a range of industries.Read more >
John Hancock Cuts Investment Expenses Again
John Hancock Investments announced a sweeping package of expense reductions on a broad range of funds that together represent more than $36 billion in assets under management. Reductions of up to 26 basis points or up to 38% per fund vary by fund and result from a combination of direct cuts, contractual expense caps, new breakpoints, and growing economies of scale, the firm says.Read more >
Market Mirror

U.S. stock indices ended higher as investors wait to see what happens at a summit meeting of European leaders to discuss Greece’s strained finances, according to the Associated Press. The Dow increased 93.33 points (0.53%) to 17,776.91, the NASDAQ was up 5.52 points (0.11%) at 4,997.46, and the S&P 500 gained 12.58 points (0.61%) to finish at 2,081.34. The Russell 2000 ticked up 1.09 points (0.09%) to 1,248.05, and the Wilshire 5000 closed 124.41 points (0.57%) higher at 21,994.39.

On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, 2.9 billion shares traded, with 1.4 advancing issues for every declining issue on both exchanges.

The price of the 10-year Treasury note was up 10/32, decreasing its yield to 2.253%. The price of the 30-year Treasury bond increased 31/32, bringing its yield down to 3.034%.

Small Talk

ON THIS DATE: In 1776, Colonel John Nixon gave the first public reading of the U.S. Declaration of Independence to a crowd at Independence Square in Philadelphia. In 1865, C.E. Barnes patented the machine gun. In 1889, the Wall Street Journal was first published. In 1969, the U.S. Patent Office issued a patent for the game “Twister.” In 1972, the song “Lean On Me” began its first stay at No. 1 on the pop charts.                                     

 

WEDNESDAY WISDOM: “If you don’t have time to do it right, when will you have time to do it over?”—John Wooden, basketball coach

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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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