Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 10th, 2014
Benefit Briefs
Taxes a Surprise Expense in Retirement
Retirees significantly underestimated the impact taxes would have on them during retirement years, according to a recent Lincoln Financial Group survey. When asked what they expected their top expenses to be before they retired, the majority of retirees surveyed for the 2013 — Expense Challenges of Age 62-75 Retirees survey anticipated home and mortgage, health care and travel/leisure to be the most significant expenses during retirement. However, these retirees found their actual top expenses included taxes, rather than health care.
Changing View of Retirement Calls for Changed Planning
A new definition of retirement means advice and education cannot be just about accumulating a certain amount of savings. Nearly three out of four (72%) pre-retirees older than 50 say their ideal retirement will include work—often in new, more flexible and fulfilling ways, a study from Merrill Lynch finds.
Buyer's Market
Mercer Launches Health Care Reform Portal
Consulting firm Mercer has launched an online portal offering insights about what health care reform changes mean to employers and employees. The portal, Mercer/Signal: U.S. Health Care Reform, features Mercer’s own research and observations, and will draw content from a wide range of other sources, with commentary added by Mercer’s experts. Content will be updated daily. While visitors to the portal are asked to register, there is no charge to use the portal’s features.
Market Mirror
Yesterday, the Dow was up 18.82 points (0.11%) at 16,943.10, the NASDAQ closed 14.84 points (0.34%) higher at 4,336.24, and the S&P 500 increase by 1.83 (0.09%) to 1,951.27. The Russell 2000 climbed 10.67 points (0.92%) to 1,175.88, and the Wilshire 5000 inched up 35.74 points (0.17%) to 20,697.60. On the NYSE, 3.2 billion shares changed hands, with 1.6 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 30-year Treasury note was down 6/32, bringing its yield up to 2.611%. The price of the 30-year Treasury bond decreased 7/32, increasing its yield to 3.447%.
Rules & Regulators
PSNC 2014: Washington Update
The Department of Labor (DOL) has increased full-scope audits of retirement plans, said Lisa Barton, a partner with Morgan, Lewis & Bockius. “Now it’s not a question of if you will get audited, but when,” Barton told attendees of the “Washington Update” panel at the PLANSPONSOR National Conference in Chicago. In the event of an audit, be responsive, cooperative and ask questions to find out the exact reason why you are being audited, said David Levine, a principal with Groom Law Group.
Industry Groups Urge PBGC to Rethink Shutdown Enforcement
Several industry groups have expressed concern about the Pension Benefit Guaranty Corporation’s (PBGC) enforcement approach with companies that have operations shut down. In a letter to PBGC board members, the groups contend enforcement actions with respect to Employee Retirement Income Security Act (ERISA) Section 4062(e) is not consistent with the law, and that is adversely affecting critical business transactions needed for companies to recover. “The enforcement is costing businesses hundreds of millions of dollars, diverting assets from business investments and jobs. Even worse in some cases, the PBGC’s actions are preventing important business transactions from occurring at all, stopping companies from selling unneeded or unprofitable facilities and from achieving efficiencies by consolidating operations.
Financial Sense
80% of DB Sponsors Interested in Risk Transfer
Eight in 10 defined benefit (DB) plan sponsors expressed interest in pension risk transfer products. A survey by the LIMRA Secure Retirement Institute found, of the nearly 400 DB plan sponsors surveyed, one in five were unfamiliar with pension risk transfer products, and another 50% were only somewhat familiar with pension risk transfer products. Plan sponsors more familiar with the products were more interested in them, as were plan sponsors with frozen DB plans.
Small Talk
ON THIS DATE:  In 1692, in Salem Village in the Massachusetts Bay Colony, Bridget Bishop, the first colonist to be tried in the Salem witch trials, was hanged after being found guilty of the practice of witchcraft. In 1752, Benjamin Franklin flew a kite during a thunderstorm and collected a charge in a Leyden jar when the kite was struck by lightning, enabling him to demonstrate the electrical nature of lightning. In 1935, in New York City, two recovering alco.holics, one a New York broker and the other an Ohio physician, founded Alco.holics Anonymous, a 12-step rehabilitation program. In 1940, after withholding formal allegiance to either side in the battle between Germany and the Allies, Benito Mussolini, dictator of Italy, declared war on France and Great Britain. In 1944, 15-year-old Joe Nuxhall became the youngest person ever to play Major League Baseball when he pitched in a game for the Cincinnati Reds.   TUESDAY TRIVIA: According to Census Bureau data, in 2013 there were about 214,000 married fathers with children younger than 15 who remained out of the labor force for at least one year primarily to care for the family while their wives worked outside the home. These fathers cared for about 434,000 children.
TRIVIAL PURSUITS: The annual celebration of Father’s Day was made official more recently than you may think.  Do you know when?
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News from   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
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Editorial: Alison Cooke Mintzer


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