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| Economic Events | |
| In March, private employers spent an average of $31.65 on compensation, according to the Bureau of Labor Statistics. Health insurance was the largest individual employer benefit cost at $2.43, accounting for 7.7% of total compensation costs. Retirement and savings benefits averaged $1.31 (4.1%). | |
| Market Mirror | |
Wednesday, the Dow gained 236.36 points (1.33%) to finish at 18,000.40, the NASDAQ closed 62.82 points (1.25%) higher at 5,076.69, and the S&P 500 increased 24.73 points (1.19%) to 2,104.88. The Russell 2000 climbed 17.25 points (1.38%) to 1,266.91, and the Wilshire 5000 was up 252.64 points (1.15%) at 22,267.24. On the NYSE, 3.2 billion shares traded, and on the NASDAQ, nearly 2.8 billion shares changed hands, with 2.6 advancing issues for every declining issue on both exchanges. The price of the 10-year Treasury note decreased 13/32, bringing its yield up to 2.486%. The price of the 30-year Treasury bond fell 27/32, increasing its yield to 3.214%. | |
| Compliance | |
| Court Revives Case Over Transfers to Cash Balance | |
| The 4th U.S. Circuit Court of Appeals has determined that participants in Bank of America’s cash balance plan still have a claim for relief for illegal transfers of their 401(k) account balances to the cash balance plan. The appellate court first determined that the plaintiffs had standing to sue under Employee Retirement Income Security Act (ERISA) Section 502(a)(3), which provides that a plan beneficiary may obtain “appropriate equitable relief” to redress “any act or practice which violates” ERISA provisions contained in a certain subchapter of the United States Code. The court found that the transfers violated ERISA’s anti-cutback provisions, as determined by the Internal Revenue Service (IRS) during a plan audit, and that the relief the plaintiffs are seeking—the profits Bank of America made from the assets transferred—is “appropriate equitable relief.”Read more > | |
| The U.S. Department of Labor (DOL) is suing Gruber Systems Inc. and its CEO to recover more than $2.6 million in losses suffered within the company’s employee stock ownership plan (ESOP). The DOL alleges the manufacturer knowingly bought over-valued company stock within the ESOP—and that the firm’s CEO, John Hoskinson, drove money into the ESOP not for the exclusive economic benefit of plan participants, but instead to support the stock price of the financially distressed company.Read more > | |
| From the Magazine | |
| Insights: Conflicted | |
| The Department of Labor (DOL)’s new “conflict of interest” rule—or, more colloquially, its fiduciary redefinition—is finally out. That the rule is five years in the making—the DOL first proposed a change to the fiduciary definition in 2010—should have given me ample time to determine what side of the fence I’d be on, so to speak. Although I know my position generally, as I continue to read and reread the rule text, I find it has many nuances on which I’ve yet to figure out my stance—which makes me wonder how others are so completely for or completely against the proposal.Read more > | |
| Barry’s Pickings: Your Conflict, My Synergy | |
| The Department of Labor (DOL)’s “conflicted advice” regulation reminds me of the federal government’s antitrust crusades against Microsoft and IBM. One view of business is that every firm wants to create a monopoly—otherwise known as a competitive advantage. I like Warren Buffett’s phrase: Firms strive to create “economic moats.” This idea goes back to economist Joseph Schumpeter. Sometimes, the federal government—egged on by the moat-creators’ competitors—believes it’s necessary and even virtuous to attack these moats.Read more > | |
| Small Talk | |
| ON THIS DATE: In 1776, the Continental Congress selected Thomas Jefferson of Virginia, John Adams of Massachusetts, Benjamin Franklin of Pennsylvania, Roger Sherman of Connecticut and Robert R. Livingston of New York to draft a declaration of independence. In 1949, Hank Williams, Sr., made his Grand Ole Opry debut. In 1979, John Wayne, an iconic American film actor famous for starring in countless westerns, died at age 72 after battling cancer for more than a decade. | |
| SURVEY SAYS: We recently covered a Virgin Pulse survey that indicated the majority of employers include a financial component in their workplace wellness programs. This week, I’d like to know, does your firm provide employees with overall financial education, how is it provided and what do employees need most? You may respond to this 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 > | |
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com
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