Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 15th, 2015
Benefits & Administration
ESPPs Can Help Insulate Retirement Savings
Whatever a retirement plan’s stated goal, economic independence for participants is universally agreed upon. In this arena, though, many savers tend to be their future-selves’ own worst enemy. Spending on current wants often trumps future needs, and even the financially savvy are likely to be distracted by short-term goals such as home ownership and tuition savings. One way to address this is to align participants’ interests with the plan’s and, by extension, the company’s—by adding an employee stock purchase plan (ESPP).Read more >
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 >
GAO Requests
Survey of 401(k) Plans’ Use of Eligibility and Vesting Requirements: Building savings in a 401(k) plan is a key step to achieving income security in retirement for millions of Americans. That savings may be affected by the eligibility and vesting requirements that are used by many plans. The Government Accountability Office (GAO) is asking plan sponsors to participate in its survey examining why plan sponsors use certain eligibility and vesting requirements, how they may have changed the requirements, and how they communicate the rules to employees and participants.Read more >
Survey of Lifetime Income Options 401(k) Plan Sponsors Offer Participants: An increasing American lifespan in an era when the predominant workplace retirement plan no longer guarantees lifetime income calls into question how well 401(k) plans work for the oldest Americans. The GAO is asking plan sponsors to participant in a survey that examines the mechanisms in 401(k) plans that can provide some financial stability to participants until the end of their lives. It asks about the advantages and disadvantages of these options, education about them, and barriers that might limit their adoption.Read more >
Ask the Experts
Does the SECURE 2.0 Act Make 403(b) Plans More Like 401(k) Plans?
What Can Annuities Gain From Secure 2.0 Act?
25 States Bring Suit Against ESG Regulation
Products, Deals & People
SageView Advisory Group announced the opening of its newest location in Denver, Colorado. Wayne Roth, a recently hired retirement plan consultant, will set up shop in the firm’s Colorado office, where he will focus on providing quality retirement plan advisory services to fiduciaries of corporate and not-for-profit retirement plans.Read more >
Economic Events

The Producer Price Index (PPI) for final demand rose 0.5% in May. Final demand prices fell 0.4% in April and advanced 0.2% in March. In May, the index for final demand goods increased 1.3%. Prices for final demand services were unchanged.

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing starts for May. Thursday, the Labor Department will issue its initial claims report, and the Bureau of Labor Statistics will reveal the consumer price index (CPI) for May.

Market Mirror

U.S. stock indices closed lower Friday after a setback in talks between Greece and its creditors renewed fears that the country could default on its debts, according to the Associated Press. The Dow fell 140.53 points (0.78%) to 17,898.84, the NASDAQ decreased 31.41. points (0.62%) to 5,051.10, and the S&P 500 lost 14.68 points (0.70%) to finish at 2,094.18. The Russell 2000 was down 3.92 points (0.31%) at 1,265.01, and the Wilshire 5000 closed 136.36 points (0.61%) lower at 22,173.67.

On the NYSE, 3.2 billion shares traded, with 1.8 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares changed hands, with a 1.4 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note was down 4/32, increasing its yield to 2.392%. The price of the 30-year Treasury bond decreased 6/32, bringing its yield up to 3.106%.

WEEK’S WORTH: For the week ending June 12, the Dow gained 0.28%, the NASDAQ lost 0.34%, and the S&P 500 increased 0.06%. The Russell 2000 finished 0.32% higher, and the Wilshire 5000 was up 0.03%.

Business Leaders Warn of Fiduciary Rule Fallout
The Department of Labor’s (DOL) proposed fiduciary rule could discourage small business owners from offering simplified employee pension plans (SEP) and Savings Incentive Match Plan for Employees (SIMPLE)-type individual retirement accounts (IRAs), a new report from the U.S. Chamber of Commerce contends. The report, “Locked Out of Retirement: The Threat to Small Business Retirement Savings,” was written by Brad Campbell, counsel at Drinker Biddle & Reath LLP and former assistant secretary for employee benefits security at the DOL. Campbell notes that 99% of U.S. employers are small businesses, and that through SEP and SIMPLE-type IRA plans they have helped generate $472 billion in retirement savings for more than 9 million U.S. households.Read more >
From the Magazine
2015 PLANSPONSOR Service Stars
PLANSPONSOR’s 2015 Service Stars are individual retirement plan account representatives and relationship managers, plus one project manager, who, in the words of their plan sponsor clients, have demonstrated truly exemplary service over the past year.Read more >
Managed Accounts a Better QDIA?
Managed accounts are a better qualified default investment alternative (QDIA) than the other two options that the Department of Labor (DOL) permits—target-date funds (TDFs) and balanced accounts—Towers Watson contends in a new report. Managed accounts are customized for each participant and are built around their asset profiles and individual circumstances, according to “Are Managed Accounts a Better QDIA? Yes, But at What Cost?”Read more >
Defined contribution (DC) participant transfers in May averaged 0.031% of total balances daily, according to the Aon Hewitt 401(k) Index. Fixed-income trades elbowed equities, with 61% of trading days favoring fixed income.Read more >
Small Talk
ON THIS DATE: In 1667, Jean-Baptiste Denys administered the first fully-documented human blood transfusion. He successfully transfused the blood of a sheep to a 15-year old boy. In 1775, George Washington accepted an assignment to lead the Continental Army. In 1836, Arkansas became the 25th U.S. state. In 1846, representatives of Great Britain and the United States signed the Oregon Treaty, which settled a long-standing dispute with Britain over who controlled the Oregon territory. The treaty established the 49th parallel from the Rocky Mountains to the Strait of Georgia as the boundary between the United States and British Canada. The United States gained formal control over the future states of Oregon, Washington, Idaho, and Montana, and the British retained Vancouver Island and navigation rights to part of the Columbia River. In 1916, U.S. President Woodrow Wilson signed a bill incorporating the Boy Scouts of America.
SURVEY SAYS: Financial Education in the Workplace Last week, I asked NewsDash readers, “Does your firm provide employees with overall financial education, how is it provided and what do employees need most?” Slightly more than 43% of responding readers indicated their firms provide general financial education—other than about the retirement plan—to employees. Nearly 7% said they do not, but are considering doing so. Where general financial education is being provided, 13.3% reported it is provided by internal staff, 26.7% said it is provided by the firm’s retirement plan provider, 6.7% indicated it is provided by the firm’s retirement plan adviser, and 53.3% reported it is provided by a third-party financial education provider. More than half (53.3%) of responding readers said their firms deliver financial education via classes/seminars, and 60% through content on the company website or other Internet sites. Asked which financial education topic they feel their firm’s employees need most, 29.2% selected ‘budgeting,’ while 20.8% chose ‘saving for retirement.’ Among those who chose to leave comments about financial education in the workplace, most think it is a good idea, even if they think it is not the employer’s responsibility. A few noted what does and doesn’t work. Editor’s Choice goes to the reader who said, “After attending last week’s [PLANSPONSOR National] Conference, I think overall financial wellness would help everyone and am looking into implementing in the months to come.” A big thank you to all who participated in the survey!Read more >
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Copyright © Asset International, Inc., 2015.

All rights reserved.  No reproduction without prior authorization.

Editorial: Alison Cooke Mintzer


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