| 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 Research | 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 > |
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| 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%.
| | Compliance | 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 > | | Investing | 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 > | 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 > | News from PLANSPONSOR.com
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