Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 15th, 2016
Benefits & Administration
State Pensions Have Undergone Many Changes
The period between 2009 and 2014 marked the greatest period of change in the history of public pensions, according to a new report from the National Association of State Retirement Administrators (NASRA), “Significant Reforms to State Retirement Systems.” Following the Great Recession of 2008, nearly every state reduced benefits, increased employee contributions, or both.Read more >
Ask the Experts
Must Participants Loan Be Paid Upon Termination?
“Our recordkeeper insists that the final loan regulations require repayment of the loan upon termination of employment, but I have argued with them that this is not the case. Is the recordkeeper correct, or am I correct?”Read more >
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TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
Products, Deals and People
Mercer has revamped its participant education site, Mercer BenefitsU, the online “university” for employee overall well-being. Mercer BenefitsU delivers highly relevant education within a fun, dynamic learning environment and features a robust curriculum of videos, interactive quizzes, articles and slideshows.Read more >
Economic Events

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for April, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,290.2 billion, up 0.9% from March, but down 1.3% from April 2015.  

Avance estimates of U.S. retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $455.6 billion, an increase of 0.5% from the previous month, and 2.5% above May 2015. Total sales for the March 2016 through May 2016 period were up 2.4% from the same period a year ago. Retail trade sales were up 0.4% from April, and up 2.0% from last year. Nonstore retailers were up 12.2% from May 2015, while Health and Personal Care Stores were up 8.3% from last year.
Sponsored message from Empower Retirement
Empower Retirement’s Lifetime Income Score Report
The sixth annual Lifetime Income ScoreSM report includes survey results from more than 4,000 American workers. Based on individual responses, it estimates the percentage of working income that American households are on track to replace in retirement.Read more >
Market Mirror

Stocks in the U.S. slipped Tuesday as jittery investors await for the Federal Reserve’s decision on interest rates and are worried about Britain’s expected close vote on whether to leave the European Union, according to the Associated Press. The Dow fell 57.66 points (0.33%) to 17,674.82, the NASDAQ closed 4.89 points (0.10%) lower at 4,843.55, and the S&P 500 decreased 3.74 points (0.18%) to 2,075.32. The Russell 2000 was down 2.87 points (0.25%) at 1,147.82, and the Wilshire 5000 lost 49.40 points (0.23%) to finish at 21,457.78.

On the NYSE, 3.1 billion shares traded, with a near 2 to 1 lead for decliners. On the NASDAQ, 2.7 billion shares changed hands, with 1.5 declining issues for every advancing issue.

The price of the 10-year Treasury note was up 1/32, decreasing its yield to 1.611%. The price of the 30-year Treasury bond was up 2/32, bringing its yield down to 2.422%.
Compliance
New guidance from the Pension Benefit Guaranty Corporation (PBGC) updates interest rate assumptions programmed into key regulations on benefits payable in terminated single-employer plans and the allocation of assets in single employer plans. Specifically, the benefits payable regulation has been updated with interest rate valuations for July 2016, while interest rate assumptions under the asset allocation regulation have been set for the whole third quarter of 2016.Read more >
Third Time’s a Charm in Lehman Stock Drop Suit
The 2nd U.S. Circuit Court of Appeals has again agreed with a lower court’s decision that participants in Lehman Brothers’ retirement plan did not plausibly argue that the company breached its fiduciary duty by keeping company stock in the plan when it was not prudent to do so.Read more >
IRS Issues Guidance About DB Plan Payments in Phased Retirement
The Internal Revenue Service (IRS) has issued guidance on payments issued to employees from a qualified defined benefit (DB) plan during phased retirement, explaining when they are to be considered as taxable DB annuity payments.Read more >
Investing
Research Predicts Growth in ETF Use by Institutional Investors
Institutional investments in exchange-traded funds (ETFs) are projected to grow to $300 billion annually by 2020, says a new report from Greenwich Associates. The growth will be “driven by the continued discovery of new and more sophisticated applications for the funds across investment portfolios,” says Andrew McCollum with Greenwich Associates.Read more >
Small Talk
While technology helps workers stay connected while away from the office, in many cases it is causing them to disconnect while in the office, leading to a negative impact on productivity. According to new CareerBuilder research, one in five employers (19%) think workers are productive less than five hours a day. The top reason—more than half of employers (55%) say workers’ mobile phones/texting are to blame. Employers were also asked to reveal the most unusual or most memorable things they have caught an employee doing when they should have been working.Read more >

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 1752, Benjamin Franklin experimented by flying a kite during a thunderstorm. The result was a little spark that showed the relationship between lightning and electricity. In 1775, George Washington was appointed head of the Continental Army by the Second Continental Congress. In 1836, Arkansas became the 25th U.S. state. In 1844, Charles Goodyear was granted a patent for the process that strengthens rubber. In 1898, the U.S. House of representatives approved the annexation of Hawaii. In 1911, the Computing-Tabulating-Recording Co. was incorporated in the state of New York. The company was later renamed International Business Machines (IBM) Corp. In 1916, U.S. President Woodrow Wilson signed a bill incorporating the Boy Scouts of America.

 

WEDNESDAY WISDOM: “Forget not that the earth delights to feel your bare feet and the winds long to play with your hair.”—Khalil Gibran, Lebanese-American artist, poet, and writer

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

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