Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 20th, 2014
Benefit Briefs
Making Informed Decisions About Lifetime Income Options
Plan sponsors can help participants determine how to generate lifetime retirement income. To learn about options and solutions, Managing Editor Judy Faust Hartnett spoke to Steve Vernon, a research scholar at Stanford Center on Longevity, a former actuary, and the author of “The Next Evolution in Defined Contribution Retirement Plan Design: A Guide for DC Plan Sponsors to Implementing Retirement Income Programs,” and Bruce L. Ashton, a partner in the Employee Benefits and Executive Compensation Practice Group at law firm Drinker Biddle & Reath LLP.
Buyer's Market
Firm Rolls Out Recordkeeping Platform for K-12 403(b)s
FPS Services, LLC, an affiliate of FPS Group, LLC and a Bluff Point company, has rolled out its Investment Provider Xchange (IPX) platform. The IPX platform is a trading and recordkeeping platform focused on serving K-12 school district 403(b) plans, participants, and their investment providers. “IPX gives us an ease of processing that is otherwise found only in a single investment provider plan design, but with the ability to offer all of the obvious benefits sought by employers who prefer a multi-provider plan for their participants,” says James Olson, head of product development at FPS Services.
Plan Sponsors Should Encourage Rollovers into Plan
BMO Retirement Services lays out four key reasons asset consolidation benefits participants. Encouraging participants to roll assets from a previous employer’s defined contribution (DC) plan reduces the potential for prematurely cashing out, BMO says in a new white paper for sponsors and their consultants, “BMO Defined Contribution IQ: Rollovers.” In addition, as plan assets rise, all participants in the plan benefit from lower investment costs, which can have a dramatic impact on retirement outcomes, BMO says.
Towers Watson made two executive appointments within the company’s investment business. Craig Baker has taken on the new role of global chief investment officer (CIO) and is responsible for all aspects of the investment business’s philosophy and process. Chris Mansi takes on the new role of global delegated CIO, with responsibility for the construction and management of delegated clients’ portfolios.
J.P. Morgan Retirement Link Goes Mobile
J.P. Morgan Retirement Link, the firm’s retirement plan administration platform for small and mid-size employers, has gone mobile with a new iPhone and Android application. The Retirement Link mobile portal grants plan participants on-the-go access to key account data and retirement planning tools, including retirement income projections and gap analyses.
The companies of OneAmerica have implemented a new three-region sales and distribution structure for retirement services. OneAmerica says the new structure will improve geographic proximity for clients and create efficiencies in service delivery.
Economic Events
In the week ending June 14, the advance figure for seasonally adjusted initial claims for unemployment insurance was 312,000, a decrease of 6,000 from the previous week’s revised level, the Labor Department reported. The previous week’s level was revised up by 1,000 from 317,000 to 318,000. The four-week moving average was 311,750, a decrease of 3,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 315,250 to 315,500. The average interest rate for a 30-year fixed-rate mortgage is 4.17%, down from 4.20% one year ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.30%, down from 3.31%.
Market Mirror
Thursday, the Dow ticked up 14.84 points (0.09%) to 16,921.46, the NASDAQ slipped 3.51 points (0.08%) to 4,359.33, and the S&P 500 was up 2.50 points (0.13%) at 1,959.48. The Russell 2000 increased by 0.90 (0.08%) to 1,184.03, and the Wilshire 5000 closed 28.65 points (0.14%) higher at 20,796.49. On the NYSE, 3.2 billion shares changed hands, with 1.3 advancing issues for every declining issue. On the NASDAQ, there was a 1.2 to 1 ratio of decliners to advancers among the 2.7 billion shares traded. The price of the 10-year Treasury note was down 9/32, bringing its yield up to 2.620%. The price of the 30-year Treasury bond fell 1 7/32, increasing its yield to 3.466%.
Rules & Regulators
A firm that the Equal Employment Opportunity Commission (EEOC) accused of revoking job offers after learning the candidates’ ages will pay will pay $40,000 to settle the age discrimination suit. According to the EEOC, two women, each older than age 70, applied for a shared mail clerk position and were extended job offers by the company. However, after their respective ages were revealed to the company’s CEO, the job offers were revoked one day before their scheduled start date.
Should Non-ERISA 403(b)s Adopt ERISA-Like Practices?
“Do the Experts think Public K-12 school districts and other 403(b) plan sponsors that are not subject to ERISA could benefit from ERISA-like fiduciary best practices anyway?”
What constitutes actual knowledge for purposes of the Employee Retirement Income Security Act (ERISA)’s three-year statute of limitations on claims?
Financial Sense
Tenn. Public Pensions Law a “Model” for Other States
Tennessee Governor Bill Haslam has signed into law a bill that officials say is designed to ensure Tennessee local government entities fully pay required annual contributions to their public employee pension plans. Officials are calling the legislation the first of its kind in the nation, and credit rating agency Fitch Ratings said in a statement, “The law could serve as a model for other states pursuing means to ensure the sustainability of public employee pension plans.”
Small Talk
ON THIS DATE:  In 1782, Congress adopted the Great Seal of the United States. In 1863, during the Civil War, West Virginia was admitted into the Union as the 35th U.S. state, or the 24th state if the secession of the 11 Southern states were taken into account. In 1941, the U.S. Army Air Force was established, replacing the Army Air Corps. In 1941, Ford Motor Company signed its first contract with the United Automobile Workers of America and Congress of Industrial Organizations (UAW-CIO). In 1947, organized crime leader Benjamin “Bugsy” Siegel was shot and killed at his mistress Virginia Hill’s home in Beverly Hills, California. In 1963, the United States and Soviet Union signed an agreement to set up a hot line communication link between the two countries. In 1975, “Jaws,” a film directed by Steven Spielberg that made countless viewers afraid to go into the water, opened in theaters. In 1977, with a flip of a switch in Prudhoe Bay, crude oil from the nation’s largest oil field began flowing south down the trans-Alaska pipeline to the ice-free port of Valdez, Alaska. In 1979, a solar-energy system was installed at the White House. In 1980, “It’s Still Rock & Roll” became Billy Joel’s first No. 1 hit. In 1983, the U.S. Supreme Court ruled that employers must treat male and female workers equally in providing health benefits for their spouses.   And now it’s time for FRIDAY FILES!
Some experiments to explore your sense of touch.
The scientific way to cut a cake to “maximize the amount of gastronomic pleasure” you get from subsequent tastings.
In Vienna, Austria, a fender bender was caused by a driver who crashed into the back of the car in front of him because he became distracted by a sunbather. The female sunbather was lying nak.ed—with her legs extended out a third story window. In Liverpool, England, a man found a library book he had forgotten he checked out—61 years earlier. The 91-year-old had checked out a copy of “Structure and Function in Primitive Society” in 1953 when he was working as a research assistant at the University of Liverpool. The university’s librarian waived the $7,634.48 in late fees on the condition that the man “live an exemplary life and return all his books on time,” according to United Press International. In Bozeman, Montana, a woman was arrested for assaulting her boyfriend. The boyfriend told police he was sleeping when he was awakened by his girlfriend kicking him and yelling at him. She told him he had been saying bad things about her in his sleep.
Some dogs just won’t listen.
In West Palm Beach, Florida, a man called 911 seven times over the course of four hours to complain about his wife. When officers responded, they found he was into.xicated, and he told the officers his wife had thrown out his Officers told him not to call 911 unless he was involved in an emergency situation. However, he called 911 again saying a female had broken into two of his be.ers. He was arrested and charged with misuse of the 911 emergency system. In London, England, a passenger at City Airport was running late for his flight to Frankfurt. So, in an attempt to stop the plane from leaving, the passenger pulled a fire alarm. The airport had to carry out a full evacuation. Police were called, but the passenger was not arrested. In Bloomington, Indiana, police were able to nab a suspected pusher of synthetic drugs thanks to an obvious sign. The suspect had written “Drugs This Way” with an arrow on the side of a garage. Police found the drugs behind a fence and one doorway away from the sign. In Chicago, Illinois, a boy has been expelled from the Illinois Mathematics and Science Academy for selling his attention deficit disorder (ADD) medication. The boy received several bags of chips, Cheez-Its and $3.00 for the medication. But, here’s the shocking part: According to Above the Law Redline, his mother is suing the school arguing that her son was “only handing out pills to help other students succeed.” Have a great weekend, everyone!
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Data and Research
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Editorial: Alison Cooke Mintzer


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