Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 23rd, 2015
Benefits & Administration
Millennials Better Savers Than Boomers
Millennials are far more diligent about saving than Baby Boomers, according to T. Rowe Price’s Retirement Saving and Spending Study. Forty percent of Millennials have increased their retirement savings in the past 12 months, nearly double the 21% of Boomers who have done so. Most Millennials also track their expenses carefully (75%) and stick to a budget (67%), compared with 64% and 55% of Boomers, respectively.Read more >
For the risk that there will be a catastrophic health benefits claim, employers with self-funded health benefits generally purchase stop-loss insurance. A report from the U.S. business group of Sun Life Financial reveals cancer remains the costliest disease, accounting for more than one quarter (25.7%) of the $2.1 billion Sun Life paid out to stop-loss claimants during the report’s four-year period. The top three conditions, which include cancer (malignant neoplasm and leukemia/lymphoma/multiple myeloma) and end-stage renal disease, made up 33.5% of total reimbursement costs.Read more >
Products, Deals & People
Independent advisory firm Arnerich Massena appointed Jacob O’Shaughnessy as senior consultant, taking on strategic leadership for the firm’s retirement plan services team in both the corporate and public plan markets.Read more >
Employee benefits law firm Groom Law Group announced Michael Kreps has once again joined the firm as a principal after spending five years on the staff of the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP).Read more >
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Retirement Contribution Limits, COLA Stay on Track With Continuing Resolution
Social Security Administration Cannot Calculate 2024 COLA if Government Shuts Down
Data and Research
Low Account Balances, Gender Savings Gap Found Among Public Sector Workers
Economic Events
Fueled partly by an increase in the share of sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years, according to the National Association of Realtors. Led by the Northeast, all major regions experienced sales increases in May. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.1% to a seasonally adjusted annual rate of 5.35 million in May from an upwardly revised 5.09 million in April. Sales have now increased year-over-year for eight consecutive months and are 9.2% above a year ago (4.90 million).
Market Mirror

U.S. stocks are closing higher because of optimism that there will be a breakthrough in bailout talks between Greece and its lenders this week, and from deal news in the health care and energy sectors, according to the Associated Press. The Dow increased 103.83 points (0.58%) to 18,119.78, the NASDAQ climbed 36.97 points (0.72%) to 5,153.97, and the S&P 500 gained 12.40 points (0.59%) to finish at 2,122.39. The Russell 2000 closed 7.70 points (0.60%) higher at 1,292.37, and the Wilshire 5000 was up 125.61 points (0.56%) at 22,473.26.

On the NYSE, 3.2 billion shares changed hands, with 1.5 advancing issues for every declining issue. On the NASDAQ, 2.9 billion shares traded, with a 1.8 to 1 ratio of advancers to decliners.

The price of the 10-year Treasury note decreased 1 1/32, bringing its yield up to 2.378%. The price of the 30-year Treasury bond fell 2 8/32, increasing its yield to 3.169%.

State Street Gets Wells Notice from SEC
State Street Corporation announced in an 8-K filing that the enforcement staff of the U.S. Securities and Exchange Commission (SEC) has provided it with a “Wells” notice. The notice relates to a previously disclosed SEC investigation into State Street’s solicitation of asset servicing business for public retirement plans.Read more >
From the Magazine
Pre-Approved Plans Not as Simple as They Sound
Adopting a pre-approved plan provides retirement plan sponsors with reliance that their documents comply in form with Section 401(a) of the Employee Retirement Income Security Act (ERISA). This reliance is why plan sponsors want Internal Revenue Service (IRS) approval of their plans, according to Robert Browning, a partner at Spencer Fane Brenton Brown LLP and member of its employee benefit practice group, in Overland Park, Kansas. But, pre-approved plans are not as simple as they sound.Read more >
AllianceBernstein Says Many TDFs Fall Short
Target-date funds (TDFs) are not as dynamically managed as they could be, according to a new report from AllianceBernstein titled “Designing the Future of Target-Date Funds.” Specifically, they need to invest in a broader set of asset classes, beyond traditional stocks and bonds, moving into commodities, real estate and other liquid and illiquid alternatives, for example.Read more >
An extensive new market outlook report from Principal Global Investors and CREATE-Research finds points of support for both bulls and bears, but warns investors that old assumptions about the equity and bond markets have been severely tested by the “lost decade.”Read more >
Why Institutionalize Your DC Plan Investments?
There seems to be no argument that defined benefit (DB) plans, with the administrative burden or the expense they allegedly add, yield better participant outcomes in retirement. And, it’s not just because the company pays. DB plans consistently outperform defined contribution (DC) plans by close to 1%, according to studies such as the Callan DC Index—which, compounded over a working career, can be a big boost toward retirement readiness. Experts believe sponsors have much to gain from exploring what institutionalization, including institutionalization of investments, could do for their DC plans.Read more >
Small Talk

ON THIS DATE: In 1860, the U.S. Secret Service was created to arrest counterfeiters. In 1868, Christopher Latham Sholes received a patent for an invention that he called a “Type-Writer.” In 1947, the U.S. Senate joined the House in overriding President Truman’s veto of the Taft-Hartley Act. In 1992, mafia boss John Gotti, who was nicknamed the “Teflon Don” after escaping unscathed from several trials during the 1980s, was sentenced to life in prison after being found guilty on 14 accounts of conspiracy to commit murder and racketeering. In 2005, movie critic Roger Ebert received a star on the Hollywood Walk of Fame. In 2013, 34-year-old aerialist Nik Wallenda became the first person to walk a high wire across the Little Colorado River Gorge near Grand Canyon National Park in Arizona.


TUESDAY TRIVIA: Veto in Latin means ‘I forbid.’

TRIVIAL PURSUITS: In the phrase ‘every nook and cranny,’ the word ‘nook’ refers to corners. What does ‘cranny’ mean?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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