|
| Second Opinions |
| SECOND OPINIONS: ACA Final Waiting Period Rules |
| The Patient Protection and Affordable Care Act
(ACA) requires that, for plan years on or after 1/1/14, group health plans may
not impose a waiting period of more than 90 days. Treasury, Health and Human Services (HHS),
and the Department of Labor (DOL) had issued proposed rules in March 2013 and issued
final rules earlier this year. Experts from Groom Law Group address questions
concerning the waiting period requirements and, in particular, how these rules
interact with the ACA shared responsibility rules under Internal Revenue Code
section 4980H, effective for most plans as of 1/1/15. |
|
| Benefit Briefs |
| PSNC 2014: Success Is in the Eye of the Beholder |
| Dallas Salisbury fields a lot of questions about
how to define retirement plan success in his role as president and CEO of the
Employee Benefits Research Institute (EBRI). One of the most common questions,
in Salisbury’s view, is also the most problematic: “What’s the number?” Plan
sponsors, providers and policymakers alike come to EBRI wondering what lump sum
retirement plan participants must reach to be adequately prepared for retirement,
he explains, or they ask for the average salary deferral percentage or income
replacement ratio that’s going to guarantee plan success. Yet, as Salisbury
stressed during the keynote address of the 2014 PLANSPONSOR National
Conference, plan success is the result of myriad factors inside and outside a
plan and can seldom be captured in a single metric. |
| The results of The Business of Healthy Employees
2014: A Survey of Workplace Health Priorities, released by Virgin Pulse finds while
employees are taking advantage of current wellness program offerings, they
still want to see more. They are most interested in access to physical activity
programs (72.4%), healthy food choices (65.5%) and onsite gym facilities or
fitness classes (62.3%). In each of these areas, the survey found significant
gaps in what employers are offering and what employees want. |
| 403(b)s Simplifying Investment Menus |
| Non-profit organizations that sponsor 403(b)
plans are simplifying investment platforms by streamlining the options
available for participants. 403(b) plan sponsors offered an average of 26
investment options in 2013, down from 31 in 2012; edging closer to the average
of 19 investment options in 401(k) plans, according to the 2014 Plan Sponsor
Council of America (PSCA) 403(b) Plan Survey. The survey found 403(b)s with the
highest average participation rate (72.2%) are those with between 15 and 20
investment options. |
| Confidence about retirement preparations is
greater with men (43%) than women (32%), a survey reveals. OneAmerica finds a
realistic knowledge of how much retirement income they will need contributes to
individuals’ confidence. Confident retirement plan participants are more likely
to have calculated their retirement income needs (55%) or worked with a financial
adviser (35%). |
| PSNC 2014: One Size Fits All? |
| At the PLANSPONSOR National Conference in Chicago, four leading experts debated the merits of target-date funds (TDFs) versus target-risk funds (TRFs) and managed accounts. These experts started with the question of what is the best way to deliver asset-allocation options to participants. “It’s important to make sure they are used effectively by participants, which means adopting the best practices of pension plans,” said Scott Brooks, managing director of the institutional group at SEI Investments. |
|
| Buyer's Market |
| Vanguard’s new “Enroll Now” process simplifies
retirement plan enrollment and potentially increases the savings of
participants. According to the investment management firm, nearly six in 10 of
the employees who joined their company’s 401(k) plan during pilot research on
the new online Enroll Now process also chose to automatically increase their
savings by a modest amount each year. |
| The Employee Benefit Research Institute (EBRI)
rolled out a new mobile app, offering its research for download. |
|
| Industry Voices |
| The effective result of the transition from
defined benefit (DB) to defined contribution (DC) plans is that individual
savings accounts, originally intended to supplement DB plans, have ended up
supplanting them. This has rendered the
question of optimizing returns from investments a cornerstone of the retirement
plan debate, as these returns now directly dictate an employees’ eventual
retirement income. This in turn has been a factor behind the rise of the
multi-managed fund model. The shift to DC has fragmented the retirement savings
market, which alongside increased demand has led to an influx of service
providers across the value chain. In combination with increasingly difficult
market conditions, this has made the hunt for yield ever-more-difficult for
individual funds. Funds are having to go further afield to generate the returns
their members need. It is now the norm
for pension funds to ‘farm out’ their portfolios to a zoo of specialist ‘best
of breed’ sub-funds in order to achieve their participants’ objectives. For all
the benefits of the multi-managed approach, it has also created a problem. |
|
| Market Mirror |
| Tuesday, the Dow was down 21.29 points
(0.13%) at 16,722.34, the NASDAQ slipped 3.12 points (0.07%) to 4,234.08, and
the S&P 500 decreased by 0.73 (0.04%) to 1,924.24. The Russell 2000 fell
2.75 points (0.24%) to 1,126.15, and the Wilshire 5000 closed 13.48 points
(0.07%) lower at 20,347.55.
On the NYSE, 3.2 billion shares changed
hands, and on the NASDAQ, 2.7 billion shares traded, with 1.6 declining issues
for every advancing issue on both exchanges.
The price of the 10-year Treasury note decreased
21/32, increasing its yield to 2.602%. The price of the 30-year Treasury bond
fell 1 11/32, bringing its yield up to 3.441%.
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|
| Rules & Regulators |
| The Department of Labor (DOL) will hold a
seminar in Santa Fe, New Mexico, about complying with health benefits law. |
|
| Small Talk |
| Job Hopping Has Lost Its Stigma |
| The practice of job-hopping carries less of a
stigma with employers than it used to. Results of a survey by CareerBuilder
show employers are less concerned about job-hopping (i.e., working for various
employers for a short period of time), with 55% saying they have hired a
job-hopper and 32% saying they now expect workers to job-hop. |
| ON
THIS DATE: In
1896, in the shed behind his home on
Bagley Avenue in Detroit, Henry Ford unveiled the “Quadricycle,” the
first automobile he ever designed or drove. In 1919, the 19th Amendment to the U.S. Constitution, guaranteeing women
the right to vote, was passed by Congress and sent to the states for
ratification. In 1942, the Battle of
Midway—one of the most decisive U.S. victories against Japan during World
War II—began.
WEDNESDAY
WISDOM: “Step by
step and the thing is done.”—Charles Atlas,
bodybuilder
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