| Benefit Briefs | PSNC 2014: Proper Investment Committee Governance | An investment committee must focus on fiduciary
considerations at all times. Care, diligence, prudence and paying reasonable
expenses should constantly be invoked by its members. “If your investment
committee is not constantly talking about fiduciary duties and writing it into
an investment policy, I think you are all failing and opening yourself up to
liability,” Joshua A. Sutin, shareholder at Cox Smith Matthews Incorporated,
warned attendees of the PLANSPONSOR National Conference. | PSNC 2014: The RFP from Start to Finish | The most robust way for a plan sponsor to review
their vendors is through a rigorous RFP process, Michael Kozemchak, managing
director at Institutional Investment Consulting, said during a panel discussion
at the PLANSPONSOR National Conference. “RFPs are periodically necessary
because of litigation,” Vincent Morris, president of Bukaty Companies, added. | PSNC 2014: Financial Wellness in the Workplace | When it comes to financial matters, employers
should assume procrastination, inertia and a real lack of knowledge from
employees, according to Janet Ganong, a financial consultant at the Kieckhefer
Group. Incorporating automatic features into retirement plan design sets
participants on a better path for financial security in retirement and frees
plan sponsors and advisers up to talk about other subjects to help improve
overall financial success for employees, Ganong said, speaking to attendees of
the 2014 PLANSPONSOR National Conference in Chicago. Matt Gulseth, a partner at
Channel Financial, added that when it comes to financial wellness education,
plan sponsors should think about what they remember from high school
biology—it’s probably not much. They should determine how to deliver
“just-in-time” messages—for example, a seminar about mortgages for participants
who are ready to get a mortgage. | PSNC 2014: Moving the Needle | According to David Gray, vice president of
Client Experience at Charles Schwab, there are three main strategies for moving
the needle on participants’ retirement readiness. “For the past 30 years we
have spent untold millions of dollars trying to educate accidental investors
into individuals who can decide how much to invest, how to invest, how often to
reallocate,” he told attendees of the 2014 PLANSPONSOR National Conference. “We
would have been better off just giving people the money we spent on education
because it didn’t work. Accidental investors don’t want education, they want
solutions.” Gray said to move the needle, plan sponsors need to drive down
investment expenses; give participants investment help; and press the reset
button in the plan. | PSNC 2014: Plan Health and Retirement Readiness | The concept of “retirement plan health” means
different things for plan sponsors and participants, but well-run plans can
meet both sponsor and participant needs. For participants, retirement plan
health can be understood as a function of the plan’s ability to replace income
in retirement, says Stephen Jenks, head of defined contribution product and
marketing for Putnam Investments. There are many factors involved in a
participant’s ability to retire comfortably beyond income replacement ratios,
he admits, but it’s a sensible place to start building a meaningful benchmark
for participant success. | PSNC 2014: Investment Diversification | Amid the discussion of industry best practices
at the 2014 PLANSPONSOR National Conference, the question of the retirement
plan investment menu and how it has or should evolve came up continuously. Industry
experts and attending sponsors alike questioned whether a lineup of traditional
mutual funds should still make up the core retirement plan menu, and whether
alternatives should be added. Others asked about the ideal number of funds to
include on a plan menu, and whether prepackaged investment solutions make sense
for all employees. | | Market Mirror | Wednesday, the Dow was up 15.19 points
(0.09%) at 16,737.53, the NASDAQ climbed 17.56 points (0.41%) to 4,251.64, and
the S&P 500 increased 3.64 points (0.19%) to 1,927.88. The Russell 2000 gained
5.07 points (0.45%) to finish at 1,131.22, and the Wilshire 5000 closed 52.14
points (0.26%) higher at 20,399.69.
On the NYSE, 3.2 billion shares traded,
with a slight lead for advancers. On the NASDAQ, 2.7 billion shares changed
hands, with 1.2 advancing issues for every declining issue.
The price of the 10-year Treasury bond was up 4/32,
bringing its yield down to 2.589%. The price of the 30-year Treasury bond
increased 10/32, decreasing its yield to 3.425%.
| | Financial Sense | PSNC 2014: Fixed Income and Stable Value | The stable value market has changed
significantly post financial crisis, says Josh Kruk, head of stable value
portfolio management at Dwight Asset Management, and the evolution is ongoing. This
means plan sponsors, who are bound by a fiduciary duty to regularly monitor and
adjust their plan’s investment menu, must identify and respond to new emerging
risks and opportunities in stable value offerings and fixed-income portfolios
more generally. The matter is complicated by the expectation that interest
rates may rise in the short or medium term, Kruk says, presenting a new and
increasingly complex picture for sponsors and workplace retirement investors. | | Sponsored message from PNC | PLANSPONSOR interviews Jim Sandidge of PNC PLANSPONSOR Editor-in-Chief Alison Cooke-Mintzer sits down with Jim Sandidge, Product Director of Retirement Products at PNC Bank. Click here to watch the full interview. | | Small Talk | ON
THIS DATE: In
1888, President Grover Cleveland
vetoed a bill that would have given a pension to war widow Johanna Loewinger,
whose husband died 14 years after being discharged from the army. In 1933, the United States went off the
gold standard, a monetary system in which currency was backed by gold, when
Congress enacted a joint resolution nullifying the right of creditors to demand
payment in gold. In 1968, Senator
Robert Kennedy was shot at the Ambassador Hotel in Los Angeles after winning
the California presidential primary. In 2004,
Ronald Wilson Reagan, the 40th president of the United States, died, after a
long struggle with Alzheimer’s disease. In 2012,
one of the preeminent science fiction authors of the 20th century, Ray
Bradbury, whose books include “The Martian Chronicles,” “Fahrenheit 451” and
“Something Wicked This Way Comes,” died at age 91 in Los Angeles.
SURVEY
SAYS: Not this week.
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