Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 5th, 2015
Benefits & Administration
PSNC 2015: Using Plan Design to Help Drive Engagement
In his keynote speech at the 10th annual PLANSPONSOR National Conference, Steve Anderson, head of Schwab Retirement Plan Services Inc., argued that participant outcomes and engagement are interrelated—adopting a smart plan design can drive engagement, not just supplement it. If participants receive positive feedback about their account, they are more likely to take positive action, and it becomes a virtuous circle.Read more >
PSNC 2015: Retirement Readiness Benchmarks
As a plan sponsor, both Sections 408(b)(2) and 404(a)5 of the Employee Retirement Income Security Act (ERISA) help guide the approach to fees. With these regulations in mind, sponsors have likely formed a formal process to ensure fees are reasonable, and that the services received for those fees represent a good value. But in the rapidly evolving retirement landscape, how can plan sponsors be sure their fees truly remain reasonable and defensible in the case of a participant lawsuit or a challenge from the Department of Labor (DOL)?Read more >
PSNC 2015: Plan Decumulation Strategies and Products
Only 12% of retirement plans sponsors polled at the PLANSPONSOR National Conference in Chicago offer a retirement income product. 401(k) plans are generally not annuitized at this time so it’s mostly up to workers to figure out how to try to make their money last through their lifetime. With defined benefit (DB) plans “flat lining” and the first major wave of Baby Boomers retiring, the industry overall needs to figure out how to help defined contribution (DC) participants go through the transition from a salary to the decumulation phase of their retirement savings.Read more >
PSNC 2015: Designing Plans for Optimal Outcomes
To Peter Kapinos, head of acquisition and retention marketing at Empower Retirement, the whole point of employer-sponsored retirement plans has to be helping participants reliably replace their income in retirement. Speaking at the 10th annual PLANSPONSOR National Conference, Michael Swann, director of defined contribution (DC) strategies, SEI Investments, said he looks to results—participants being able to retire when they want. In thinking about how to get them there, Rennie Worsfold, vice president of Financial Engines, noted that many plans target a 10% savings threshold for participants. However, one in four people fail to take full advantage of their employer’s match, he said, and some studies suggest a total contribution rate of 15% to 20% is likelier to meet participant needs.Read more >
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Products, Deals & People
Opus Advisory Group, a health care consultancy, has selected Maestro Health’s exchange and benefit administration solution for its health care management platform. The goal is to create an all-in-one human resource (HR) platform.Read more >
The Retirement Advantage Inc. (TRA) has redesigned and refreshed its website, using responsive Web design to make all of its features equally accessible, whether by smartphone, tablet or desktop computer. The third-party administrator (TPA), along with digital marketing agency Ritter Knight Creative, designed the site after research and audience data showed a growing demand for such flexibility.Read more >
Economic Events

In the week ending May 30, the advance figure for seasonally adjusted initial claims for unemployment insurance was 276,000, a decrease of 8,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 274,750, an increase of 2,750 from the previous week’s revised average.

The average interest rate for a 30-year fixed-rate mortgage is 3.87%, unchanged from one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.08%, down from 3.11% one week ago.

Market Mirror

Thursday, the Dow lost 170.69 points (0.94%) to finish at 17,905.58, the NASDAQ was down 40.11 points (0.79%) at 5,059.12, and the S&P 500 decreased 18.23 points (0.86%) to 2,095.84. The Russell 2000 fell 13.29 points (1.05%) to 1,251.29, and the Wilshire 5000 closed 195.67 points (0.88%) lower at 22,161.75.

On the NYSE, 3.2 billion shares traded, with declining issues outnumbering advancing issues more than 3 to 1. On the NASDAQ, 2.8 billion shares traded with 2.6 decliners for every advancer.

The price of the 10-year Treasury note and the price of the 30-year Treasury bond were both down 4/32, increasing their yields to 2.322% and 3.048%, respectively.

From the Magazine
DB Plan Ask the Experts
How does a plan fiduciary decide which asset-allocation vehicle to adopt for a retirement plan? Or which asset-allocation to use for the qualified default investment alternative (QDIA)?Read more >
Investing
A new report from Mercer models the potential impact of climate change on investments. The research suggests investors can most effectively manage the risk by looking under the hood of their portfolios and factoring climate change into their risk modelling, which requires a significant behavioral shift for most. “Investing in a Time of Climate Change” outlines actions for investors to manage key downside risks and access opportunities.Read more >
Small Talk

ON THIS DATE: In 1752, Benjamin Franklin flew a kite for the first time to demonstrate that lightning was a form of electricity. 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 is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. In 1967, The National Hockey League (NHL) awarded three new franchises. The Minnesota North Stars (later the Dallas Stars), the California Golden Seals (no longer in existence) and the Los Angeles Kings.  In 1968, Senator Robert Kennedy was shot at the Ambassador Hotel in Los Angeles after winning the California presidential primary. In 1981, in the U.S., the Center for Disease Control and Prevention reported that five men in Los Angeles were suffering from a rare pneumonia found in patients with weakened immune systems. They were the first recognized cases of what came to be known as AIDS. In 2004, Ronald Wilson Reagan, the 40th president of the United States, died after a long struggle with Alzheimer’s disease.

 

And now it’s time for FRIDAY FILES! Actually, we’re taking a break from FRIDAY FILES this week, but it will be back next Friday.

Have a wonderful weekend! I enjoyed meeting plan sponsors this week at the PLANSPONSOR National Conference, and I appreciate the feedback and ideas.
Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more >

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

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