| Benefits & Administration | PSNC 2015: Managing Administrative and Investment Fees | “We really only do custom fee benchmarking with
our clients,” said plan adviser Barbara Best, principal at Capital Strategies
Investment Group LLC, during a panel session at the 10th annual PLANSPONSOR
National Conference. “For the most part, you can drive a truck through the
results of public benchmarking.” Best’s firm advises on some $10 billion in
plan assets and seeks to deliver a holistic approach to retirement plan
services. She says working with this book of business clearly shows customized
and thoughtful plan fee benchmarking leads to greater understanding of plan
operations and plan success—and that choosing the wrong resources for fee
benchmarking can actually decrease understanding of whether a plan is getting a
good value for administration and investment services.Read more > | PSNC 2015: The Evolution of Education | The evolution of retirement plan participant
education is happening because providers have better tools to engage
participants, and technology makes it easier to get information about
participant behaviors and outcomes, Joe Connell, director of Retirement Plan
Services at Sikich Retirement Plan Services (Formerly Retirement Plan
Partners), told attendees of the 2015 PLANSPONSOR National Conference in
Chicago. Sean M. Ciemiewicz, a principal at Retirement Benefits Group, added
that more plan sponsors are offering tools to get participants to take
immediate action at meetings, rather than go back to their desk and think about
it. The first hurdle is getting participants’ attention, said Michelle Barrett,
manager of University Retirement Programs at the University of Rochester, a
2015 PLANSPONSOR Plan Sponsor of the Year finalist in the 403(b) category.Read more > | PSNC 2015: The Intersection of Health Care and Retirement | American’s health care costs in retirement
average $43,000 per year, according to Robert Massa, director of retirement at
Ascende Wealth Advisers Inc. Speaking at the PLANSPONSOR National Conference,
he suggested that, for a healthy 65-year-old man, the cost of care adds up to
roughly $369,000 over a lifetime; for women, that number is $417,000. While
overall living expenses typically level out between age 45 and 54, then fall
over the following decades, health care costs rise consistently until death, he
added. Early Boomers are most at risk of not being able to fund their health
care needs, Massa said, but all participants could benefit from a retirement
health savings plan.Read more > |
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| GAO Requests | Survey of 401(k) Plans’ Use of Eligibility and Vesting
Requirements: Building savings in a 401(k) plan is a key step
to achieving income security in retirement for millions of Americans. That
savings may be affected by the eligibility and vesting requirements that are
used by many plans. The Government Accountability Office (GAO) is asking plan
sponsors to participate in its survey examining why plan sponsors use certain
eligibility and vesting requirements, how they may have changed the
requirements, and how they communicate them to employees and participants.Read more > | Survey of Lifetime Income Options 401(k) Plan Sponsors
Offer Participants: An increasing American lifespan in an era when
the predominant workplace retirement plan no longer guarantees lifetime income
calls into question how well 401(k) plans work for the oldest Americans. The
GAO is asking plan sponsors to participant in a survey that examines the
mechanisms in 401(k) plans that can provide some financial stability to
participants until the end of their lives. It asks about the advantages and
disadvantages of these options, education about them, and barriers that might
limit their adoption.Read more > | | Economic Events | Total nonfarm payroll employment
increased by 280,000 in May, and the unemployment rate was essentially
unchanged at 5.5%, according to the Bureau of Labor Statistics. Job gains
occurred in professional and business services, leisure and hospitality, and
health care. Mining employment continued to decline.
THE
ECONOMIC WEEK AHEAD: Tomorrow,
the Census Bureau will report about wholesale inventories for April. Thursday, the Labor Department will
issue its initial claims report, and the Census Bureau will report about retail
sales for May and business inventories for April. Friday, the Bureau of Labor Statistics will reveal the producer
price index (PPI) for May.
| | Market Mirror | Friday, the
Dow closed 56.12 points (0.31%) lower at 17,849.46, the NASDAQ increased 9.33
points (0.18%) to 5,068.46, and the S&P 500 was down 3.01 points (0.14%) at
2,092.83. The Russell 2000 gained 9.72 points (0.78%) to finish at 1,261.01,
and the Wilshire 5000 ticked up 5.91 points (0.03%) to 22,167.66.
On the NYSE,
3.2 billion shares traded, with a slight lead for decliners. On the NASDAQ, 2.8
billion shares changed hands, with 1.8 advancing issues for every declining
issue.
The price of
the 10-year Treasury note decreased 27/32, bringing its yield up to 2.406%. The
price of the 30-year Treasury bond fell 1 13/32, increasing its yield to
3.114%.
WEEK’S
WORTH: For the week ending June 5, the Dow lost 0.90%,
the NASDAQ slipped 0.03%, and the S&P 500 finished 0.70% lower. The Russell
2000 climbed 1.17%, and the Wilshire 5000 was down 0.41%.
| | Compliance | U.S. Recommends Denial of RJR Stock Case Review | U.S. Solicitor General Donald B. Verrilli Jr.
submitted a brief to the U.S. Supreme Court recommending it deny a petition for
a writ of certiorari filed by RJR Tobacco Company in a “reverse stock drop”
case. The
brief says the 4th U.S. Circuit Court of Appeals correctly decided both issues,
and contrary to RJR’s contention, there is no clear circuit split on either
question.Read more > | GASB Approves New Accounting Standards for OPEB | The Governmental Accounting Standards Board
(GASB) approved two statements it says will significantly improve accounting
and financial reporting by state and local governments for post-employment
benefits other than pensions (referred to as OPEB)—primarily retiree health
insurance. GASB Statement No. 74, “Financial Reporting for Postemployment
Benefit Plans Other Than Pension Plans,” addresses reporting by OPEB plans that
administer benefits on behalf of governments. GASB Statement No. 75,
“Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions,” addresses reporting by governments that provide OPEB to their
employees and for governments that finance OPEB for employees of other
governments.Read more > | PSNC 2015: Avoiding Lawsuits | Before the Enron scandal, which resulted in the
increased accountability of auditing firms to remain unbiased and independent
of their clients, there was relatively little litigation in the retirement plan
arena. But this has changed, as was the perception of 64% of attendees polled
at the PLANSPONSOR National Conference in Chicago, who indicated that
litigation risk is increasing in this industry. Jamie Fleckner, a partner at
Goodwin Procter LLP, said “plaintiff’s lawyers have become more interested in
lawsuits because of the increased assets in defined contribution [DC] plans,
with the focus of the suits against plan sponsors and providers.”Read more > | | Investing | PSNC 2015: DB Plan Investing | Equity market risk and interest-rate risk are
the biggest risk factors for defined benefit (DB) plan investing today,
according to Phil Kivarkis, U.S. director of Investment Policy Services at Aon
Hewitt. “DB plans are subject to mark-to-market accounting, so plan sponsors
need to be liability-aware,” he told attendees of the 2015 PLANSPONSOR National
Conference. “Take the risks you will be rewarded for and get rid of the ones
you won’t,” he suggested.Read more > | | Small Talk | ON THIS DATE: In
1869, Ives W. McGaffey received a
U.S. patent for the suction vacuum cleaner. In 1947, “Lassie Show” debuted on ABC radio. It was a
15-minute show. In 1949, Hollywood
figures were named in a FBI report as Communist Party members, fueling the anti-communist
hysteria in the United States during the late-1940s and 1950s. In 1966, the National Football League
(NFL) and American Football League (AFL) announced they would merge. In 1968, James Earl Ray, an escaped
American convict, was arrested in London, England, and charged with the
assassination of African American civil rights leader Martin Luther King, Jr. | SURVEY SAYS REWIND: Ten
years ago, we asked NewsDash readers, “How often are retirement plan education
meetings (not enrollment sessions) held for current workers?”Read more > | 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 > | News from PLANSPONSOR.com
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