| | Benefit Briefs | | Plan Committee Meeting Agendas: Part II | | Fred Reish, chair of the Financial Services
ERISA team at the law firm of Drinker, Biddle & Reath LLP, continues his
list of recommended agenda items for plan committee meetings. | | The Patient Protection and Affordable Care Act
(or ACA) is beginning to have more of an impact when it comes to employee
benefits, according to a recent report. With ACA deadlines occurring in 2014
and 2015, “The Prudential Insurance Company of America’s (Prudential’s) Eighth
Annual Study of Employee Benefits: Today & Beyond,” finds that nearly half
(49%) of employers report they are extremely or very likely to make a
high-deductible health plan their only health insurance option in the
foreseeable future. | | Retirement readiness improved for Baby Boomers
and Generation X households during 2013, says a new report. A new report
released by the Employee Benefit Research Institute (EBRI), “What Causes EBRI
Retirement Readiness Ratings to Vary: Results from the 2014 Retirement Security
Projection Model,” reveals that overall retirement income adequacy has improved
in recent years and fewer households are likely to run short of money during
retirement. However, factors such as age, income and access to an
employer-sponsored 401(k)-type retirement plan can still produce substantial
individual differences in readiness. | | More Guidance About Brokerage Windows May Be Coming | | In May 2012, the Department of Labor (DOL)
stated in a Q-and-A that an administrator of a participant-directed individual
account plan may need to treat an investment alternative through a brokerage
window as a “designated investment alternative” and therefore provide certain
disclosures regarding the investment alternative—if a “significant number of
participants and beneficiaries” invested in it. Also stated in DOL Field
Assistance Bulletin (FAB) 2012-02 Q-and-A 30: “Unless participants and
beneficiaries are financially sophisticated, many of them may need guidance
when choosing their own investments from among a large number of alternatives”
and the suggestion that plan fiduciaries may have a duty to “designate a
manageable number of investment alternatives.” | | More than one-third of employees are not
prepared for retirement, says a new survey. Franklin Templeton Investments
released the findings of its 2014 Retirement Income Strategies and Expectations
(RISE) Survey, which reveals 39% of preretirees have not yet started saving for
retirement. The annual survey also shows 92% of preretirees anticipate their
retirement expenses will be similar to or less than their preretirement
spending. “Americans have long struggled with preparing for the realities of
retirement,” says Michael Doshier, vice president of retirement marketing for
Franklin Templeton Investments, based in San Mateo, California. “The survey uncovered
several contradictions related to the degree of understanding and often
divergent approaches to retirement.” As to what plan sponsors can do to help
improve the retirement readiness of their participants, Doshier tells
PLANSPONSOR there are three areas of focus—plan design, investment choices and
participant support. | | | Buyer's Market | | J.P. Morgan Revamps Participant Engagement Program | | With the second release of its Audience of One
program, J.P. Morgan Retirement Plan Services hopes to deepen engagement with
participants through tailored messaging and robust data technology support. The
financial services firm says the re-launched Audience of One program is
designed to be more interactive, personal and easy for participants to use. In
adopting the program, plan advisers and sponsors will benefit from tools that
provide tailored messaging, interactive online games, video content and other services
designed as a “call to action” for employees to save and invest more
effectively. | | What’s Wrong with Benchmarking? | | The focus on comparison rather than outcomes is
misguided, and comparing one retirement plan to another can be pointless, says
Josh Itzoe, partner and managing director of Greenspring Wealth Management. First-generation
benchmarking solutions have a major weakness, according to Itzoe, who manages
the institutional client group of the firm, in Towson, Maryland. “These tools
are primarily comparison-focused rather than improvement-focused,” he tells
PLANSPONSOR. “As an industry, I think we’ve misled plan sponsors into thinking
that the only thing that really matters is whether their plan compares
favorably to other plans.” The problem with this logic is the “curse of the
comparison mindset,” Itzoe says. “Imagine if I benchmark Plan A, which is
dreadful, against Plan B, which is really dreadful. The fiduciaries of Plan A
will probably feel pretty happy with themselves, because in the land of
dreadfulness their plan reigns supreme.” A favorable comparison can make plan
sponsors feel good, Itzoe says, but he asks whether benchmarking in the
traditional sense—that is, the simple comparison of one plan to other
plans—really makes any difference for the company and for the lives of its
workers. | | | Market Mirror | | Yesterday, the Dow slipped 34.04 points
(0.21%) to 16,418.68, the NASDAQ decreased by 1.77 (0.04%) to 4,334.45, and the
S&P 500 slipped 0.87 (0.05%) to 1,877.17. The Russell 2000 closed 2.78 points
(0.23%) lower at 1,200.54, and the Wilshire 5000 was down 21.82 points (0.11%)
at 20,133.07.
On the NYSE, 3.2 billion shares traded,
with 1.3 declining issues for every advancing issue. On the NASDAQ, 2.6 billion
shares changed hands, with a 1.2 to 1 ratio of decliners to advancers.
The yields for the 10-year Treasury note and 30-year
Treasury bond were 2.781% and 3.725%, respectively.
| | | Rules & Regulators | | PBGC Finalizes Premium Changes | | The Pension Benefit Guaranty Corporation (PBGC)
has issued a final rule implementing changes to premium due dates and
calculations. In July 2013, PBGC proposed rules to simplify due dates,
coordinate the due date for terminating plans with the termination process,
make conforming and clarifying changes to the variable-rate premium rules, give
small plans more time to value benefits, and provide for relief from penalties,
as well as other changes. In January 2014, the agency issued a final rule
moving the flat-rate premium due date for large plans to later in the premium
payment year. The current rule finalizes all other items in the proposal. | | The Internal Revenue Service (IRS) is
encouraging small employers that provide health insurance coverage to their
employees to check out the Small Business Health Care Tax Credit. Small employers that
pay at least half of the premiums for employee health insurance coverage under
a qualifying arrangement may be eligible for this credit. The IRS offers
resources to help employers see if they qualify and estimate the credit. | | | Sponsored message from PLANSPONSOR | | PLANSPONSOR speaks with Elaine Sarsynksi from MassMutual Retirement Services about what the industry took away from 2013, and what plan sponsors can look forward to in 2014. | | | Small Talk | | ON
THIS DATE: In
1818, “Frankenstein; or, The Modern
Prometheus,” a book by 21-year-old Mary Wollstonecraft Shelley, was published. In
1861, in Montgomery, Alabama,
delegates from South Carolina, Mississippi, Florida, Alabama, Georgia,
Louisiana, and Texas adopted the Permanent Constitution of the Confederate
States of America. In 1918, just
before breakfast on the morning of March 11, Private Albert Gitchell of the
U.S. Army reported to the hospital at Fort Riley, Kansas, complaining of the
cold-like symptoms of sore throat, fever and headache. By noon, more than 100
of his fellow soldiers had reported similar symptoms, marking what are believed
to be the first cases in the historic influenza epidemic of 1918. The flu would
eventually kill 675,000 Americans and more than 20 million people (some believe
the total may be closer to 40 million) around the world. In 1941, President Franklin D. Roosevelt’s
Lend-Lease program—devised by Roosevelt as a means of aiding Great Britain in its war
effort against the Germans by giving the chief executive the power to
“sell, transfer title to, exchange, lease, lend, or otherwise dispose
of” any military resources the president deemed ultimately in the interest
of the defense of the United States—went into effect. In 1989, “COPS,” a documentary-style television series that follows
police officers and sheriff’s deputies as they go about their jobs, debuted on
Fox. In 1997, Paul McCartney, a
former member of The Beatles, was knighted by Queen Elizabeth II for his
“services to music.”
TUESDAY
TRIVIA: Martin Van Buren was the first president born
in the United States. All previous presidents were born were in places that
would later be a part of the United States, but were born before the United
States became country.
| | TRIVIAL PURSUITS: What
American slang term, spelled with only initials, was popularized by Martin Van
Buren’s campaign for president? | | Share the good news with a friend! Pass the Dash along – and tell your
friends/associates they can sign up for their own copy. | | News from PLANSPONSOR.com
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