NewsDash – March 12, 2015

March 12th, 2015

Benefits & Administration

Failing Multiemployer Plans Face More Reduced Benefits

A Pension Benefit Guaranty Corporation (PBGC) study finds that more than half of the people in terminated multiemployer plans that run out of money in the near future face a reduction in benefits under current PBGC guarantees. This compares to 20% of workers and retirees who saw reduced benefits under plans that have already run out of money and are relying on PBGC financial assistance. The study, PBGC’s Multiemployer Guarantee, also looks at the depth of benefit reductions.Read more >

Objectives Met by DC Health Benefit Arrangements

Employers should understand whether a defined contribution (DC) health benefit arrangement will help them achieve their goals. In an article from Towers Watson, Randall K. Abbott, leader and senior strategist, Health and Group Benefits, North America, contends four factors have converged to bring the DC approach to the forefront: growth of the private exchange model for the delivery of health benefits; employers’ ongoing concern as health benefit costs continue to rise; the idea of de-risking health benefits; and the 2018 excise tax on high-cost health plans. But, some employers may be considering a defined contribution health benefit arrangement for the wrong reasons.Read more >

Products, Deals & People

To help plan sponsors with fiduciary duties and day-to-day administrative tasks, BB&T Retirement and Institutional Services has created 3(16) Alliance Services.Read more >

DuPont Capital Management hired William Smith, Jr., as principal, business development, and Paul Leahy as head of relationship management. Smith takes on responsibility for direct marketing and sales to institutional retirement plans and consultants. Leahy will be focused on developing and maintaining DuPont Capital’s relationships with institutional clients and consultants.Read more >

Sponsored message from SEI

Read how leveraging an OCIO can help improve your DC plan lineup
An increasing number of organizations are seeing the benefits of this approach. This paper includes results from a recent survey of DC sponsors.Read more >

Market Mirror

Wednesday the Dow slipped 27.55 points (0.16%) to 17,635.39, the NASDAQ closed 9.85 points (0.20%) lower at 4,849.94, and the S&P 500 decreased 3.89 points (0.19%) to 2,040.27. The Russell 2000 closed 7.33 points (0.61%) higher at 1,215.81, and the Wilshire 5000 was down 15.98 points (0.07%) at 21,600.93.

On the NYSE, 3.2 billion shares traded, with 1.4 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares changed hands, with a 1.5 to 1 lead for advancers.

The price of the 10-year Treasury note was up 7/32, decreasing its yield to 2.106%. The price of the 30-year Treasury bond increased 27/32, bringing its yield down to 2.683%.

Compliance

Supreme Court May Consider Reverse Stock Drop Case

An updated docket sheet on the U.S. Supreme Court website shows the court has invited the U.S. Solicitor General to file a brief in the case of Tatum v. RJR Pension Investment Committee et al., which asks whether an employer breaches its fiduciary duty to retirement plan participants under the Employee Retirement Income Security Act (ERISA) by dropping an investment from a plan without thoroughly investigating the prudence of doing so. The case also asks important procedural questions about what legal standards a fiduciary retirement plan committee should be judged against if it is found to have caused a loss to participant accounts—as well as questions about which party bears the burden of proof in ERISA litigation.Read more >

From the Magazine

Saxon Angle: Company Stock Cases

Stock drop litigation is on the rise. Plaintiffs are challenging fiduciaries of defined contribution (DC) plans maintained by employers whose prospects are allegedly so bleak as to render retention of the company stock fund imprudent, under Section 404 of the Employee Retirement Income Security Act of 1974 (ERISA). Of course, these latest actions are on the heels of the U.S. Supreme Court decision in Fifth Third Bancorp. v. Dudenhoeffer.Read more >

Small Talk

What Workplace Benefit Boost Do Employees Want?

A survey asked chief financial officers (CFOs) which workplace benefit boost, besides a salary increase, they think their employees are most interested in receiving this year. Forty-one percent of CFOs interviewed by Accountemps said employees would like better benefit plans, such as enhanced health benefits, in 2015. Nineteen percent said employees want more vacation days. However, when Accountemps asked employees the same question, 30% indicated they would like more vacation days and 26% selected better benefits.Read more >

ON THIS DATE: In 1789, the U.S. Post Office was established. In 1912, the Girl Scouts organization was founded. In 1933, eight days after his inauguration, President Franklin D. Roosevelt gave his first national radio address or “fireside chat,” broadcast directly from the White House. In 1947, in a speech asking the U.S. Congress to help Greece and Turkey resist Communism, President Truman established the “Truman Doctrine,” establishing that the U.S. would provide political, military and economic assistance to all democratic nations under threat from external or internal authoritarian forces. In 1959, the U.S. House joined the U.S. Senate in approving the statehood of Hawaii. In 1974, “Wonder Woman” debuted on ABC-TV.

SURVEY SAYS: Aside from a salary increase, what workplace benefit boost would you most like this year?Read more >

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

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