Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 25th, 2015
Benefits & Administration
Incentives Bring Needed Participants to Wellness Programs
Financial incentives appear to be a crucial factor in bringing unhealthy workers into workplace wellness programs, according to an analysis by the Employee Benefit Research Institute (EBRI). Using administrative data from a large employer that provided anonymous participant information, EBRI analyzed the impact financial incentives had on the first-time participants in the employer’s wellness programs. EBRI found that, in general, individuals who first completed a health risk assessment (HRA) or biometric screening in the two or three years after financial incentives were offered were less healthy than early adopters. Moreover, prevalence rates of diabetes, high blood pressure and high cholesterol were all higher in the post-incentive groups than in the pre-incentive groups.Read more >
Ask the Experts
Is There a Restriction on Number of Investments?
“We have hundreds of investments in our Employee Retirement Income Security Act (ERISA) 403(b) retirement plan—NOT a brokerage window, but hundreds of actual investment options available directly to participants—which I feel is too many. Is there anything in ERISA or related Department of Labor (DOL) guidance that restricts the number of plan investments?”Read more >
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MOST READ ARTICLES

2021 Health Savings Account Survey
Data and Research
Health Care Costs in Retirement Remain a Top Stressor

2020 Recordkeeping Survey
Economic Events

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% in February after declining 0.7% in January, according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.2% in February, the same increase as in January.

 

Real average hourly earnings decreased by 0.1% in February, seasonally adjusted. Average hourly earnings increased by 0.1%, and the CPI-U increased by 0.2%. Real average weekly earnings decreased by 0.1% over the month.

 

Sales of new single-family houses in February were at a seasonally adjusted annual rate of 539,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.8% above the revised January rate of 500,000 and is 24.8% above the February 2014 estimate of 432,000.

Market Mirror

Tuesday, the Dow lost 104.90 points (0.58%) to finish at 18,011.14, the NASDAQ was down 16.25 points (0.32%) at 4,994.73, and the S&P 500 fell 12.81 points (0.61%) to 2,091.61. The Russell 2000 decreased by 1.23 (0.10%) to 1,263.48, and the Wilshire 5000 closed 120.82 points (0.54%) lower at 22,172.20.

 

On the NYSE, 3.2 billion shares traded, with a slight lead for decliners. On the NASDAQ, 2.8 billion shares changed hands, with a nearly even split between advancing and declining issues.

 

The price of the 10-year Treasury note increased 12/32, bringing its yield down to 1.871%. The price of the 30-year Treasury bond was up 1 2/32, decreasing its yield to 2.461%.

Compliance
Oral Misrepresentation Enough to State ERISA Claim
A federal court has rejected Munich Reinsurance America’s argument that a lawsuit against it should be dismissed because the plaintiff only asserts informal oral representations as amendments to its pension plan and not Employee Retirement Income Security Act (ERISA) plan documents. Richard Lees was hired by Munich’s predecessor, American Re-Insurance Company. From approximately October 28, 1996, through August 15, 1999, Lees worked for American but was paid by “an entity known as SMS.” In June 1999, American sought to transfer Lees from SMS’s payroll to American’s, and he advised the firm that he would agree to the transfer if it agreed to treat his time on the SMS payroll as time on the American payroll for the purpose of his pension benefits. According to the court opinion, human resource (HR) employees of American advised Lees that the firm would do so.Read more >
Investing
ESG Criteria Important for Majority of Investors
Chief investment officers (CIOs), heads of asset classes and portfolio managers all recognize the positive effects of environmental, social and governance (ESG) integration on risk-adjusted returns, according to Tycho Sneyers, managing partner and chairman of LGT Capital Partners ESG Committee. Research reveals the majority of institutional investors actively consider ESG criteria when making alternative investment allocations. Sneyers believes ESG analysis has moved beyond ethical concerns and has firmly found its place as a risk and investment management topic. A survey by LGT Capital Partners and Mercer shows most institutional investors are confident that ESG improves risk-adjusted returns and is an important aspect of risk and reputation management.Read more >
Examining Risk Management in TDFs
A new research paper from J.P. Morgan Asset Management seeks to educate plan sponsors and advisers about the dynamic interplay of risks involved in target-date fund (TDF) investing. Penned by a team of investing experts at J.P. Morgan, the paper evaluates the various risk management approaches utilized by different TDFs available in the defined contribution (DC) marketplace. Given the broad—and rapidly growing—adoption of these strategies in 401(k)s and other employer-sponsored retirement plans, the researchers argue now is clearly the time to get ahead of target-date risk trends.Read more >
Small Talk
School Athletic Activity Tied to Higher Income
Nearly three-quarters (73%) of American adults participated in some form of athletic activity throughout their schooling years, with half (49%) participating in school team sports and 44% taking up other team sports outside of school, according to a poll by Harris Interactive. The survey of 2,232 U.S. adults conducted online between January 14 and 20, 2015, suggests higher education levels are associated with participation in athletics. Sixty-four percent of those who participated in sports went through some level of higher education, compared with just 45% of those who did not participate. They are more likely to have capped off their education with a four-year college degree (20% vs. 14%) compared with those who didn’t participate and are also twice as likely to have some form of post graduate education (12% vs. 6%). Participation in athletics is also associated with higher incomes.Read more >
ON THIS DATE: In 1634, Lord Baltimore founded the Catholic colony of Maryland. In 1857, Frederick Laggenheim took the first photo of a solar eclipse. In 1954, RCA manufactured its first color TV set and began mass production. In 1958, Sugar Ray Robinson defeated Carmen Basilio to regain the middleweight championship. It was the fifth and final title of his career. In 1971, The Boston Patriots became the New England Patriots. In 1982, Wayne Gretzky became the first player in the NHL to score 200 points in a season. In 1983, the U.S. Congress passed legislation to rescue the U.S. Social Security system from bankruptcy. In 1996, the U.S. issued a newly redesigned $100 bill for circulation.
WEDNESDAY WISDOM: “Good advice is always certain to be ignored, but that’s no reason not to give it.” —Agatha Christie, English novelist
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