Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 26th, 2015
2015 Plan Sponsor of the Year Winners
Announcing Our Plan Sponsor of the Year Award Winners
Each year, the editors of PLANSPONSOR magazine—the industry’s leading resource for retirement benefits-related news—recognize plan sponsors that demonstrate leadership in providing a more secure retirement for workers. Each Plan Sponsor of the Year finalist and winner will be recognized at PLANSPONSOR’s Annual Awards for Excellence dinner in New York City on March 31, and is also featured in the March issue of PLANSPONSOR magazine. We are pleased to announce the 2015 winners for our annual Plan Sponsor of the Year awards, across eight categories.Read more >
Benefits & Administration
Near Retirees Can Expect $400K in Health Care Costs
Average expected retirement health care costs for Medicare B, D and Supplemental insurance for a healthy couple retiring this year at age 65 will be $266,589 in today’s dollars, according to HealthView Services’ “2015 Retirement Health Care Cost Data Report.” For a couple retiring in 10 years at 65, expected costs will rise to $320,996. However, retirement health care costs are even higher when expected dental, vision, hearing, co-pays and all other out-of-pocket costs are included. With these additional components, total projected retirement health care costs rise to $394,954 for a couple retiring this year at age 65. For a 55-year-old couple retiring in 10 years, total lifetime health care costs are expected to be $463,849.Read more >
Major pension risk transfer (PRT) deals announced by Bristol-Meyers Squibb and Motorola in 2014 and Kimberly-Clark in February 2015, in addition to more than 300 non-jumbo deals, total approximately $9 billion to $10 billion since 2011, according to the Mercer Global Pension Buyout Index. Mercer notes that historically, most bulk buyouts were for full plan terminations but, recently, there has been a significant increase in the proportion of sponsors buying out retirees only.Read more >
MOST READ ARTICLES
1
Another Schlichter Suit Targets Sponsor and Providers
2
2020 Recordkeeping Survey
3
Participants Are Saving More With ‘TDF-Plus’ Strategies
4
The NQDC Market
5
2020 Best in Class DC Providers
A New Retirement and Income Planning Needs
More than half (55%) of Americans are considering working during their retirement, according to Franklin Templeton’s 2015 Retirement Income Strategies and Expectations (RISE) survey. Nearly one-third (30%) of survey respondents ages 18 to 24 say they never plan to retire. Americans are reasonably good at estimating their expenses at retirement, but they tend to underestimate the impact of inflation later in retirement, Franklin Templeton found.Read more >
An analysis from the Investment Company Institute (ICI) finds retirement assets of U.S. investors reached $24.7 trillion as of December 31, up 1.7% during the year’s final quarter and 6% from year-end 2013. With the year-end 2014 results, retirement assets now account for approximately 36% of all household financial assets in the United States, ICI says.Read more >
EBRI Calculates Savings Need by Age and Gender
A new analysis from the Employee Benefit Research Institute (EBRI) shows that timing really counts when it comes to successful retirement savings efforts: The earlier a person starts saving, the less he or she will need to put aside every year. The research findings are not groundbreaking, EBRI admits, but they highlight an important truth in retirement planning—the longer people wait to start saving, the more they will have to divert each month to catch up. This effect is magnified by the benefits of compounding, which often make long-term savings delays nearly impossible to recover from for real-world savers.Read more >
The loss of health is more costly to a retiree’s overall experience in retirement than the loss of wealth. A study by MassMutual reveals 80% of retirees in better health report having a positive experience in retirement, compared with 59% of those who are in poorer health, regardless of how many assets they own. The study also finds that among retirees in better health, seven out of 10 (73%) say they feel financially secure, while only half (51%) who are in poorer health say the same.Read more >
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Products, Deals & People
Northwestern Mutual announced it will acquire LearnVest, a provider of online financial planning and client experience technology. The partnership joins Northwestern Mutual’s financial professionals and products with LearnVest’s technology and financial planning platform.Read more >
Economic Events
New orders for manufactured durable goods in February decreased $3.2 billion or 1.4% to $231.3 billion, the U.S. Census Bureau announced.  This decrease followed a 2.0% January increase. Excluding transportation, new orders decreased 0.4%. Excluding defense, new orders decreased 1.0%. Transportation equipment, also down three of the last four months, led the decrease of $2.5 billion, or 3.5%, to $69.5 billion.
Market Mirror

Major U.S. stock indices lost ground yesterday after the report of decreased durable goods orders. The Dow fell 292.60 points (1.62%) to 17,718.54, the NASDAQ sank 118.21 points (2.37%) to 4,876.52, and the S&P 500 closed 28.28 points (1.35%) lower to finish at 2,063.22. The Russell 2000 dropped 29.58 points (2.34%) to 1,233.88, and the Wilshire 5000 lost 340.03 points (1.53%) to finish at 21,832.17.

On the NYSE, 3.2 billion shares changed hands, with 2.7 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a more than 4 to 1 lead for decliners.

The price of the 10-year Treasury note decreased 14/32, bringing its yield up to 1.924%. The price of the 30-year Treasury bond fell 28/32, increasing its yield to 2.508%.

Compliance
NQDC Plans a Target of Tax Reform Recommendations
A report from Democratic staff of the U.S. Senate Committee on Finance says nonqualified deferred compensation (NQDC) plans raise a number of issues of fairness. The report notes that these plans are generally only provided to highly compensated employees and give these employees some control over the timing of the inclusion of income for tax-filing purposes. Using an example identified for Senator Ron Wyden (D-Oregon), ranking member of the committee, by the nonpartisan staff of the Joint Committee on Taxation (JCT) and outside independent experts, the report states that a high-income earner can choose to avoid paying taxes on compensation for 20 years or even longer. In addition, these employees have the compounding benefit of accruing earnings tax-free during the deferral period.Read more >
The Multiemployer Pension Reform Act of 2014 (MPRA), enacted on December 16, 2014, revised the annual funding certification requirements for multiemployer plans. The revisions generally apply to certifications for 2015 and subsequent plan years. The Internal Revenue Service (IRS) reminds plan sponsors that for calendar year plans, the 2015 certification is due by March 31.Read more >
Investing
Consultants Say Income Replacement a Top TDF Goal
Among 58 consulting firms surveyed recently by PIMCO, more than one-third (35%) say the most important objective when evaluating target-date fund (TDF) glide paths is maximizing asset returns while minimizing volatility relative to the retirement liability. Additionally, 31% rank maximizing income replacement during retirement as the top goal for glide paths. None of the firms surveyed reported maximizing expected retirement savings balances as the most important objective.Read more >
Small Talk
ON THIS DATE: In 1804, the U.S. Congress ordered the removal of Native Americans east of the Mississippi to Louisiana. In 1804, the Louisiana Purchase was divided into the District of Louisiana and the Territory of Orleans. In 1885, Eastman Kodak (Eastman Dry Plate and Film Co.) produced the first commercial motion picture film in Rochester, NY. In 1953, American medical researcher Dr. Jonas Salk announced on a national radio show that he had successfully tested a vaccine against poliomyelitis, the virus that causes the crippling disease of polio. In 1956, Red Buttons made his debut as a television actor in “Studio One” on CBS television. In 1982, ground breaking ceremonies were held in Washington, D.C., for the Vietnam Veterans Memorial. In 1997, following an anonymous tip, police found 39 victims of a mass sui.cide in a mansion in Rancho Santa Fe, a suburb of San Diego. The deceased were members of the “Heaven’s Gate” religious cult, whose leaders preached that suicide would allow them to leave their bodily “containers” and enter an alien spacecraft hidden behind the Hale-Bopp comet. In 2007, the design for the “Forever Stamp” was unveiled by the U.S. Postal Service.
SURVEY SAYS: We covered a survey that suggests participation in athletics during schooling years provides people with various skills that may be needed for success in a job or career. This week, I’d like to know, did you participate in athletics during your schooling years, and what skills, if any, did it give you for success in your career? You may respond to this survey by 6 p.m. Pacific time today.Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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