Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 3rd, 2015
Benefits & Administration
Research Finds Little Cost Difference from Auto-Enrollment
By increasing defined contribution (DC) retirement plan participation, automatic enrollment likely increases employer compensation costs as previously unenrolled workers receive matching retirement plan contributions, but researchers have found this not to be true. A report suggests employers that use automatic enrollment in their defined contribution retirement plans may be using deferral and match rates that offset the costs of higher participation.Read more >
Employers Want to Help with Retirement Health Costs
Employers are taking a number of steps relating to health care costs to improve the retirement readiness of their current employees, a survey from Towers Watson finds. Employers are offering account-based health plans (ABHPs) (65%); educating employees and retirees about the cost they will incur beyond the employer subsidy (53%); promoting health, wellness and disease management programs to help retirees improve health and reduce out-of-pocket costs (49%); and offering financial planning resources and decision support tools to help employees understand and plan for the cost of medical coverage during retirement (41%). While employers want to maintain the promise of retiree health benefits to employees, a number of forces are influencing them to change their approach.Read more >
Paper Highlights ROI for Financial Education
An analysis from Purchasing Power, a voluntary benefits provider, suggests employers that invest in workplace financial education programs can eliminate employee stress and boost productivity—but strong outcomes require in-depth education programs that promote lifelong financial planning skills. “Employers may introduce a new benefit or two that put a Band-Aid on their employees’ financial stress or help with a short-term financial issue, but only a financial wellness education program is going to address the real problems and begin to change behavior,” says Elizabeth Halkos, chief revenue officer at Purchasing Power.Read more >
Economic Events
The U.S. Census Bureau of the Department of Commerce announced that construction spending during January was estimated at a seasonally adjusted annual rate of $971.4 billion, 1.1% below the revised December estimate of $982.0 billion. The January figure is 1.8% above the January 2014 estimate of $954.6 billion.
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Market Mirror

Yesterday, the Dow gained 155.93 points (0.86%) to finish at 18,288.63, the NASDAQ climbed 44.57 points (0.90%) to 5,008.10, and the S&P 500 increased 12.89 points (0.61%) to 2,117.39. The Russell 2000 closed 9.25 points (0.75%) higher at 1,242.62, and the Wilshire 5000 was up 133.91 points (0.60%) at 22,346.25.

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 near 2 to 1 lead for advancers.

The price of the 10-year Treasury note decreased 26/32, bringing its yield up to 2.086%. The price of the 30-year Treasury bond fell 1 30/32, increasing its yield to 2.688%.

Compliance
IRS Issues Guidance About ACA Cadillac Tax
The Internal Revenue Service (IRS) has issued Notice 2015-16 to initiate the process of developing regulatory guidance regarding the excise tax on high-cost employer-sponsored health coverage. The so-called Cadillac tax was added to the Internal Revenue Code by the Patient Protection and Affordable Care Act (ACA). The notice addresses: (1) the definition of applicable coverage, (2) the determination of the cost of applicable coverage, and (3) the application of the annual statutory dollar limit to the cost of applicable coverage.Read more >
From the Magazine
Insights: True Compensation
Recently, a plan sponsor told me of a difficult conversation she’d had with a plan participant—we’ll call him Mark. Mark was upset. He asked the plan sponsor why the company plan didn’t offer a match and wanted to know why the plan was using its third-party administrator (TPA) and recordkeeper, whose fees were more expensive than those of other small-business retirement plans he had read about online. Upon reflection, the plan sponsor admitted she could have handled her response better.Read more >
Small Talk

ON THIS DATE: In 1845, Florida became the 27th U.S. state. In 1863, during the Civil War, the U.S. Congress passed a conscription act that produced the first wartime draft of U.S. citizens in American history. In 1923, the first issue of Time magazine was published. In 1931, President Herbert Hoover signed a congressional act making “The Star-Spangled Banner” the official national anthem of the United States. In 1999, Bertrand Piccard and Brian Jones began their attempt to circumnavigate the Earth in a hot air balloon non-stop. They succeeded on March 20, 1999.

 

TUESDAY TRIVIA: Louisiana and Maine are the two states in the U.S. with the highest percentage of people who speak French at home.

TRIVIAL PURSUITS: What is ergophobia?Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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