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| Ask the Experts | |
| Ask the Experts – ACP Testing After a Spin-Off | |
| “I read your recent Q&A regarding post-merger average contribution percentage (ACP) testing with great interest, as our hospital has an ACP testing issue as well. However, ours is the opposite of the issue you discussed in the previous article. Up until 2015, we were part of a two-hospital system, but effective January 1, 2015, the partnership was ended and we were spun off into a separate entity that is no longer part of the controlled group of the prior entity. Previously, we participated in a 403(b) matching plan with the other hospital; now, we have our own 403(b) matching plan that was established January 1, 2015. The plan covers the same employees of our hospital that it did previously, only under a new plan. My question is related to the prior year ACP for non-highly compensated employees (NHCEs) that we would use for 2015 testing, as our new plan uses the prior year testing method. I read somewhere that you can use an assumed ACP of 3% in the first year of a new plan. If this is true, this would be helpful since the ACP of the NHCEs in the prior plan for 2014 is only 2%. Or would we need to use the ACP of only the NHCEs of our hospital from the prior plan results? Any guidance you can provide would be greatly appreciated!”Read more > | |
| Products, Deals & People | |
| Cornelio to Retire from Lincoln | |
| Charles C. Cornelio is retiring as president of retirement plan services at Lincoln Financial Group, a position he has held since 2009. Cornelio will retire from his position in April after serving in a variety of roles at the organization.Read more > | |
| This tax-return season presents greater than usual potential for confusion, uncertainty, and expensive mistakes in Internal Revenue Service (IRS) filings for equity compensation plans, according to myStockOptions.com. Anyone who received income from equity compensation or sold shares in 2014 must understand the related reporting on IRS tax forms if they are to avoid costly errors on their tax returns. In the articles and FAQs of its Tax Center, myStockOptions.com provides guidance that can help taxpayers and their tax-return preparers file accurate and error-free IRS tax returns.Read more > | |
| NARPP to Offer Participant Education Evaluation Tool | |
| The National Association of Retirement Plan Participants (NARPP) is offering plan sponsors the opportunity to use its FELT study questionnaire internally, with their employees. NARPP’s participant FELT (Financial Empowerment, Literacy and Trust) study examines the key drivers of engagement and savings rates of participants and can be used to measure the impact of education programs and initiatives.Read more > | |
| Market Mirror | |
Bad earnings reports from some companies brought major U.S. stock indices lower Wednesday. The Dow fell 106.47 points (0.58%) to 18,096.90, the NASDAQ was down 12.76 points (0.26%) at 4,967.14, and the S&P 500 closed 9.24 points (0.44%) lower at 2,098.54. The Russell 2000 decreased 4.03 points (0.33%) to 1,230.73, and the Wilshire 5000 lost 97.28 points (0.44%) to finish at 22,158.52. On the NYSE, 3.2 billion shares changed hands, with 1.4 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with a 1.6 to 1 ratio of decliners to advancers. The price of the 10-year Treasury note was unchanged, with its yield at 2.119%. The price of the 30-year Treasury bond was up 1/32, bringing its yield down to 2.715%. | |
| From the Magazine | |
| A Plan Sponsor Provides a Total Compensation Statement | |
| In 2005, Farm Credit Foundations began sending employees an annual statement that covered their personalized health and welfare benefits. Cynthia Burkel, vice president, employee benefits, for Farm Credit Foundations in St. Paul, Minnesota, recalls that the statement also gave generalized information about retirement planning—including how much employees needed to defer to maximize the company match—and about the defined benefit (DB) plans. In addition to Farm Credit’s report, participants were sent an annual statement from the retirement plan’s recordkeeper, New York Life. Farm Credit Foundations coordinated the mailing of its homegrown document with New York Life’s statement for the convenience of the participants, but aspired to include all benefits information in one total rewards statement.Read more > | |
| Investing | |
| As pension plans aim to meet future obligations, liability-driven investing (LDI) seeks to use data to set a strategy that will more precisely match assets with liabilities and cash flow needs. A key consideration that could become even more significant for LDI programs is the age demographics of the plan population, according to “How Old Is Your Pension Plan? Matching Pension Investing to Plan Demographics,” a paper by Nuveen Asset Management. The main point of the paper, says Evan Inglis, a senior actuary in the institutional solutions group at Nuveen, is that the different parts of the plan’s liabilities have different characteristics. “Retirees are more predictable,” he tells PLANSPONSOR. “They are paid in the short term, and it’s easier to match assets to those liabilities.”Read more > | |
| Small Talk | |
| Using Retirement Planning Points to Memorize Pi | |
| March 14, 2015, is Super Pi Day because 3.1415 is the number Pi out to four decimal places. It only happens once every century. FinMason notes that Pi’s decimal places go on to infinity, and math types often compete to see how far out they can memorize the number. The investor education firm based in Boston, Massachusetts, says if you know three ages significant to retirement planning, you can memorize Pi out to 10 decimal places.Read more > | |
| ON THIS DATE: In 1770, “The Boston Massacre” took place when British troops fired on a crowd that was protesting British occupation of the colonies. In 1923, old-age pension laws were enacted in the states of Montana and Nevada. In 1956, the U.S. Supreme Court affirmed the ban on segregation in public schools. In 1963, the Hula-Hoop, a hip-swiveling toy that became a huge fad across America when it was first marketed by Wham-O in 1958, was patented by the company’s co-founder, Arthur “Spud” Melin. In 1984, the U.S. Supreme Court ruled that cities had the right to display the Nativity scene as part of their Christmas display. | |
| SURVEY SAYS: With the severe winter than many across the country have experienced this year, I’m sure most NewsDash readers are ready for spring. The switch to daylight savings time (DST) used to be the signal that spring was here to me, but now that DST comes earlier, that’s no longer the case. This week, I’d like to know, what signifies spring to you? And, what do you think about daylight savings time? You may respond to this week’s survey by 6 p.m. Pacific time today.Read more > | |
| Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more > | |
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com
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