Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 15th, 2015
Benefits & Administration
Low Interest Rates Ease Pension Debt Restructuring
Prolonged low interest rates have prevented pension plans from riding record-setting equity markets to a higher aggregate funded status—but there is a flip side to low interest rates when it comes to risk transfers and pension debt restructuring.Read more >
Products, Deals & People
Towers Watson has acquired Acclaris, a provider of software-as-a-service (SaaS)-based technology and services for consumer-driven health care and reimbursement accounts, including health savings accounts (HSAs), health reimbursement arrangements (HRAs) and other consumer-directed accounts. The acquisition enhances Towers Watson’s position as a health benefits administration and exchange provider.Read more >
Economic Events
In the week ending May 9, the advance figure for seasonally adjusted initial claims for unemployment insurance was 264,000, a decrease of 1,000 from the previous week’s unrevised level of 265,000, the Labor Department reported. The four-week moving average was 271,750, a decrease of 7,750 from the previous week’s unrevised average of 279,500. This is the lowest level for this average since April 22, 2000 when it was 266,750.                   The average interest rate for a 30-year, fixed-rate mortgage is 3.85%, up from 3.80% one week ago, according to Freddie Mac. The average interest rate for a 15-year, fixed-rate mortgage is 3.07%, up from 3.02%. The Producer Price Index (PPI) for final demand fell 0.4% in April, the Bureau of Labor Statistics announced. Final demand prices rose 0.2% in March and decreased 0.5% in February. In April, index for final demand goods declined 0.7%. Prices for final demand services edged down 0.1%.
MOST READ ARTICLES
1
Rush of Litigation Against Retirement Plans Expected to Continue
2
TRIVIAL PURSUITS: Meaning and Origin of the Idiom “Watershed Moment?”
3
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
4
2020 Recordkeeping Survey
5
Essential Considerations for DC Plan Investment Lineups
Market Mirror

Encouraging data about the U.S. job market and inflation helped lift the market Thursday, the Associated Press reported. The Dow closed 191.75 points (1.06%) higher at 18,252.24, the NASDAQ climbed 69.10 points (1.39%) to 5,050.80, and the S&P 500 gained 22.62 points (1.08%) to finish at 2,121.10. The Russell 2000 increased 12.83 points (1.04%) to 1,245.11, and the Wilshire 5000 was up 227.12 points (1.02%) at 22,387.05.

On the NYSE, 3.2 billion shares traded, with advancing issues outnumbering declining issues more than 3 to 1. On the NASDAQ, 2.8 billion shares changed hands, with a more than 2 to 1 lead for advancers.

The price of the 10-year Treasury note increased 12/32, bringing its yield down to 2.232%. The price of the 30-year Treasury bond climbed 21/32, decreasing its yield to 3.052%.

Compliance
Experts Say Hardship Self-Certification Was Never Allowed
The Internal Revenue Service (IRS) recently issued a publication about appropriate documentation retirement plan sponsors should keep for participant hardship and loan requests. Some industry groups and providers say a recent IRS publication goes against prior guidance, but experts at the American Society of Pension Professionals and Actuaries (ASPPA) Virtual Conference disagree.Read more >
Sen. Lamar Alexander (R-Tennessee), chairman of the Senate’s Health, Education, Labor and Pensions Committee, led a group of 36 Senate Republicans requesting the Department of Labor (DOL) extend the comment period for its proposed rule on the fiduciary definition. Casting the proposed rule as potentially threatening to a wide swath of the investing public, the senators say that more time is needed for “thorough consideration of all issues and interests to make sure working and middle-income Americans are not harmed” by changes to the fiduciary standard prescribed by the Employee Retirement Income Security Act (ERISA).Read more >
Fiduciary Rule Could Have Unintended Consequences
The proposed conflicted investment advice rule from the Department of Labor (DOL), though designed to protect retirement plan and IRA participants, may actually hurt them, according to experts at the American Society of Pension Professionals and Actuaries (ASPPA) Virtual Conference.Read more >
From the Magazine
Are You Providing the Right Savings Opportunities?
When companies offer a retirement plan to their employees, “the overall objective of [all] plan sponsors should be the same—i.e., driving sustainable financial outcomes for their participants,” says Bradley Arends, CEO of Alliance Benefits in Albert Lea, Minnesota. However, sometimes just a defined contribution (DC) plan is not enough to properly prepare participants, and plan sponsors may want to consider adding supplementary savings vehicles.Read more >
Does Your TDF Match Your Participant Demographics?
Available in a variety of flavors—packaged, custom, proprietary, multi-manager—and with several different glide paths and underlying investments, target-date funds (TDFs) are a prevalent investment choice in today’s retirement plans. As the Department of Labor (DOL)’s 2007 qualified default investment alternative (QDIA) regulation mandates, target-date funds must be chosen deliberately according to the age or life expectancy of the defaulting participant group and plan demographics. Given their popularity, the fiduciary burden for retirement plan committees to prudently select and monitor the funds is high.Read more >
Small Talk

ON THIS DATE: In 1862, the U.S. Congress created the U.S. Department of Agriculture. In 1918, regular airmail service between New York City, Philadelphia and Washington, D.C., began under the direction of the Post Office Department, which later became the U.S. Postal Service. In 1930, Ellen Church became the first female flight attendant. In 1940, nylon stockings went on sale for the first time in the U.S. In 1942, gasoline rationing began in the U.S. The limit was three gallons a week for nonessential vehicles. In 1951, AT&T became the first corporation to have one million stockholders. In 1970, U.S. President Nixon appointed America’s first two female generals. In 1980, the first transcontinental balloon crossing of the United States took place. In 2014, the National September 11 Memorial Museum was dedicated in New York City.

 

And now it’s time for FRIDAY FILES!

One of the potential hazards of living to see your 102nd birthday.Read more >
Whether they like the house or not, potential home buyers won’t forget this house tour.Read more >
This is how your tooth gets pulled when your father is an Olympian javelin thrower.Read more >

In Bakersfield, California, a woman has filed a lawsuit against her former employer, claiming she was fired for disabling an app that tracked her 24/7. The former sales executive for money transfer service Intermex claims that her boss fired her shortly after she uninstalled the job-management Xora app that she and her colleagues were required to use on their company-issued iPhones, arstechnica.com reports. According to the lawsuit, the woman and her co-workers asked whether Intermex would be monitoring their movements while off duty. The boss admitted that employees would be monitored while off duty and bragged that he knew how fast the woman was driving at specific moments ever since she installed the app on her phone. The woman likened the app to a prisoner’s ankle bracelet and informed her boss that his actions were illegal, to which he replied that she should tolerate the illegal intrusion.                

In Mount Morris, New York, owners of Build-A-Burger told the Livingston County Sheriff’s Office that their surveillance system and cash register had been stolen early one morning. Deputies checked out a nearby hiking and biking path, where they found cash register parts, surveillance system parts, rubber gloves, loose change and “a steady trail of macaroni salad,” the Associated Press reports. Police say they later learned that three men had stolen a large bowl of the salad and took turns eating it while making their getaway.

In Beaver, West Virginia, a 43-year-old man went into a pharmacy wearing full camouflage and a paintball mask. The Associated Press reports that the would-be robber started spraying pepper spray in an effort to take down employees, but walked into the cloud of pepper spray in front of him. He staggered out of the business and got into a vehicle. Police investigating the incident discovered the name of the man who was driving the vehicle, and the driver identified the suspect.

In Coventry, Vermont, the latest Mother of the Year award contender—NOT!—has been charged with reckless endangerment and child endangerment. A concerned citizen showed police video of a Subaru station wagon driven by a man, with a woman and 5-year-old child on top. WCAX News reports that police say the car reached speeds of 50 to 55 mph during the two-mile ride. The child has been taken into protective custody.

In Xuzhou City, in east China’s Jiangsu Province, a 74-year-old man swears his cat gave birth to a Chihuahua. He says he took the cat to his friend’s house personally for her to mate, the UK’s Metro reports. She was put in a cage with a male cat for two days. But, he says he is certain he hand-delivered a Chihuahua. “This is very confusing. I hope the media reports this and we get some sort of explanation from a scientist,” he said, according to the news report.Read more >
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