Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 21st, 2015
Webcast Event
A large body of research now confirms the magnitude of the leakage problem in the U.S. retirement system. However, little has been done to investigate the behavioral drivers of leakage, especially cash-outs. This webcast covers the findings of fresh research conducted by Boston Research Technologies, offering revealing insights into job changer’s decisions about their retirement plan balances, particularly related to cash-outs, as well as their attitudes and behaviors towards portability (moving their retirement savings), such as leaving those balances in the former plan or rolling those assets over to their new plan or to an IRA. The session concludes with practical and effective steps that all plan sponsors should take, given the risks and opportunities that the study reveals.Read more >
Benefits & Administration
Generation X Most at Risk Financially
A review of Northwestern Mutual’s 2015 Planning and Progress Study data shows Generation X has the poorest financial habits of all generations in the survey. In addition to comprising the majority of “informal” planners, Gen X has more “spenders” than “savers” compared to other generations and is the least likely to have more savings than debt.Read more >
Health care insurers report continued rising premiums into 2016 with claim trends exceeding general inflation for at least the next 18 months, according to the Spring Healthcare Trend Survey from Wells Fargo Insurance, part of Wells Fargo & Co. Another challenge facing employers is the Patient Protection and Affordable Care Act (ACA) excise tax, or so-called Cadillac tax, on high-cost plans that will be effective in 2018, Wells Fargo notes.Read more >
Employers Tweaking Early Retiree Health Benefits
Challenges and opportunities created by the Affordable Care Act (ACA) are prompting 66% of companies to consider altering their pre-65 retiree health strategies over the next few years, Aon Hewitt finds. Of those companies considering a different strategy, 35% favor sourcing health coverage through the public exchanges under a defined contribution (DC) approach, according to Aon Hewitt’s 2015 Retiree Health Care Survey. More than one-quarter of companies (28%) are considering eliminating pre-65 retiree coverage and subsidies altogether.Read more >
Bills to Nullify the Retirement Security Rule Proposed in Congress
Dealing with Stress, Burnout in the HR, Benefits Department
Deals and People
BlackRock’s Retirement Head Ackerley Moving to Adviser Role
Washington State OKs Retirement Marketplace
The Small Business Retirement Marketplace is being launched under a bipartisan bill signed Monday by Washington Governor Jay Inslee. The measure will give companies with fewer than 100 employees an easily accessible option for employees to save in a tax-advantaged account. The state estimates 1.5 million Washington workers lack access to a workplace-based retirement savings account.Read more >
Sponsored message from SageView, Vanguard and Ayco
Building a Stronger Retirement Plan for Cabot Corporation
See how SageView, Vanguard, and Ayco helped their client Cabot Corporation redefine their retirement plan and push participation rates to 94%.Read more >
Market Mirror

Yesterday, the Dow was down 26.99 points (0.15%) at 18,285.40, the NASDAQ increased 1.71 points (0.03%) to 5,071.74, and the S&P 500 decreased 1.98 points (0.09%) to 2,125.85. The Russell 2000 inched up 2.08 points (0.17%) to 1,257.74, and the Wilshire 5000 slipped 15.77 points (0.07%) to 22,451.19.

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

The price of the 10-year Treasury note was up 12/32, decreasing its yield to 2.251%. The price of the 30-year Treasury bond increased 16/32, bringing its yield down to 3.051%.

From the Magazine
Who Pays for What Aspects of Your Plan?
When it comes to plan administration fees, “transparency definitely is ‘in vogue,’” says attorney Adam Cantor, who chairs the employee benefits and executive compensation group at Wolff & Samson PC in West Orange, New Jersey. For some sponsors, that includes rethinking how fees get paid and who pays them.Read more >
Does Your Plan Have a Leakage Problem?
A combination of plan design and targeted messaging is the best way to stem the flow of plan assets due to loans and cash-outs, experts say. Loans can have negative effects, says Todd Perala, director of BMO Retirement Services in Houston, noting that about half become distributions when participants terminate without repaying the loan, thereby losing any market upswings and doubling his tax liability.Read more >
Small Talk
ON THIS DATE: In 1832, in the U.S., the Democratic Party held its first national convention. In 1881, in Washington, D.C., humanitarians Clara Barton and Adolphus Solomons founded the American National Red Cross, an organization established to provide humanitarian aid to victims of wars and natural disasters in congruence with the International Red Cross. In 1901, Connecticut became the first state to pass a law regulating motor vehicles, limiting their speed to 12 mph in cities and 15 mph on country roads. In 1927, American pilot Charles A. Lindbergh landed at Le Bourget Field in Paris, successfully completing the first solo, nonstop transatlantic flight and the first ever nonstop flight between New York and Paris.
SURVEY SAYS: I recently read that the average amount per tooth the tooth fairy left American children last year was $3.40, but it ranged from $1.00 to $20.00. This week, I’d like to know, did you partake in the tooth fairy or other tooth-loss tradition when you were a child, and if so, how much did you get? If you have children, do they get more than you did? You may respond to this week’s survey by 6 p.m. Pacific time today.Read more >
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Copyright © Asset International, Inc., 2015.

All rights reserved.  No reproduction without prior authorization.

Editorial: Alison Cooke Mintzer


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