Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 23rd, 2014
Benefit Briefs
Plan Design Changes May Especially Benefit Women
Witnesses for a hearing about women’s retirement security advocated for Social Security improvements, expanded retirement plan access, and plan design changes. Those giving testimony for the Joint Committee on Taxation’s hearing noted that women generally have lower incomes than men, and due to caregiving responsibilities, women are more likely to step out of the work force for a time or work part-time. In addition, the decrease in the number of people getting married, and the likelihood married women will outlive their husbands, will affect the Social Security benefits of women. “The private retirement system which includes employer–sponsored plans needs to be extended so that those without access to a workplace plan will have the opportunity to save. These opportunities need to be extended to part-time and temporary workers,” M. Cindy Hounsell, JD, president of the Women’s Institute for a Secure Retirement, said.
The health care spend in 2014 for a typical American family of four covered by an average employer-sponsored health plan is $23,215, according to Milliman. While the amount has more than doubled over the past 10 years, growing from $11,192 to $23,215, the 5.4% growth rate from 2013 to 2014 is the lowest annual change since the Milliman Medical Index (MMI) was first calculated in 2002. Employers pay the largest portion of health care costs, contributing $13,520 per year, or 58% of the total, according to Milliman principals. However, increasing proportions of costs have been shifted to employees.
CalPERS Adopts Guiding Pension Beliefs
The California Public Employees’ Retirement System (CalPERS) Board of Administration has adopted a set of views about pension design, funding and administration. The “Pension Beliefs” will guide the pension fund’s practices and decisions. CalPERS says board members, executives and staff will use the 11 Pension Beliefs in their communications with members, employers, policymakers, other pension systems, the media and other stakeholders.
Buyer's Market
John Hancock Adds Asset Allocation Funds to Platform
John Hancock Retirement Plan Services added five new asset-allocation options to the JH Signature 401(k) Plan Platform. New offerings include target date fund (TDF) suites from T. Rowe Price and American Century, as well as additional target date and lifestyle portfolios from John Hancock.
Endowment Wealth Management, Inc. and ETF Model Solutions, LLC have partnered to launch the Endowment Index, a benchmarking tool for investors in globally-diversified, multi-asset portfolios that include alternative investments. The index is used for portfolio comparison, investment analysis, research and benchmarking purposes by fiduciaries such as trustees, portfolio managers, consultants and advisers to endowments, foundations, trusts, defined benefit/defined contribution plans, pension plans and individual investors.
Economic Events
In the week ending May 17, the advance figure for seasonally adjusted initial claims for unemployment insurance was 326,000, an increase of 28,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 297,000 to 298,000. The four-week moving average was 322,500, a decrease of 1,000 from the previous week’s revised average. The previous week’s average was revised up by 250 from 323,250 to 323,500. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.3% to a seasonally adjusted annual rate of 4.65 million in April from 4.59 million in March, but are 6.8% below the 4.99 million-unit level in April 2013, the National Association of Realtors reported. The average interest rate for a 30-year fixed-rate mortgage is 4.14%, down from 4.20% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.25%, down from 3.29%.
Market Mirror
Thursday, the Dow was up 10.02 points (0.06%) at 16,543.08, the NASDAQ increased 22.80 points (0.55%) to 4,154.34, and the S&P 500 closed 4.46 points (0.24%) higher at 1,892.49. The Russell 2000 climbed 10.24 points (0.93%) to 1,113.87, and the Wilshire 5000 closed at 20,024.77, up 67.42 points (0.34%). On the NYSE, 3.2 billion shares traded, with 1.8 advancing issues for every declining issue. On the NASDAQ, 2.7 billion shares changed hands, with a more than 2 to 1 lead for advancers. The price of the 10-year Treasury note was down 1/32, bringing its yield up to 2.554%. The price of the 30-year Treasury bond was up 2/32, bringing its yield down to 3.424%.
Rules & Regulators
IRS Finds Puerto Rico Pension Codes Misapplied
The Internal Revenue Service (IRS) has found some plan sponsors misunderstand Puerto Rico-related pension feature codes for Form 5500 filings. As part of its Hacienda Project, the IRS’ Employee Plans Compliance Unit examined whether plan sponsors were properly classifying plans that cover employees who are Puerto Rico residents.
Suit Says Union Employee Fired for Helping DOL
The U.S. Department of Labor (DOL) alleges a former Cement Masons Southern California Administrative Corp. employee was fired for cooperating with an ongoing DOL investigation. The corporation managed assets for five Cement Masons employee benefits trusts in southern California. The lawsuit alleges the individual had been making internal Employee Retirement Income Security Act (ERISA)-related complaints for some time.
Small Talk
ON THIS DATE:  In 1788, South Carolina became the eighth state to ratify U.S. Constitution. In 1879, the first U.S. veterinary school was established by Iowa State University. In 1900, Civil War hero Sgt. William H. Carney became the first African American to receive the Medal of Honor, 37 years after the Battle of Fort Wagner. In 1911, in a ceremony presided over by President William Howard Taft, the New York Public Library, the largest marble structure ever constructed in the United States, was dedicated in New York City. In 1934, notorious criminals Bonnie Parker and Clyde Barrow were shot to death by Texas and Louisiana state police while driving a stolen car near Sailes, Louisiana. In 1937, industrialist John D. Rockefeller died.   And now it’s time for FRIDAY FILES!
The search terms Googled most in each state.
How to pack everything you need into a carry on suitcase.
In Clayton County, Georgia, a high school student’s clever use of the periodic table elements may keep her from speaking at graduation. The senior class vice president used the names of elements in her yearbook quote that when abbreviated to their atomic symbol spell out, “Back that a** up.” “When the going gets tough just remember to Barium, Carbon, Potassium, Thorium, Astatine, Arsenic, Sulfur, Uranium, Phosphorus,” she wrote. “Basically, it was me just saying start all over again,” the student told WSBTV. “You have to go back and start all over.” Her mother thought the quote was funny. “My first reaction was, ‘You are such a nerd,’” she said. However, school administrators gave the girl an in-school suspension, barred her from participating in the annual senior walk and may even take away her privilege of speaking at graduation. In Portland, Oregon, a woman was driving her BMW in an intersection when A man dressed in chain-mail with a helmet, shield and carrying a sword and staff ran into traffic and started attacking her car. She called 911, reporting that “a pirate” was attacking her car. When police got there, they detained the man, who told officers he wasn’t a pirate but a “high-elf engaged in battle with the evil Morgoth,” reports KATU News. Morgoth is a character created by JRR Tolkien in a prequel to the Lord of the Rings stories. In the stories, he is the character from which all evil grew. The man was charged with criminal mischief and transported to Providence Hospital. He also told officers he had taken L.SD.
In Redington Beach, Florida, here’s an animal you don’t typically see at the beach in America.
In London, England, a man and woman entered a jewelry shop with a child in a baby buggy, looked at engagement rings, and left. The man returned alone 30 minutes later and looked at the rings again, then ran off with them, the Associated Press reports. However, he left his cell phone behind—with a photo of himself as the screensaver. In Gloucestershire, England, a man put on an inflatable sumo wrestler costume and began play-fighting with a colleague. You would think an inflatable costume would protect him from harm, but the Daily Star reports he bounced off his friend, fell back, and hit his head, knocking himself out. “The man was knocked unconscious for a short period before coming round but he was not fully alert. He was complaining of pain in his nose, left shoulder and left leg,” an ambulance service spokesman said. Have a happy weekend, everyone! And a big thank you to all our veterans! We will be off Monday, but NewsDash will be back in your inbox Tuesday.
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