| | Benefit Briefs | | ACA Not the Reason for Increase in Number of Part-Timers | | An increase in the number of employers hiring part-time
workers rather than full-time workers is more likely be due to economic reasons
than legislative ones. A report from the Employee Benefit Research Institute
(EBRI) also indicates the likely reasons for any future shift to part-timers
will be due to the economy or unemployment rates. While some are asking if the
Patient Protection and Affordable Care Act (ACA) is the cause for the increase
in number of part-time workers, the report reveals the shift was already
underway prior to the enactment of the ACA. | | ERISA Offers Best Practices for K-12 403(b)s | | Emulating fiduciary principles of the Employee Retirement Income Security Act (ERISA) can help K-12 public school retirement plan sponsors improve outcomes for participants. Because public K-12 403(b) plans are exempted from ERISA, vendors are in many cases unregulated in key cost, investment and fiduciary areas of plan management, according to “Emulating ERISA: Providing a safety net for public K-12 educators,” a white paper from TIAA-CREF. “This leaves them in many unfortunate circumstances free to market questionable products on educators, in some cases with hidden and hefty fees,” the paper says. “The most important single element is to get the advice piece right,” Bruce Corcoran, managing director and head of the K-12 segment at TIAA-CREF in Charlotte, North Carolina, tells PLANSPONSOR. | | Longer-Term View Needed for TDFs | | Target-date funds (TDFs) for retirement plan
participants need to consider a longer investment time horizon, a paper from
Fidelity contends. Fidelity finds the wealth accumulated by a hypothetical
investor at an assumed retirement age of 65 following a longer,
“through-retirement” TDF glide path was greater than the wealth generated by a
“to-retirement” glide path in 90% of simulated macroeconomic scenarios. Through-retirement
investment programs generated more wealth when examining most historical
scenarios, Fidelity says. | | Easier Enrollment Leads to Better Participation | | Simplifying the 401(k) plan enrollment process
may help employees save more effectively for retirement, says a recent paper
from Bank of America Merrill Lynch. According to the paper, “Simplifying the
Path to Financial Wellness: Four Strategies to Help Increase 401(k) Participation,”
plan sponsors should consider reducing the number of upfront decisions employees
are required to make during enrollment. They should also present employees with
a limited number of contribution rate choices and investment funds to further
simplify decision making. | | | Buyer's Market | | Financial technology provider RiskFirst,
formerly PensionsFirst, has expanded the focus of its pension risk analytics
software for wider application in multi-asset portfolio management and
compliance settings. The firm will continue to offer the PFaroe risk management
platform to defined benefit (DB) pension plans, but moving forward, it will
adapt PFaroe to meet demand from other industries for this type of technology,
especially insurers and other buy-side risk managers requiring sophisticated
analytics to manage complex portfolios and to master regulatory complexity. | | | Industry Voices | | Plan sponsors invest significant resources to
determine the optimal strategic allocation of plan assets across various style
mandates and then select the best managers to implement those mandates. Staying
true to those mandates, which are typically benchmarked to an appropriate
index, is important in order to maintain the ongoing diversification of the
plan assets. Fortunately, active share analysis gives plan sponsors a very
effective tool to evaluate and document manager style drift and/or manager
conviction to their mandate over time. | | | Economic Events | | New orders
for manufactured durable goods in April increased $1.9 billion or 0.8% to
$239.9 billion, the U.S. Census Bureau announced. This increase, up three
consecutive months, followed a 3.6% March increase. Excluding transportation,
new orders increased 0.1%. Excluding defense, new orders decreased 0.8%.
Transportation equipment, also up three consecutive months, led the increase,
$1.7 billion or 2.3% to $76.9 billion.
The Conference Board Consumer Confidence Index, which
had decreased in April, improved moderately in May. The Index now stands at
83.0 (1985=100), up from 81.7 in April. The Present Situation Index increased
to 80.4 from 78.5, while the Expectations Index edged up to 84.8 from 83.9 in
April.
| | | Market Mirror | | Tuesday, the Dow was up 69.23 points
(0.42%) at 16,675.50, the NASDAQ climbed 51.26 points (1.22%) to 4,237.07, and
the S&P 500 increased 11.38 points (0.60%) to 1,911.91. The Russell 2000
gained 16.01 points (1.42%) to finish at 1,142.20, and the Wilshire 5000 closed
135.32 points (0.67%) higher at 20,258.82.
On the NYSE, 3.2 billion shares traded,
with advancing issues outnumbering declining issues more than 2 to 1. On the
NASDAQ, 2.7 billion shares changed hands, with a near 3 to 1 lead for
advancers.
The price of the 10-year Treasury note was up 6/32,
bringing its yield down to 2.516%. The price of the 30-year Treasury bond
decreased 22/32, increasing its yield to 3.362%.
| | | Rules & Regulators | | DOL Delays Fiduciary Redefinition Proposal Again | | The Department of Labor (DOL) is now saying its
re-proposal of what it calls “Conflict of Interest Rule-Investment Advice” will
be issued in January 2015. Also in January 2015, the DOL expects to issue notices
of proposed rulemaking about the safe harbor for the selection of annuity
providers for individual account plans, as well as including lifetime income
estimates on participants’ defined contribution account statements. | | | Small Talk | | Desk or No Desk: Perks and Downsides | | Workers in desk jobs and non-desk jobs were
equally likely to report being happy in their current roles (76%); however, a
survey from CareerBuilder finds workers in desk jobs were more likely to have
complaints about their work environment. Opportunity to build closer relationships
with company leaders and peers was reported as an advantage by 25% of those
with desk jobs, while 56% said a disadvantage is not enough physical activity.
Variety in their workday was cited as an advantage by 54% of those with
non-desk jobs, while 17% said they are less recognized for their efforts. | | The Department of Labor has issued a summer
reading list from its Books that Shaped
Work in America initiative, launched in 2013. | | ON
THIS DATE: In
1754, 22-year-old lieutenant colonel
of the Virginia militia George Washington successfully defeated a party of
French and Indian scouts in southwest Pennsylvania as Virginia attempted to lay
claim to the territory for its own settlers. The action started the Seven Years’
War. In 1937, the government of
Germany—then under the control of Adolf Hitler of the National Socialist
(Nazi) Party—formed a new state-owned automobile company, then known as
Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH. Later that year,
it was renamed simply Volkswagenwerk, or “The People’s Car Company.” In
1957, National League baseball team owners
voted unanimously to allow the New York Giants and Brooklyn Dodgers to move to
San Francisco and Los Angeles, respectively, at the mid-season owner’s meeting
in Chicago, Illinois. In 1983, Irene
Cara’s song “Flashdance (What a Feeling)”, from the Flashdance movie
soundtrack, went to the top of the U.S. pop charts. In 1998, the comedian and actor Phil Hartman, famous for his work on Saturday Night Live and NewsRadio, was shot to death by his
troubled wife, Brynn, in a murder-suicide. He was 49.
WEDNESDAY
WISDOM: “No
one is useless in this world who lightens the burden of it to anyone else.”—Charles Dickens, writer
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