Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 28th, 2015
Benefits & Administration
Roll-Ins Could Be Answer to 401(k) Cash-Outs
Why can’t 401(k) plans be more easily portable? According to Retirement Clearinghouse’s research, that’s what most participants want: the ability to roll over assets from a plan held with a former employer to the plan of their new employer. Yet cash-outs are a persistent problem when people change jobs, putting retirement savings at risk for all age groups.Read more >
Public Pensions Need Transparency from All Parties
Earlier this month, the National Conference on Public Employee Retirement Systems (NCPERS) announced that public pension plans will begin asking their service providers to commit to a new set of ethical guidelines designed to protect the interests of plan participants and beneficiaries. The NCPERS Code of Conduct for Public Pension Service Providers sounds very similar to requirements spelled out by the Employee Retirement Income Security Act (ERISA) and points made in the Department of Labor’s recent proposal for a new definition of fiduciary. The code of conduct defines reasonable practices for public pension service providers, but are there practices public pensions should adhere to themselves?Read more >
Encouraging Habitual Savings a Goal for Employers
“The survey demonstrates the benefits of habitual saving and highlights the need for making it a global trend,” Mike Mansfield, manager of retirement research at the newly founded Aegon Center for Longevity and Retirement, told attendees of a media event announcing the findings of the Aegon Retirement Readiness Survey 2015. Catherine Collinson, executive director of the Aegon Center for Longevity and Retirement, and president of the Transamerica Institute, shared that the 2015 findings reveal a slight continuing improvement in people’s sense of retirement readiness as measured by the Aegon Retirement Readiness Index (ARRI), created in 2012. The overall score was 5.9 out of 10, with India scoring highest at 7.0, Japan scoring lowest at 4.8, and the U.S. scoring 6.5. “We believe the slight increase is due to optimism in the improving economy rather than changes in behaviors,” Collinson said.Read more >
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Products, Deals & People
In response to the increased demand for pension buyouts Mercer has developed a Pension Risk Exchange to support defined benefit plan sponsors in timing and execution of buyout deals. The exchange delivers buyout price transparency and deal readiness, while ensuring plan participants are protected, Mercer says. The solution helps plan sponsors execute a buyout at more competitive prices and in a shorter time frame than is currently possible.Read more >
MetLife Offers Longevity Annuity for DC Plans
A new deferred income annuity from MetLife is designed specifically for the institutional market and is available for qualified defined contribution (DC) retirement plans. Roberta Rafaloff, vice president, institutional income annuities, MetLife’s institutional retirement group, tells PLANSPONSOR the qualified longevity annuity contract (QLAC) is not an investment option. “We like to distinguish annuities from investments; they are insurance,” she says—so the QLAC will be included as a distribution option from the plan.Read more >
A white paper from Prudential Retirement outlines steps to prepare plan sponsors for future PRT transactions. According to Prudential, the white paper can help plan sponsors identify which path forward may be best—and once the sponsors decide what type of buyout they want to pursue, they can begin the process of transacting, which is outlined in detail through four phases.Read more >
Market Mirror

Major U.S. stock indices bounced back Wednesday from Tuesday losses. The Dow was up 121.45 points (0.67%) at 18,162.99, the NASDAQ climbed 73.84 points (1.47%) to 5,106.59, and the S&P 500 closed 19.29 points (0.92%) higher at 2,123.49. The Russell 2000 gained 15.60 points (1.26%) to finish at 1,254.36, and the Wilshire 5000 increased 198.55 points (0.89%) to 22,422.94.

On the NYSE, 3.2 billion shares changed hands, with 2.7 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares traded, with a 2.3 to 1 ratio of advancers to decliners.

The price of the 10-year Treasury note was up 3/32, decreasing its yield to 2.130%. The price of the 30-year Treasury bond increased 22/32, bringing its yield down to 2.867%.

Compliance
The Department of Labor (DOL) has issued additional frequently asked questions (FAQs) regarding implementation of the Patient Protection and Affordable Care Act (ACA). The agency also announced an ACA compliance webcast to be held June 10.Read more >
From the Magazine
Considering PRT? Understand Your Goal
Two considerations are critical for defined benefit (DB) plan committees when discussing pension risk transfer (PRT), says Prudential’s Scott Kaplan: education about the various types of risk transfer options and weighing the cost of taking action against the cost and risk of maintaining the plan.Read more >
Small Talk
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 snowballed into the Seven Years’ War. In 1892, the Sierra club was organized in San Francisco. In 1961, Amnesty International, a human rights organization, was founded. 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. In 2014, author and poet Maya Angelou died at age 86 at her home in Winston-Salem, North Carolina.
SURVEY SAYS: This past Monday marked the unofficial start of summer, so it’s time for our annual Summer Reading List survey. In addition to what you plan/hope to read this summer, I’d like to know, do you ever check out books from the public library? You may respond to this week’s survey by 6 p.m. Pacific time today.Read more >
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