| Benefit Briefs | Younger, Newer Employees the Plan Participation Challenge | Millennials continue to be the big challenge for
retirement plan participation, Wells Fargo Institutional Retirement and Trust
finds. Wells Fargo’s quarterly analysis of key trends among the four million
eligible employees for whom it provides an employer-sponsored 401(k) plan shows
about one-third (34%) of Millennial workers participate in their 401(k) plans
on average. However, this number jumps up to 70% for Millennials who are
automatically enrolled in their 401(k) plans. There is good news, however, as
younger and newer employees who are participating in their 401(k) plans are
saving at better levels and more diversified in their investments. | 401(k) account balances have increased 93% since
the economic downturn of 2009, according to research from The Principal
Financial Group. While much of the increase reflects a rebounding market, the
study found a significant increase in participation and savings rates since the
market collapse, with account balances rising 17% in 2013 alone to an average
of $54,000. | Complete Stats Paint Rosier Retirement Savings Picture | Some of the statistics on 401(k) balances and
coverage commonly tossed around are flawed, feels Drew Carrington of Franklin
Templeton. The defined contribution (DC) system is in much better shape than
the headlines that blare, “The U.S. retirement system is a failure,” says
Carrington, Franklin Templeton’s head of defined contribution, investment only
(DCIO) institutional. Average balance statistics in 401(k) plans are among
Carrington’s least favorite. “It’s completely meaningless,” he tells
PLANSPONSOR. | | Buyer's Market | Qualified Plans, LLC (QP) has acquired Benefits
Administration Services, LLC (BAS), in Birmingham, Alabama. According to QP,
BAS is a plan administrator of defined contribution retirement plans in the
small and mid-market. The acquisition will increase QP’s client base by about
15%. “The acquisition complements our internal growth and follows two
previously successful acquisitions in Illinois and Connecticut. Additionally, the
highly experienced staff of Benefits Administration Services increases our
depth of experienced plan administrators and relationship managers,” a QP
spokesperson told PLANSPONSOR. | Consultant Releases Fiduciary Responsibilities Refresher | A new white paper helps plan fiduciaries
understand their responsibilities and adhere to the standards of conduct that
apply to them. “Fiduciary Roles and Responsibilities Under ERISA Defined
Contribution Retirement Plans,” from Strategic Benefit Services, presents an
overview of Employee Retirement Income Security Act (ERISA) and Department of
Labor (DOL) requirements for plan fiduciaries and others with direct
responsibility for retirement plans. | | Industry Voices | Same-Gender Marriage Benefits: What Plan Sponsors Should Know | In U.S. v.
Windsor, the U.S. Supreme Court issued a clear message: Same-gender
marriages should be equal to opposite-gender marriages in the eyes of federal
law. Most important for retirement plan sponsors, this applies to the federal
Internal Revenue Code (the Code) and the Employee Retirement Income Security
Act (ERISA). However, from the boots-on-the-ground perspective of a retirement
plan sponsor, this decision presented several shades of gray as far as
implementation. | | Economic Events | In the week
ending May 24, the advance figure for seasonally adjusted initial claims for
unemployment insurance was 300,000, a decrease of 27,000 from the previous
week’s revised level, the Labor Department reported. The previous week’s level
was revised up by 1,000 from 326,000 to 327,000. The four-week moving average
was 311,500, a decrease of 11,250 from the previous week’s revised average.
This is the lowest level for this average since August 11, 2007 when it was
311,250. The previous week’s average was revised up by 250 from 322,500 to
322,750.
The average interest rate for a 30-year fixed-rate
mortgage is 4.12%, down from 4.14% one week ago, according to Freddie Mac. The average
interest rate for a 15-year fixed-rate mortgage is 3.21%, down from 3.25%.
| | Market Mirror | Thursday, the Dow was up 65.56 points
(0.39%) at 16,698.74, the NASDAQ increased 22.87 points (0.54%) to 4,247.95,
and the S&P 500 closed 10.25 points (0.54%) higher at 1,920.03. The Russell
2000 ticked up 3.39 points (0.30%) to 1,140.07, and the Wilshire 5000 closed at
20,332.99, up 103.08 points (0.51%).
On the NYSE, 3.2 billion shares changed
hands, with a more than 2 to 1 lead for advancers. On the NASDAQ, 2.7 billion
shares traded, with 1.4 advancing issues for every declining issue.
The price of the 10-year Treasury note was up 1/32,
bringing its yield down to 2.463%. The price of the 30-year Treasury bond
increased 3/32, decreasing its yield to 3.321%.
| | Rules & Regulators | Court Deems MassMutual a Fiduciary for Setting Compensation | A plan sponsor’s lawsuit over revenue sharing
payments has moved forward as a court found the sponsor’s plan provider became
a functional fiduciary by setting fees. Saris found MassMutual exercises the discretionary
authority to determine its own compensation by setting separate investment
account management fees (up to a maximum), which in combination with revenue
sharing payments (RSPs), make up the provider’s compensation package. “A
reasonable fact-finder could determine that MassMutual functions as an ERISA
functional fiduciary … to the extent it determines its own compensation, takes
fees out of the separate accounts, and has the discretion to offset some or all
of the RSPs against management fees as its compensation,” she wrote. | | The World at Large | Three in four small defined contribution (DC) schemes
in the UK are missing at least 10 of the Pensions Regulator’s quality features
for DC schemes, according to a report from the regulator. | | Small Talk | ON
THIS DATE: In
1806, Revolutionary war veteran and
future President Andrew Jackson killed attorney Charles Dickinson in a duel. In
1868, by proclamation of General
John A. Logan of the Grand Army of the Republic, the first major Memorial Day
observance was held to honor those who died “in defense of their country
during the late rebellion.” Known to some as “Decoration Day,”
mourners honored the Civil War dead by decorating their graves with flowers. In
1911, Ray Harroun drove his
single-seater Marmon Wasp to victory in the inaugural Indianapolis 500. In 1922, former President William Howard
Taft dedicated the Lincoln Memorial on the Washington Mall. In 1971, the U.S. unmanned space probe Mariner 9 was launched on a mission to
gather scientific information on Mars, the fourth planet from the sun. The
1,116-pound spacecraft entered the planet’s orbit on November 13, 1971, and
circled Mars twice each day for almost a year.
And now it’s time for FRIDAY FILES!
| Even five-year-olds may have to make some hard
relationship decisions. | In Shellbrook,
Saskatchewan, Canada, power crews faced a dilemma when a black bear climbed
up a power pole and stretched out for a nap. They were concerned about how to
get the bear down without hurting it or causing an outage. But, the Sun News
reports the bear climbed down on its own after its “power nap.” | In Winder, Georgia, a woman
and her mother went into the Barrow County Sheriff’s office to lodge a
complaint against the woman’s ex-husband. The two charged that the younger
woman’s former spouse had placed her and her residence “under a spell or
spells.” They claimed he did this with the assistance of his mother. According
to The Smoking Gun, to support their claim, the women said they believe it
because the ex-husband is able to know what they do and where they go. They also
allege one of the spells caused the young woman’s health issues that have been
going on for the past year since her divorce.
In Nottingham, U.K., a woman
is in jail after applying for a passport. You see, she applied for a passport
in her husband’s name, twice, and he’s been dead since 2007. However, that’s
not the only reason she is jailed. Seems the passport application process led
officials to discover that she was caught speeding on two occasions in 2008 by
speed cameras and paid the fines, but avoided getting points put on her driving
record by claiming her husband had been doing the driving. She has been
sentenced to six months in jail for two counts of perverting the course of
justice and two of making fraudulent applications to get a passport.
| In Changsha,
Hunan Province, China, an auto parts company owner recently got a patent
for his “suitcase scooter.” It can go 12 mph and cover 37 miles on one charge
of its lithium battery. I’d love to have this in the airport. | In Fort Lauderdale, Florida,
a Circuit Court judge was arrested in the courthouse parking lot when she
arrived for work and struck a parked Sheriff’s Office vehicle with her
BMW. She repeatedly hit the gate of the
judges’ parking lot with her BMW, the Orlando Sun-Sentinel reports. Deputies
said the judge admitted to taking an Am.bien pill the night before, and she did
not appear to have been drinking alc.ohol. She was booked into the main jail on
one count of driving under the influence and one count of driving under the
influence and causing property damage.
In Philadelphia,
Pennsylvania, an auto body shop owner is accused of running a $5 million
insurance scam. According to the Associated Press, the man coached customers who
had been involved in crashes to claim they had struck a deer rather than a car.
That way, insurance companies would consider them “no fault”
accidents and pay the claims without raising the customers’ premiums. Investigators
say the man stored deer carcass.ses, blood and fur in the back of his shop to
use as props. Also charged are the man’s wife, son and daughter, several
insurance adjusters, tow truck drivers, a city official and a police officer—41
people in all.
Have a great weekend! | Share the good news with a friend! Pass the Dash along – and tell your
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