Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 4th, 2015
Webcast Event
You’ve read the recent headlines: Participants aren’t prepared. Employers aren’t confident. The message is clear—retirement is in trouble. But the path toward solving the problem isn’t well-defined. How can plan sponsors assist employees who are unsure of their financial futures? They can help participants reach their retirement goals by making sure the right benefits are in their 401(k) plans. Plan sponsors have choices, and in this webcast we will analyze three investment options and evaluate the merit of personalized portfolios to help answer the question, “What’s the right choice to help your employees retire?” Register now to join the discussion about this important topic.Read more >
Benefits & Administration
Employees Value Financial Education from Employers
Seventy-four percent of employees say they feel financial wellness should be part of their employers’ overall wellness programs. Retirement was ranked as the most important financial issue by respondents to a survey from Four Seasons Financial Education, followed by investments and budgeting and debt. However, only 12.1% said overall financial matters such as budgeting, saving and debt was covered in their employers’ programs.Read more >
Products, Deals & People
Mercer has appointed Kenneth Shimberg as U.S Endowment & Foundations (E&F) Chief Investment Officer for outsourced CIO services. Shimberg joins a dedicated team of not-for-profit professionals and will serve as chair of the E&F Investment Committee, which develops strategy and tactics for Mercer’s nonprofit client portfolios.Read more >
Economic Events
The U.S. Census Bureau of the Department of Commerce announced that construction spending during March was estimated at a seasonally adjusted annual rate of $966.6 billion, 0.6% below the revised February estimate of $972.9 billion. The March figure is 2.0% above the March 2014 estimate of $947.3 billion. During the first three months of this year, construction spending amounted to $206.7 billion, 3.2% above the $200.4 billion for the same period in 2014.
MOST READ ARTICLES
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Not Having a Retirement Drawdown Strategy Can Affect Retirement Security
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2021 Recordkeeping Survey
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Defined Benefit vs. Defined Contribution: Understanding the Costs of Each
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Considering the Arguments for and Against Actively Managed Funds in DC Plans
THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about factory orders for March. Thursday, the Labor Department will issue its initial claims report. Friday, the Bureau of Labor Statistics will reveal the unemployment rate for April, and the Census Bureau will report about wholesale inventories for March.
Market Mirror

Friday, the Dow closed 183.54 points (1.03%) higher at 18,024.06, the NASDAQ climbed 63.97 points (1.29%) to 5,005.39, and the S&P 500 gained 22.10 points (1.06%) to finish at 2,107.61. The Russell 2000 was up 7.98 points (0.65%) at 1,228.10, and the Wilshire 5000 increased 213.69 points (0.97%) to 22,247.99.

On the NYSE, 3.2 billion shares changed hands, with 1.5 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares traded, with a 1.4 to 1 ratio of advancers to decliners.

The price of the 10-year Treasury note decreased 21/32, bringing its yield up to 2.109%. The price of the 30-year Treasury bond fell 1 17/32, increasing its yield to 2.820%.

WEEK’S WORTH: For the week ending May 1, the Dow was down 0.31%, the NASDAQ lost 1.70%, and the S&P 500 decreased 0.48%. The Russell 2000 fell 3.11%, and the Wilshire 5000 finished 0.82% lower.

Compliance
Proposed Bill Would Repeal Health Plan ‘Cadillac’ Tax
Representative Joe Courtney (D-Connecticut) unveiled legislation from the House Ways and Means Committee to repeal the excise tax on high-cost health insurance plans scheduled to go into effect in 2018. The policy, sometimes referred to as the “Cadillac tax,” would apply a 40% tax to health insurance expenditures over $10,200 per person and $27,500 per family—it is one of the most controversial provisions of the Patient Protection and Affordable Care Act (ACA).Read more >
From the Magazine
An observation one can make from the 2014 PLANSPONSOR Defined Contribution (DC) Survey is that having an investment committee at a defined contribution plan correlates with positive outcomes. Overall, 74% of plans surveyed have an investment committee, but when viewed by size, only half (51%) the plans with fewer than 100 participants have an investment committee, while adoption among all other plan sizes is both higher and more uniform, ranging from 83% to 94%. This might be due to smaller plans having less administrative oversight in general, or just fewer people overall involved with the plan.Read more >
Insights: On Watch
Fiduciaries will do well to pay close attention to the Tibble v. Edison International case and its outcome. “Can you think of anyone who has influenced the world of personal finance more in the past 10 years than attorney Jerry Schlicter?” A personal finance columnist asked me that on the day litigation over excessive fees in 401(k) plans had its day of arguments in front of the Supreme Court justices. However, it was not just personal finance that Schlicter shook up. Our retirement plan industry, too, has been greatly affected by such lawsuits.Read more >
Investing
Could Key Foundational Issues Slow Indexing Trend?
The fiduciary duty prescribed by the Employee Retirement Income Security Act (ERISA) mandates close attention for fee issues, so it’s no surprise low-cost index funds have grown in popularity among retirement plan sponsors and advisers. Practitioners across the retirement plan industry are likely familiar with the positive features of index funds after years of increasing attention and use by institutional investors—generally lower fees and better transparency—but at least one advisory firm is urging investors to reconsider the wisdom of relying entirely on indexed products and portfolios.Read more >
Small Talk
ON THIS DATE: In 1715, a French manufacturer debuted the first folding umbrella. In 1776, Rhode Island declared its freedom from England two months before the Declaration of Independence was adopted. In 1865, Abraham Lincoln was laid to rest in his hometown of Springfield, Illinois. In 1965, San Francisco Giants outfielder Willie Mays hit his 512th career home run to break Mel Ott’s National League record for home runs. In 1970, in Kent, Ohio, 28 National Guardsmen fired their weapons at a group of anti-war demonstrators on the Kent State University campus, killing four students, wounding eight, and permanently paralyzing another.
SURVEY SAYS: Changing Workplace Demographics
Last week, I asked NewsDash readers, have you seen a change in the demographics of employees at your workplace? Generally, more respondents have seen an increase in younger employees and in female employees in their workplace in the last five years. Most respondents (54.3%) said they do not think an aging workforce and tendency to delay retirement has kept younger workers from finding positions in their desired careers. But, more than one-third (37.1%) said they do think so. Respondents who chose to leave comments about the changing demographics of the workforce are noticing an aging workforce—some say they ARE the aging workforce: “Unfortunately, I’m seeing the aging workforce when I look in the mirror.” A couple of younger respondents weighed in about how the aging workforce is not affecting their careers, and one told of trouble older workers are having finishing out their careers in a desirable job. Editor’s Choice goes to the reader who said: “Guess I pay more attention to birthdates and darn! I have a lawnmower older than some employees (in some cases it works better, too).” A big thank you to all who participated in our survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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