| Webcast Event | Effectively educating participants cannot be
narrowly defined as “retirement education,” but must be viewed more
comprehensively—call it “financial wellness education.” Armed with
basic financial skills, most employees are better prepared to take on the
multifaceted challenges of achieving retirement success. The path to retirement
readiness is one best followed in incremental steps that build knowledge and
confidence over time, accommodating each participant’s level of sophistication
and desired learning pace, as well as every phase of a person’s life. In this
webcast, our speakers will analyze the employee education landscape, discuss
the impact of financial wellness education on retirement readiness, and share
best practices for creating an end-to-end education strategy.Read more > | | Benefits & Administration | DC Plans Important to Retirement Income Strategies | Some financial professionals suggest individuals
set up different ‘buckets’ for retirement income, and defined contribution (DC)
retirement plan sponsors can help them do so. Harold Evensky, chairman, Evensky
& Katz/Foldes Financial in Coral Gables, Florida, says one “bucket”
strategy is based on time or age: individuals would have a “bucket” of assets to
use from age 65 to 75, another to use from age 75 to 85, and another for after
age 85, for example. The bucket approach Evensky has suggested since the 1980s
is a split between a cash flow reserve and an investment component. Some of an
investor’s portfolio needs to be invested over a long time horizon to maximize
risk, he explains. But, for income needed in the short term, investors need to
minimize risk. DC retirement plans can offer options to help participants with
these ‘bucket’ strategies.Read more > | Due to a decrease in liability values and flat
asset values, the aggregate funded ratio for U.S. corporate pension plans
increased 2.2% for the month of April. According to Wilshire Consulting, the
funded ratio for April was 83.8%, up from 81.6% in March.Read more > |
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Investment Committee Solutions for Small Plans | According to professionals in the retirement
industry, most new sponsors of small or micro plans are unaware of the duties
of prudence, loyalty and diversification of investments that a fiduciary to a
plan assumes—or that the Employee Retirement Income Security Act (ERISA)
decrees they are a fiduciary. And, surveys have shown many small-plan sponsors
are confused about their fiduciary role. Many are also unclear that, while they
have no investment committee—the individual making plan-level decisions, in
essence, is that committee and must perform much the same functions the
committee of a mega plan does. For the unwary plan sponsor, this disconnect
could be costly, says Jim Philips, president of Retirement Resources.Read more > | Rather than making changes that diminish defined
benefit (DB) pensions, a report by the National Conference on Public Employee
Retirement Systems (NCPERS) advises closing tax loopholes. Data at the national
level showed that a trend of converting DB plans into defined contribution (DC)
plans exacerbated income inequality in the U.S.Read more > | | Sponsored message from SageView, Vanguard and Ayco | Building a Stronger Retirement Plan for Cabot Corporation See how SageView, Vanguard, and Ayco helped their client Cabot Corporation redefine their retirement plan and push participation rates to 94%.Read more > | | Ask the Experts | “I read with great interest your recent Ask the
Experts column about a benefits manager who worked with consultants to put
together investment information for an ERISA plan’s fiduciary committee
concerned about his/her fiduciary status. Were you saying that the individual
in question was NOT a fiduciary? It sounded to me as if the individual could
certainly be a fiduciary, even though that was clearly not his/her employer’s
intent as was stated.”Read more > | | Products, Deals & People | A new version of the SmartPlan retirement
educational program purports to be the first solution of its kind tailored
specifically to the Spanish-speaking community. SmartPlan Spanish supports
users with a culture-conscious approach to retirement education, according to
vWise Inc., the financial software and solutions provider behind SmartPlan. The
firm hopes the SmartPlan Spanish product will enhance employee engagement and
enrollment through interactive training sessions, similar to its original
counterpart.Read more > | | Market Mirror | U.S. stocks
ended lower Tuesday as crude oil climbed above $60 a barrel for the first time
this year, raising expectations for rising inflation and interest rates, and Greece’s
government remained in a standoff with its European creditors as a debt payment
looms next week, according to the Associated Press. The Dow was down 142.20
points (0.79%) at 17,928.20, the NASDAQ fell 77.60 points (1.55%) to 4,939.33,
and the S&P 500 decreased 25.03 points (1.18%) to 2,089.46. The Russell
2000 lost 17.80 points (1.44%) to finish at 1,215.42, and the Wilshire 5000
closed 268.01 points (1.20%) lower at 22,045.89.
On the NYSE,
3.2 billion shares traded, with declining issues outnumbering advancing issues
nearly 4 to 1. On the NASDAQ, 2.8 billion shares changed hands, with a more
than 3 to 1 lead for decliners.
The price of the 10-year Treasury note was down 12/32,
increasing its yield to 2.189%. The price of the 30-year Treasury bond
decreased 25/32, bringing its yield up to 2.919%.
| | Compliance | Plan Sponsors Eye Company Stock with Care | Last year’s unanimous Supreme Court decision in Fifth Third Bancorp v. Dudenhoeffer held
that fiduciaries of employee stock ownership plans (ESOPs) are subject to the
same duty of prudence that applies to fiduciaries in general per Section
1104(a)(1)(B) of the Employee Retirement Income Security Act (ERISA), except
that they need not diversify the fund’s assets, per Section 1104(a)(2). According
to Towers Watson’s recent survey of employers with company stock in their
defined contribution (DC) plans, new “stock drop” complaints are still being
filed, and several courts have refused to dismiss these suits in light of the
Dudenhoeffer decision. In March, for example, an investigation was launched
into possible ERISA violations by a multinational pharmaceutical company. Many
employers are reviewing the status of company stock as an investment option in
their DC plans.Read more > | Fidelity Wants Clarification About Loan and Hardship Records | Fidelity is taking issue with a recent Internal
Revenue Service (IRS) reminder to retirement plan sponsors about their duties
to track participant loans and hardship withdrawals. The IRS recently published
a newsletter article indicating that documentation must be created and
maintained by plan sponsors related to hardship distributions and loans—and
that electronic self-certification is not sufficient to substantiate a
participant’s hardship. Fidelity feels some information contained in the
article is “contrary to recent indications from IRS representatives.”Read more > | | From the Magazine | Optimizing Retirement Plan Committee Decisions | When it comes to evaluating their plan
committee’s effectiveness, sponsors need to form their own decisions about best
practices. The Employee Retirement Income Security Act (ERISA) does not tell
sponsors specifically who should make up their plan committee or what training
committee members should receive, says Eric Altholz, a partner at law firm
Verrill Dana LLP in Portland, Maine. “It really is left up to the sponsors to
decide,” he says. But, as always, the principle of acting prudently applies.Read more > | | Small Talk | ON
THIS DATE: In 1851,
the mechanical refrigerator was patented by Dr. John Gorrie. In 1933, President Franklin D. Roosevelt
signed an executive order creating the Works Progress Administration (WPA). The
WPA was just one of many Great Depression relief programs created under the
auspices of the Emergency Relief Appropriations Act, which Roosevelt had signed
the month before. In 1937, the
German airship Hindenburg, the largest dirigible ever built, exploded as it
arrived in Lakehurst, New Jersey. Thirty-six people died in the fiery accident
that has since become iconic, in part because of the live radio broadcast of
the disaster. In 1940, John
Steinbeck was awarded the Pulitzer Prize for his novel “The Grapes of Wrath.” In
1960, U.S. President Eisenhower
signed the Civil Rights Act of 1960.
WEDNESDAY
WISDOM: “Thinking
will not overcome fear, but action will.”—W. Clement Stone,
businessman and self-help book author
| Share the good news with a friend! Pass the Dash along – and tell your
friends/associates they can sign up for their own copy.Read more > | News from PLANSPONSOR.com
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