Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 11th, 2014
Webcast Event
Now is the time to redefine success in a defined contribution (DC) retirement program—aligning the objectives of plan sponsors and participants—to drive better outcomes. Accumulation is a key component of successful planning, but the conversation needs to then shift to emphasize income distribution. Join us for a webcast in which we’ll explore ways to use an objectives-based approach to redefine success in your plan, revamp your investment menu to help participants make effective decisions as they invest for the future, and move away from a focus on accumulation to support results that will meet their future income needs.Read more >
Benefits & Administration
A federal judge last week approved the city of Detroit’s plan to get out of bankruptcy. Under the plan, retirees covered by the city’s general pension fund will see benefits decrease by 4.5%, while police and fire system retirees will see smaller cuts.Read more >
Products, Deals & People
Transamerica App Lets Savers See Blind Spots
Augmented reality technology via a mobile application (app) from Transamerica Retirement Solutions can help drive up retirement savings. Plan participants can use the app to enroll in the plan, increase contributions or assess their financial outlook for retirement.Read more >
Special Request from the GAO
If you are a defined contribution (DC) plan fiduciary who has considered adopting or has adopted a qualified default investment alternative (QDIA) for your plan, please consider answering a short questionnaire sponsored by PLANSPONSOR and the U.S. Government Accountability Office(GAO). Please note: GAO is not auditing or analyzing the policies or practices of any individual plan sponsor. All responses provided in this questionnaire will remain confidential. GAO will not attribute any provided information to any individual or company. GAO will accept responses to this questionnaire through December 19.Read more >
From the Magazine
Selecting and Benchmarking Advisers and Consultants
As with any relationship, it can be hard for plan sponsors to get what they want from a retirement plan adviser unless they define what that means at the start, says Dan Peluse, director of corporate retirement plan services for Wintrust Wealth Management in Chicago.Read more >
Market Mirror
Good company earnings reports are keeping major U.S. stock indices moving in a positive direction. Yesterday, the Dow was up 39.81 points (0.23%) at 17,613.74, the NASDAQ climbed 19.08 points (0.41%) to 4,651.62, and the S&P 500 closed 6.34 points (0.31%) higher at 2,038.26. The Russell 2000 gained 6.25 points (0.53%) to finish at 1,179.57, and the Wilshire 5000 increased 65.38 points (0.31%) to 21,447.21. On the NYSE, 3.2 billion shares changed hands, with 1.3 advancing issues for every declining issue. On the NASDAQ, 2.8 billion shares traded, with a 1.6 to 1 ratio of advancers to decliners. The price of the 10-year Treasury note decreased 17/32, bringing its yield up to 2.361%. The price of the 30-year Treasury bond fell 1 8/32, increasing its yield to 3.092%.
Compliance
Guidance for MEP Form 5500 Changes Issued
The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) published an interim final rule to implement Form 5500 annual reporting changes for multiple employer plans (MEPs). The Cooperative and Small Employer Charity Pension Flexibility Act, enacted on April 7, established additional annual reporting requirements for MEPs for plan years beginning after December 31, 2013.Read more >
Regulators Warn About Certain Health Plan Designs
Federal employee benefit regulators have become aware of certain group health plan benefit designs that lack coverage for in-patient hospitalization services being promoted to employers. The Department of Health and Human Services (HHS) and the Department of the Treasury announced they believe plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services (or both) do not provide the minimum value (MV) intended by the minimum value requirement in the Patient Protection and Affordable Care Act (ACA), and they will shortly propose regulations to that effect.Read more >
Investing
Alternative assets skyrocketed over six years, from $83 billion at the end of 2008, to $304 billion in mid-2014, according to Strategic Insight. In the “Alternatives Industry Analysis 2014,” Strategic Insight, an Asset International company, reports that registered alternative assets surpassed 2% of all mutual fund and exchange-traded product assets last year. Strategic Insight projects continued growth for the next five years, at an average annual clip of almost 20%. The report contends that the biggest single driver of demand for alternatives is volatility management and, therefore, capital protection for retirees.Read more >
Equities contributed to negative returns in the third quarter for the U.S. Master Trust Universe, says BNY Mellon. The median return of the BNY Mellon U.S. Master Trust Universe was -0.83% for the third quarter of 2014, ending four straight quarters of positive results. However, for the twelve months ending September 30, the median plan returned 10.16%.Read more >
Hedge Fund Growth to Persist Says Fitch
Two large U.S. public pension plans, California Pension Employees’ Retirement System’s (CalPERS) and San Francisco Employees’ Retirement System (SFERS), recently made decisions to pull back from hedge fund investments. In addition, hedge fund growth has slowed over the past several years. However, Fitch Ratings says the withdrawals are not representative of broader sector trends, and it predicts hedge fund assets under management (AUM) to increase from the 2013 year-end level of $2.6 trillion, attributing the growth to market appreciation and inflows outpacing redemptions.Read more >
The Wilshire Trust Universe Comparison Service (TUCS) shows performance was down for all plan types in the third quarter. The median performance for all plan types was -0.84% in Q3, as measured by Wilshire TUCS. “In a quarter where the Wilshire 5000 Total Market Index and Barclays U.S. Aggregate Index returns were up slightly at 0.08% and 0.17%, respectively, it is surprising to see that performance for all plan types was in the red,” says Robert J. Waid, managing director at Wilshire Associates.Read more >
In an effort to diversify their portfolios, institutions are making sizable investments in real assets and are planning to increase their level of activity next year, according to a Greenwich Associates report. “Data from Real Assets: An Increasingly Central Role in Institutional Portfolios” reveals that a majority of institutions active in real assets have target allocations in the realm of 10% of total portfolio assets.Read more >
Small Talk
ON THIS DATE: In 1620, the Mayflower Compact was signed by the 41 men on the Mayflower when they landed in what is now Provincetown Harbor near Cape Cod. The compact called for “just and equal laws.” In 1851, the telescope was patented by Alvan Clark. In 1889, Washington became the 42nd state of the United States. In 1918, at the 11th hour on the 11th day of the 11th month, Germany signed an armistice agreement with the Allies in a railroad car outside Compiégne, France, ending World War I. In 1921, exactly three years after the end of World War I, the Tomb of the Unknowns was dedicated at Arlington Cemetery in Virginia during an Armistice Day ceremony presided over by President Warren G. Harding. In 1940, the Jeep made its debut. In 1942, Congress approved lowering the draft age to 18 and raising the upper limit to age 37. In 1978, Donna Summer’s “MacArthur Park” reached the top of the Billboard Hot 100, giving the Queen of Disco her first No. 1 pop hit.   TUESDAY TRIVIA: The polymer known as “rubber” got its name when people in Britain figured out it could be used to erase or “rub out” mistakes made with a pencil.
TRIVIAL PURSUITS: John Quincy Adams was the first U.S. president to have one of these. What is it?Read more >
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 >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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