Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 13th, 2014
Benefits & Administration
Nonqualified Plans Have Education, Recordkeeping Issues
More than three-quarters (78%) of nonqualified retirement plan sponsors surveyed indicated they have some concerns and challenges with their plans. Topping the list of issues among nonqualified retirement plan sponsors is educating participants, increasing participation, maintaining compliance, and ensuring accuracy in the administration of the plan, according to the 2014 Wells Fargo Nonqualified Plan Benchmarking Survey.Read more >
Funded ratios of public pension plans rose modestly from last year, but remain near 70% despite several strong years of post-2009 investment returns, according to Milliman. The Milliman 2014 Public Pension Funding Study, which annually explores the funded status of the 100 largest U.S. public pension plans, found larger plans in the study tend to be better funded than the smaller plans in the study. The best funded plans, those in the top quartile of plans as measured by the sponsor-reported funded ratio, account for 34% of the aggregate sponsor-reported accrued liabilities, whereas the worst funded plans, those in the bottom quartile, account for only 18% of the aggregate sponsor-reported accrued liabilities.Read more >
Evaluating Outsourced Chief Investment Officers
The outsourced chief investment officer (OCIO) search is a formidable task even for experienced retirement plan committees, says Ronald Klotter, managing director of Strategic Investment Group. But while the challenge of finding the right provider is great, so is the potential performance improvement and ease of administration that an OCIO can bring to pension plan clients, Klotter noted in a recent webinar hosted by Strategic Investment Group. Klotter and other experts predict substantial growth in OCIO mandates, and during the webinar, they touched on a variety of key opportunities and challenges in the budding industry, especially among corporate defined benefit (DB) plans and not-for-profit endowments and foundations.Read more >
Great-West Financial added 514 new 403(b) clients in 2013, according to PLANSPONSOR’s 2014 403(b) Buyer’s Guide. Security Benefit added 194 new clients. Principal Financial Group, Planmember Securities Corporation and Mutual of America rounded out the top five providers by new 403(b) clients added in 2013.Read more >
Products, Deals & People
The Bloomberg, Morningstar, and Interactive Data databases now include historical data for the Endowment Index. The Endowment Index helps trustees, portfolio managers, consultants and advisers to endowments, foundations, trusts, defined benefit/defined contribution plans, pension plans and individual investors more appropriately track the performance of and analyze globally diversified, multi-asset portfolios.Read more >
Economic Events
The U.S. Census Bureau announced that September 2014 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $454.3 billion, up 0.2% from the revised August level and up 5.2% from the September 2013 level. September sales of durable goods were up 0.5% from last month and up 5.4% from a year ago. Sales of nondurable goods were down 0.1% from August, but were up 5.1% from last September.
Market Mirror
Wednesday, the Dow slipped 2.70 points (0.02%) to 17,612.20, the NASDAQ was up 14.58 points (0.31%) at 4,675.13, and the S&P 500 decreased by 1.45 (0.07%) to 2,038.23. The Russell 2000 climbed 6.50 points (0.55%) to 1,186.46, and the Wilshire 5000 ticked up 5.45 points (0.03%) to 21,468.12. On the NYSE, 3.2 billion shares traded, with a 1.2 to 1 ratio of advancers to decliners. On the NASDAQ, 2.7 billion shares changed hands, with 1.5 advancing issues for every declining issue. The price of the 10-year Treasury note was unchanged, with its yield up to 2.365%. The price of the 30-year Treasury bond slipped 1/32, increasing its yield to 3.096%.
Senate Committee Changes Could Impact Retirement Plans
The Senate’s shift to Republican control is important because it brings more unity to a long-divided Congress, but the result is muted by the fact that President Obama still has two years in office, notes with Judy Miller, director of retirement policy at the American Society of Pension Professionals & Actuaries (ASPPA) and executive director of ASPPA’s College of Pension Actuaries. She tells PLANSPONSOR that the shift in Senate control is probably most important for the retirement planning industry because it implies a change in leadership for a number of key committees, through which any substantial retirement or tax-reform legislation will likely move during the next two years. “The Senate Committee on Health, Education, Labor and Pensions, or ‘HELP’ for short, is an example where the midterm election results shook things up,” Miller explains.Read more >
In a 10-Q filing with the Securities and Exchange Commission (SEC), State Street said it is responding to subpoenas from the Department of Justice and the SEC for information regarding its solicitation practices with public plans and has retained counsel to conduct a review. The review will include “our use of consultants and lobbyists in our solicitation of business of public retirement plans and, in at least one instance, political contributions by one of our consultants during and after a public bidding process,” the firm said.Read more >
Supreme Court Denies Review of Tussey Fee Case
The U.S. Supreme Court has denied a request to review an appellate court’s decision in a case concerning retirement plan recordkeepers and fees. In Tussey v. ABB, Inc., the 8th U.S. Circuit Court of Appeals agreed with a district court finding that the ABB fiduciaries breached their duties to the plan by failing to diligently investigate Fidelity and monitor plan recordkeeping costs, but it agreed with Fidelity and ABB that the district court relied on hindsight in its ruling that the switch from the Vanguard Wellington fund to Fidelity Freedom funds violated their fiduciary duties under the Employee Retirement Income Security Act (ERISA).Read more >
High Court Hears Arguments About Health Benefits in CBAs
The U.S. Supreme Court heard arguments in M&G Polymers v. Tackett, about collective bargaining agreement (CBA) provisions for retiree health care benefits. The suit questions whether silence in a CBA about a plan’s intentions for vesting of health care benefits, should be interpreted to benefit the employer’s wishes or the employees’? How should a plan sponsor understand how to carry out the plan’s intentions when they are not explicitly spelled out?Read more >
Small Talk
ON THIS DATE: In 1805, Johann George Lehner, a Viennese butcher, invented a recipe and called it the “frankfurter.” In 1956, the U.S. Supreme Court struck down laws calling for racial segregation on public buses. In 1971, the U.S. spacecraft Mariner 9 became the first spacecraft to orbit another planet, Mars. In 1977, the comic strip “Li’l Abner” by Al Capp appeared in newspapers for the last time.  In 1982, the Vietnam Veterans Memorial was dedicated in Washington after a march to its site by thousands of veterans of the conflict. In 2001, U.S. President George W. Bush signed an executive order that would allow for military tribunals to try any foreigners captured with connections to the terrorist attacks on the United States on September 11, 2001. It was the first time since World War II that a president had taken such action. In 2009, NASA announced that water had been discovered on the moon. The discovery came from the planned impact on the moon of the Lunar Crater Observation and Sensing Satellite (LCROSS).
SURVEY SAYS: With Thanksgiving only two weeks away, many of you may be getting into the holiday spirit. This week, I’d like to know about holiday practices at your workplace. What time off are you given? Is there a meal or party? Are gifts exchanged? You may respond to this week’s survey by 6 p.m. Pacific time today.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 >
News from   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
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Editorial: Alison Cooke Mintzer


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