Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 19th, 2014
Benefits & Administration
Recession Shifted Retirement Expectations
Americans’ retirement expectations were damaged significantly by the “Great Recession,” as seen in a nearly 23% drop in workers retiring early or close to their expected date. Before the start of the recession, circa September 2008, 72.4% of workers retired either before or within one year of their expected retirement. However, that number has dropped to 49.6% after September 2008, according to research from the Employee Benefit Research Institute (EBRI).Read more >
Saving Public DBs a Matter of Pension Fund Math
Defined benefit (DB) plans are the primary vehicle for ensuring retirement income security for public workers, and Callan Associates believes these plans are viable and necessary in this sector. In a paper published by the Callan Investment Institute, Callan Associates Chairman and CEO Ron Peyton and Senior Vice President and Consultant in the Capital Markets Research group Karen Harris say defined benefit plans are proven to be extremely cost-effective and reliable in delivering basic retirement income security—when the rules of DB finance are followed.Read more >
Products, Deals & People
Ohio Highway Patrol Retirement System is issuing a request for proposals (RFP) for a Tactical Asset Allocation Strategy investment.Read more >
Prudential Touts Benefits of Guaranteed Income in QDIA
The availability of in-plan lifetime income improves participant satisfaction, confidence and outcomes due to better long-term investing behaviors, according to a white paper from Prudential. The research suggests plan design—most notably the makeup of a plan’s qualified default investment alternative (QDIA), along with the adoption of automatic enrollment and deferral escalation—play a pivotal role in unlocking the full potential of lifetime income solutions. The paper’s authors say the time is right to build a smarter QDIA that begins the process of building a lifetime income stream from the first day of participation in the retirement plan.Read more >
Fortune 1000 companies reported an estimated $285 billion in retiree medical obligations for 2013, according to calculations based on Securities and Exchange Commission (SEC) disclosures. Towers Watson’s proprietary Longitude Solution is a turnkey retiree medical exit solution that leverages a customized group annuity, issued by a highly rated insurance company, that transfers the obligation to pay retiree health benefits from the corporate sponsor to the insurer.Read more >
From the Magazine
The Bottom Line: Snail Mail or Email?
Do regulations for delivering plan information need to be updated? Disclosures to retirement plan participants required by the Employee Retirement Income Security Act of 1974 (ERISA) initially hinged on paper and the U.S. Postal Service. However, in the last two decades, technology has transformed communication, allowing for more efficient disbursement of retirement plan disclosures.Read more >
Sponsored message from Vanguard
Portfolio Construction Trends on the Mind of Investors What portfolio construction issues and themes are on the minds of investors recently? In this brief video, Joe Davis, Vanguard’s chief economist and head of Vanguard Investment Strategy Group, and Catherine Gordon, an Investment Strategy Group principal, discuss emerging trends in client conversations, including the outlook on equity markets and fixed-income tactics.   Read more >
Economic Events
The Producer Price Index (PPI) for final demand rose 0.2% in October, according to the Bureau of Labor Statistics. Final demand prices declined 0.1% in September and were unchanged in August. In October, the index for final demand services advanced 0.5%, and prices for final demand goods moved down 0.4%.
Market Mirror
Tuesday, the Dow increased 40.07 points (0.23%) to 17,687.82, the NASDAQ climbed 31.44 points (0.67%) to 4,702.44, and the S&P 500 was up 10.48 points (0.51%) at 2,051.80. The Russell 2000 closed 6.05 points (0.52%) higher at 1,170.28, and the Wilshire 5000 gained 110.68 points (0.52%) to finish at 21,572.59.   On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, 2.8 billion shares traded, with 1.5 advancing issues for every declining issue on both exchanges.   The price of the 10-year Treasury note was up 6/32, decreasing its yield to 2.321%. The price of the 30-year Treasury bond increased 13/32, bringing its yield down to 3.045%.
Ask the Experts
Ask the Experts – Missing Spouses as Beneficiaries
“One of our new employees told us she does not wish to name her spouse as beneficiary of her retirement plan benefit. When we informed her of the spousal consent requirements for the qualified pre-retirement survivor annuity, she explained that she would be happy to obtain the consent of her spouse, but that she has not seen him in more than 10  years and knows nothing of his whereabouts, even though they are technically married. Is there any recourse for her, or is she ‘stuck’ with naming the spouse as beneficiary?”Read more >
Small Talk
Chances are that the driver hitting something or someone in a busy parking lot this holiday season is a man, according to CarInsurance.com’s new survey. CarInsurance.com found men are also more likely than women to keep people waiting for parking spaces and to confront others over parking spaces.Read more >
ON THIS DATE: In 1831, future U.S. President James A. Garfield was born to an impoverished family near Cleveland. In 1863, at the dedication of a military cemetery at Gettysburg, Pennsylvania, during the American Civil War, U.S. President Abraham Lincoln delivered the Gettysburg Address. In 1895, the “paper pencil” was patented by Frederick E. Blaisdell. In 1998, the impeachment inquiry of U.S. President Bill Clinton began. In 2001, U.S. President George W. Bush signed the most comprehensive air security bill in American history. In 2002, the U.S. government completed its takeover of security at 424 airports nationwide. In 2007, the Amazon Kindle was first released.
WEDNESDAY WISDOM: “Tell me and I forget. Teach me and I remember. Involve me and I learn.” —Benjamin Franklin
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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