Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 21st, 2014
Benefits & Administration
Efforts Needed to Address Women’s Retirement Readiness
Women’s path to a financially secure retirement is filled with many obstacles, a global survey shows. In a webcast about a new report from Aegon UK and the Transamerica Center for Retirement Studies, Catherine Collinson, president of the Transamerica Center for Retirement Studies, said a survey of more than 16,000 people in 15 countries revealed that women’s positive retirement aspirations are undermined by lifestyle differences. Women are more likely to take time out of workforce or work part-time to take care of family, and they tend to have lower salaries. “These things affect lifetime savings and long-term retirement readiness, especially since women tend to live longer than men,” Collinson said. The study shows women are more than twice as likely as men to be working in part-time jobs–jobs that often provide few, if any, retirement plan benefits. In addition, women, on average, earn about 27% less than men.Read more >
From the Magazine
Barry’s Pickings: Another Funding Regime?
More funding or more premiums to insure defined benefit (DB) plans, take your pick. For single-employer defined benefit (DB) plans, the federal funding regime has two basic moving parts: 1) minimum funding rules that mandate, on the front end, how much money must be contributed to fund benefits, and 2) premium-financed “insurance” that, in effect, provides a back-end guarantee of those benefits. Those two parts are clearly and obviously linked.Read more >
Economic Events
In the week ending November 15, the advance figure for seasonally adjusted initial claims for unemployment insurance was 291,000, a decrease of 2,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 287,500, an increase of 1,750 from the previous week’s revised average. The average interest rate for a 30-year fixed-rate mortgage is 3.99%, down from 4.01% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.17%, down from 3.20%. On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in October after rising 0.1% in September, the Bureau of Labor Statistics announced. The index for all items less food and energy increased 0.2% in October after rising 0.1% in September. Real average hourly earnings rose 0.1% in October, seasonally adjusted. Average hourly earnings increased 0.1% and the CPI-U was unchanged. Real average weekly earnings increased 0.4% over the month. According to the National Association of Realtors, total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.5% to a seasonally adjusted annual rate of 5.26 million in October from an upwardly-revised 5.18 million in September. Sales are at their highest annual pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5% from last October) for the first time since last October.
Market Mirror
Thursday, the Dow was up 33.27 points (0.19%) at 17,719.00, the NASDAQ gained 26.16 points (0.56%) to finish at 4,701.87, and the S&P 500 ticked up 4.03 points (0.20%) to 2,052.75. The Russell 2000 climbed 13.07 points (1.13%) to 1,170.75, and the Wilshire 5000 increased 66.45 points (0.31%) to 21,592.83. On the NYSE, 3.2 billion shares traded, with advancing issues outnumbering declining issues nearly 2 to 1. On the NASDAQ, 2.8 billion shares changed hands, with a more than 2 to 1 lead for advancers. The price of the 10-year Treasury note was up 6/32, with its yield down to 2.340%. The price of the 30-year Treasury bond increased 15/32, decreasing its yield to 3.057%.
Compliance
Some Premium Reimbursement Arrangements Violate ACA
The Department of Labor has issued frequently asked questions (FAQs) about the compliance of health care premium reimbursement arrangements with the Patient Protection and Affordable Care Act (ACA). The new guidance clarifies that if an employer uses an arrangement that provides cash reimbursement for the purchase of an individual market policy, the payment arrangement is part of a plan maintained for the purpose of providing medical care to employees, without regard to whether the employer treats the money as pre-tax or post-tax to the employee. Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and can trigger penalties.Read more >
QJSA Project Shows Most in Compliance
The Internal Revenue Service (IRS) has announced results of a compliance project that checked whether retirement plan sponsors followed qualified joint & survivor annuity (QJSA) rules. The agency said most plan sponsors complied with the QJSA notice and consent requirements for plan distributions; however, it did find some sponsors that didn’t secure spousal consent when the participant waived the QJSA, or didn’t ensure that a plan representative or notary public witnessed the consent.Read more >
Investing
Use of Managed Volatility Funds Growing
As asset managers and investors realize the usefulness of managed volatility strategies, assets continue to rise according to a report from Strategic Insight (SI). Tamiko Toland, managing director of Retirement Income Solutions at Strategic Insight, an Asset International company, told PLANSPONSOR that SI believes managed volatility funds have the potential to grow significantly in the retirement space. “They represent a new risk management tool that does not constitute insurance yet may help to buoy against rocky markets.”Read more >
PLANSPONSOR UK
European economic output will be boosted by keeping those older than age 50 in the workforce, a report suggests.Read more >
Small Talk
The New York Times offers an interactive feature, “The United States of Thanksgiving,” which includes holiday recipes that evoke each of the 50 states, as well as comments from readers about what makes Thanksgiving in their states.Read more >
ON THIS DATE: In 1789, North Carolina became the 12th state to ratify the U.S. Constitution. In 1871, M.F. Galethe patented the cigar lighter. In 1877, Thomas A. Edison announced the invention of his phonograph. In 1916, the Britannic, sister ship to the Titanic, sank in the Aegean Sea, killing 30 people. More than 1,000 others were rescued. In 1934, a teenaged Ella Fitzgerald won Amateur Night at Harlem’s Apollo Theater. In 1995, the Dow Jones Industrial Average closed above the 5,000-mark (5,023.55) for the first time.   And now it’s time for FRIDAY FILES!
Interesting eye facts and tests.Read more >
In Pocono Summit, Pennsylvania, a man was about to take a bite of fried chicken when he noticed an image. “I’m about to fork into my chicken and, lo and behold, there’s a picture of what looks like Jesus to me,” he told the local FOX news station. You can decide for yourself after looking at this photo of the piece of chicken.Read more >
In Newark, New Jersey, a man has been arrested for drunken driving after levelling signs, three benches, two steel bollards, a tree, a drinking fountain, fencing and construction materials, damaging a bridge parapet, and tearing up grass… with a bulldozer in West Hudson Park. The bulldozer eventually made it out of the park and struck a parked car, according to the Jersey Journal. After police caught up with him, he was also charged with theft of the bulldozer. Police said the man smelled of alcohol and admitted having taken the bulldozer, saying he was cold and wanted to drive it home.
This woman’s impressions of celebrities stuck in traffic are right on the mark.Read more >
In Hazard, Kentucky, police received a call about 1 a.m. Sunday that someone had passed out in the drive-through of a Taco Bell restaurant. An officer went to the restaurant, found the person and became concerned when the man couldn’t be awakened. The officer summoned an ambulance, the Lexington Herald Leader reports. Turns out the man is the police chief of in Whitesburg. The police chief said “It’s very unfortunate, but I’ve learned from it.  Just never do it again, pick up the pieces and move on.” He was scheduled to meet with the mayor of Whitesburg this week. In Plattsburgh, New York, a man was arrested for items found inside a stuffed animal he was carrying. News report do not say what tipped off police to the drugs found in the stuffed animal, but they found marij.uana, coc.aine and two LSD strips. The stuffed animal was Daren the Lion, wearing a T-shirt promoting the Drug Abuse Resistance Education, or D.A.R.E., program. Have a wonderful weekend, everyone!
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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