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| Benefits & Administration |
| Retirement Plan Provisions That May Confuse |
| Some retirement plan provisions can create
headaches for plan sponsors. The Internal Revenue Service (IRS) permits plans
to be flexible to satisfy broad employer and employee needs, but this
flexibility can come with a cost, according to speakers at the 2014 American
Society of Pension Professionals & Actuaries (ASPPA) Annual Conference. For
example, plan sponsors have some flexibility in determining age and service
requirements for employees to enter the plan.
But, plan sponsors must be careful that the requirements they select
match their intent.Read more > |
| The aggregate funded ratio of U.S. corporate
pension plans was relatively unchanged in October. According to Wilshire
Consulting, the aggregate funded ratio for U.S. corporate pension plans fell
slightly to 85% for the month of October. The decrease in funding was the
result of a greater increase in liability value versus a smaller increase in
asset value.Read more > |
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| Products, Deals & People |
| J.P. Morgan Introduces New Share Class for TDFs |
| J.P. Morgan Asset Management said it will offer
R6 share classes of the J.P. Morgan SmartRetirement Mutual Fund series of
target-date funds (TDFs). Managed by J.P. Morgan’s Investment Management
Solutions-Global Multi Asset Group (GMAG), the new share class provides a
non-revenue-sharing option for retirement plans of all sizes and needs.Read more > |
| Nationwide’s 3(38) investment fiduciary service
will now include fiduciary monitoring of Nationwide ProAccount, Nationwide’s
managed account service, at the plan level for no additional cost. When a plan
sponsor elects the 3(38) service, IRON Financial assumes the responsibility and
legal liabilities associated with selecting, monitoring and replacing plan
investments under Section 3(38) of the Employee Retirement Income Security Act
of 1974 (ERISA).Read more > |
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| From the Magazine |
| 2014 Retirement Plan Adviser of the Year Winners |
| The 2014 PLANSPONSOR Retirement Plan Adviser of
the Year winners—in the individual, team and multioffice team categories—stand
out for their overriding concerns for plan sponsor clients and participants, as
well as the leading-edge actions they take with respect to plan design and
outcomes.Read more > |
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| Market Mirror |
| Wednesday,
the Dow climbed 100.69 points (0.58%) to 17,484.53, the NASDAQ slipped 2.91
points (0.06%) to 4,620.72, and the S&P 500 gained 11.41 points (0.57%) to
finish at 2,023.51. The Russell 2000 increased by 1.66 (0.14%) to 1,167.08, and
the Wilshire 5000 closed 93.37 points (0.44%) higher at 21,269.72.
On the NYSE,
3.2 billion shares traded, with 1.4 advancing issues for every declining issue.
On the NASDAQ, 2.7 billion shares changed hands, with a slight lead for
advancers.
The price of the 10-year Treasury note slipped 1/32,
bringing its yield up to 2.339%. The price of the 30-year Treasury bond was
down 5/32, increasing its yield to 3.059%.
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| Compliance |
| Court Revisits Ruling in Light of Dudenhoeffer |
| The 9th U.S. Circuit Court of Appeals has
revisited its ruling in a retirement plan stock drop suit in light of the U.S.
Supreme Court’s decision in Fifth Third
Bancorp v. Dudenhoeffer. In Harris v.
Amgen, the 9th Circuit again reversed a district court dismissal and
remanded the case back to the court, but based its discussion on the U.S.
Supreme Court’s finding in Dudenhoeffer
that there is no presumption of prudence for employee stock ownership plan
fiduciaries. The appellate court said this overrode its previous decision that
no presumption of prudence applies if the plan does not require employer stock
investments.Read more > |
| After a lengthy court battle, the Pension
Benefit Guaranty Corporation (PBGC) received a pension settlement from a
Japanese parent company. The PBGC and Asahi Tec Corp., a Japanese metal casting
and forging company, negotiated a settlement over the pension liabilities of
the Metaldyne Corp., a former Asahi Tec subsidiary that went into bankruptcy in
2009. In the settlement, Asahi Tec agreed to pay PBGC $39.5 million.Read more > |
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| Investing |
| The Case for Real Estate in DC Plans |
| According to the Defined Contribution Real
Estate Council (DCREC), which advocates for the use of direct commercial real estate
and real estate security investments within defined contribution (DC) plans, an
allocation of 10% of participant assets to a mix of listed and unlisted real
estate leads to better long-term outcomes. In short, the DCREC suggests real
estate can be used to address sequence of return risks that can damage DC
retirement savers’ lifetime income prospects when market downturns occur close
to the retirement date.Read more > |
| The California Public Employees’ Retirement
System (CalPERS) has received $249.3 million in damages from Bank of America. CalPERS
said in total it has recovered more than $500 million on losses the fund
sustained from investments in mortgage-backed securities.Read more > |
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| PLANSPONSOR UK |
| Freezing pay and recruitment, as well as passing
on costs to customers, are among the solutions being considered by UK employers
to pay for auto enrollment contribution increases.Read more > |
|
| Small Talk |
| ON THIS DATE: In
1789, Pope Pius VI appointed John
Carroll bishop of Baltimore, making him the first Catholic bishop in the United
States. In 1860, Abraham Lincoln was
elected the 16th president of the United States over a deeply divided
Democratic Party, becoming the first Republican to win the presidency. In 1861, Jefferson Davis was elected
president of the Confederate States of America. In 1894, William C. Hooker received a patent for the mousetrap. In 1923, Jacob Schick was granted a patent
for the electric shaver. In 1967,
Phil Donahue began a TV talk show in Dayton, Ohio. The show was on the air for
29 years. |
| SURVEY SAYS: Some
defined benefit plan sponsors use real estate investments to hedge volatility
in their portfolios, and a study from the Defined Contribution Real Estate
Council suggests real estate investments could do the same for defined
contribution plan participants. This week, I’d like to know does your plan
include real estate investments? Are you considering them? If not, why not? 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 PLANSPONSOR.com
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2014.
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