Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 13th, 2014
Benefit Briefs
Sponsors See Need for Holistic Health and Retirement Benefits
As increasing health care costs compete with retirement savings, employers see a demand for a holistic health and retirement benefits plan in the near-term. “As we focus on improving retirement outcomes, changing health costs and the regulatory environment are causing health and retirement to be more and more linked,” Shelby George, benefits solutions practice leader at Manning & Napier, in Rochester, New York, tells PLANSPONSOR. George explains that a holistic health and retirement benefits plan for plan sponsors looks different depending on employers’ goals for their plans. “We’re talking about a consultative approach driven by employers’ objectives for their benefit plans, not a one-size-fits-all turnkey approach,” she says. “The onus is on those of us in the industry to create awareness and tools for approaching benefits in a holistic way.”Read more >
Similar to private sector employers, government employers are dealing with new health care reform rules and mitigating the costs of providing health care benefits to employees. A survey from the nonprofit research firm Cobalt Community Research of 1,536 municipalities, school districts, state governments, and other public sector employers from across the United States rates their collective knowledge of the Patient Protection and Affordable Care Act (ACA) at 4.5 out of 10. However, employers offering coverage to active employees have frequently responded to the ACA with compliance reviews to see how the ACA applies to their plans (64%); by testing plans to see if they meet minimum value and affordability standards (66%); and by calculating ACA costs (54%). Nearly half are developing new strategies for part-time and seasonal employees because of the 30-hour per week requirement.Read more >
A Proper Study Can Help Improve Retirement Plan Outcomes
What is the next phase of plan-design changes that a plan sponsor should think about implementing? Conducting a plan-design optimization study can help you answer that question.Read more >
Industry Voices
Industry Voice: Unbundling the Target-Date Fund
There have been many articles that have detailed the vast differences between the various off-the-shelf target-date strategies for the defined contribution mid-market. These are usually offered in the form of mutual funds or collective trust funds and are available almost universally across most open architecture platform providers. Large market plans have generally moved towards the custom target-date strategies which usually combine some sort of a model portfolio with a custom “glide path” bolted on to reflect the demographics of the participant base. This custom model “unbundles” the packaged target strategies and thus the pseudonym “custom.” In the mid-market space, we are left to choose from the fifty plus (and counting) mutual fund flavors what the most appropriate one is for our plan demographics. Let’s unbundle these strategies to identify the perfect target-date fund for your plan.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Wednesday, the Census Bureau will report about retail sales for September and business inventories for August, and the Bureau of Labor Statistics will reveal the producer price index for September. Thursday, the Labor Department will issue its initial claims report. Friday, the Census Bureau will report about housing starts for September.
Market Mirror
Friday, the Dow was down 115.15 points (0.69%) at 16,544.10, the NASDAQ plummeted 102.10 points (2.33%) to 4,276.24, and the S&P 500 fell 22.08 points (1.15%) to 1,906.13. The Russell 2000 tumbled 14.67 points (1.37%) to 1,053.32, and the Wilshire 5000 closed 259.25 points (1.28%) lower at 19,975.65. On the NYSE, 3.2 billion shares changed hands, with 3.6 declining issues for every advancing issue. On the NASDAQ, 2.7 billion shares traded, with a 2.7 to 1 ratio of decliners to advancers. The price of the 10-year Treasury note was up 9/32, with its yield down to 2.283%. The price of the 30-year Treasury bond increased 21/32, decreasing its yield to 3.016%. WEEK’S WORTH: For the week ending October 10, the Dow decreased 2.74%, the NASDAQ tumbled 4.45%, and the S&P 500 closed 3.14% lower. The Russell 2000 plummeted 4.65%, and the Wilshire 5000 lost 3.57%.
Rules & Regulators
Company Used Insurance as Excuse to Fire Older Workers
Spartanburg, South Carolina-based Atchison Transportation Services has settled an age discrimination charge by the Equal Employment Opportunity Commission (EEOC). According to the agency, the company’s operations manager told William Thomas, who was a motor coach driver for Atchison, that he had thought Thomas was “only 70,” but because Thomas was actually 75, the company had to let him go. The complaint alleged that the operations manager further stated that the company’s insurance policy had a clause that did not allow drivers to drive after they reached the age of 75.Read more >
Financial Sense
Prepare for a New Financial Era, Gross Says
“There is a new financial era. Accept it and modify your behavior accordingly, so that your future is safe, secure, and you look forward to a brighter tomorrow,” says Bill Gross. In his first investment outlook letter as portfolio manager of the Janus Global Unconstrained Bond Fund and related strategies at Janus Capital Group, Gross briefly addressed his departure from PIMCO, the company he co-founded. “Had there been a reasonable way to continue there, I would have stayed to my last breath.”Read more >
The World at Large
UK Pensions minister Steve Webb wants to make “auto escalation” of employee retirement plan contributions the central plank of the next five years’ pensions policy, if he remains in government.Read more >
Small Talk
ON THIS DATE: In 1775, the Continental Congress authorized construction and administration of the first American naval force—the precursor of the United States Navy. In 1792, the cornerstone was laid for a presidential residence in the newly designated capital city of Washington. In 1845, a majority of the citizens of the independent Republic of Texas approved a proposed constitution, that when accepted by the Congress, would make Texas the 28th American state. In 1998, the National Basketball Association (NBA) canceled regular season games, due to work stoppage, for first time in its 51-year history. In 2010, near Copiapó, Chile, 33 miners were trapped underground in San José Mine. The miners were rescued after 69 days underground.
SURVEY SAYS: Workplace Chats Not Related to Work
Last week, I asked NewsDash readers, “Which “water-cooler” topics, not related to work, are dominating conversations in your workplace right now?” Of the things going on in the world, Ebola (49%) was the top topic responding readers said they and their coworkers are talking about. This was followed by professional or college football (41.2%), and major league baseball (27.5%) rounded out the top three. The Middle East conflicts (15.7%), the upcoming elections (11.8%), the movie/book “Gone Girl” (11.8%), TV shows (13.7%) children’s sports activities (13.7%), office gossip/politics (11.8%), and Halloween plans/costumes (11.8%) are all also hot topics of conversation right now. One “other” response was “increase costs of benefits which results in a decrease of disposable income.” Zombies and grandchildren were topics also mentioned in responding readers’ verbatim comments about workplace conversations not related to work. A couple of respondents mentioned how such chatter is necessary to break up a work day—“thank goodness we have SOMETHING else to talk about…”—while one reader seemed perturbed with the work interruption. Editor’s Choice goes to the reader who said: “Are you kidding. Here, when HR approaches the water-cooler they still scatter or hush. I can, however, guarantee one thing – it’s definitely not about planning for retirement.” A big thank you to everyone who participated in our survey!Read more >
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News from PLANSPONSOR.com   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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