| | Benefit Briefs | | Loans May Have Ripple Effect on Retirement Savings | | Taking a retirement plan loan can have a big
impact on a participant’s retirement income, especially if the participant does
not pay the loan back or stops contributing to the plan at the same time. “The
number of investors borrowing from their 401(k) has trended upwards in recent
years, with more than 2 million investors now having an outstanding loan,” says
Doug Fisher, senior vice president of thought leadership and policy development
for Fidelity Investments. “Fidelity’s top concern is that within five years of
taking a loan, 40% of borrowers decrease their savings rate, and more than a
third of those stop saving altogether. Reducing your savings rate today could
significantly reduce your account balance upon reaching retirement and
therefore your monthly income in retirement.” Fidelity conducted a hypothetical
analysis showing the impact of this ripple effect of taking a plan loan.Read more > | | Self-Funding Health Benefits Another Cost-Saving Strategy | | Employers are looking at several strategies to
reduce health care benefit costs, but many are sheepish about offering a
self-insured health plan to employees. “Self-insured” means employers pay
health care claims of employees out of their own pockets rather than paying
premiums for “fully insured” plans offered by insurance companies. David Ross,
executive vice president and director of Underwriting Services at Hays
Companies in Minneapolis, Minnesota, tells PLANSPONSOR there are actually few
employers that go completely self-insured; most buy some insurance for very
high-risk, or high-cost, employees. Ross used to be a strategist for a health
insurance provider, so he has the inside scoop about why offering a fully insured
health benefit program may be more costly to employers. “The reason employers
may want to partially self-insure is it costs less on average over time,” Ross
says. He stresses that “on average over time” is important for employers to
understand.Read more > | | | Buyer's Market | | A report from the Kaiser Family Foundation
offers a profile of private exchanges for health care offered to employers. The
foundation notes that surveys indicate 20% to 33% of employers will use a
private exchange for health benefits over the next three to five years. The
foundation identified more than 20 private exchange platforms currently in the
market, and for the report, it profiled 10 of them.Read more > | | Schwab Introduces Low-Fee, Passive TDFs | | Charles Schwab Bank launched the passive Schwab
Indexed Retirement Trust Funds (SIRT Funds), featuring an institutional share class
with a 0.08% expense ratio and a $100 million minimum investment. Schwab says
it expects the low-fee SIRT Funds to “have an interesting impact on the
competitive landscape for target-date funds [TDFs] within 401(k) plans.”Read more > | | | Economic Events | | The U.S. Census Bureau of the Department of
Commerce announced that construction spending during August was estimated at a
seasonally adjusted annual rate of $961.0 billion, 0.8% below the revised July estimate
of $968.8 billion. The August figure is 5.0% above the August 2013 estimate of
$915.3 billion. During the first eight months of this year, construction
spending amounted to $623.1 billion, 6.8% above the $583.2 billion for the same
period in 2013. | | | Market Mirror | | Yesterday, the Dow fell 238.19 points
(1.40%) to 16,804.71, the NASDAQ plummeted 71.30 points (1.59%) to 4,422.09,
and the S&P 500 closed 26.13 points (1.32%) lower at 1,946.16. The Russell
2000 tumbled 16.27 points (1.48%) to 1,085.41, and the Wilshire 5000 lost
283.92 points (1.37%) to finish at 20,476.54.
On the NYSE, 3.3 billion shares traded,
with a 3 to 1 lead for decliners. On the NASDAQ, 2.8 billion shares changed
hands, with 3.6 declining issues for every advancing issue.
The price of the 10-year Treasury note was up 30/32,
bringing its yield down to 2.386%. The price of the 30-year Treasury bond
increased 2 3/32, decreasing its yield to 3.091%.
| | | Rules & Regulators | | Final Rules Issued About Filing Returns on Magnetic Media | | The Internal Revenue Service (IRS) issued final
regulations relating to the requirements for filing certain employee retirement
benefit plan statements, returns, and reports on magnetic media. These
regulations provide that a plan administrator (or, in certain situations, an
employer maintaining a plan) required by the Internal Revenue Code (IRC) or
regulations to file at least 250 returns during the calendar year that includes
the first day of the plan year must use magnetic media to file certain
statements, returns, and reports under IRC sections 6057, 6058, and 6059.Read more > | | | Financial Sense | | Bristol-Myers Squibb Company announced it will
settle $1.4 billion in pension obligations through the purchase of a group
annuity contract from The Prudential Insurance Company of America. The move
affects approximately 8,000 U.S. retirees and their beneficiaries who started
receiving their monthly retirement benefit payments on or before June 1.Read more > | | Millennials Warming to Market Risk | | Millennials are famous for being highly
risk-averse investors, but new research from Hearts & Wallets LLC suggests
the youngest investing cohort is ready for more risk. The new “Hearts &
Wallets Investor Mindset Study” shows Millennial investors are growing more
eager to pursue growth in the ongoing bull market cycle. Having experienced the
first positive market cycle of their adult lifetime, many young investors now
view missing out on investment growth opportunity as a negative, and more than
half of investors in their 20s and early 30s say they worry more about missing
opportunity than the potential to lose money in the markets.Read more > | | | Small Talk | | ON THIS DATE: In
1919, President Woodrow Wilson, who
had just cut short a tour of the country to promote the formation of the League
of Nations, suffered a stroke. In 1950,
“Peanuts,” the comic strip created by Charles M. Schulz, was
published for the first time in seven newspapers. In 1967, Chief Justice Earl Warren swore in Thurgood Marshall, the
first black justice of the U.S. Supreme Court. In 1971, Rod Stewart earned his first No. 1 hit with “Maggie May.”
In 1985, actor Rock Hudson, 59, became
the first major U.S. celebrity to die of complications from AIDS. | | SURVEY SAYS: Retirement
plan designs to encourage people to save for retirement are getting a lot of
attention, but is there an age at which it is just too late? This week, I’d
like to know, do you think there is an age at which it is too late for
individuals to start saving for retirement? Do you have any tips for strategies
late savers can use to try to “catch up” on retirement savings? 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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