Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 2nd, 2015
Benefits & Administration
Retirement Readiness in the Age of High Tuition
Adults who think it’s their duty to put the kids through college may want to think a little further—that is, if they are also saving for retirement. A recent LIMRA Secure Retirement Institute study explored the incidence of parents and grandparents helping, or being willing to help, finance a four-year college education and their attitudes behind that. More than collecting numbers, the researchers wanted to give a warning, if needed, to self-sacrificing family members who might later find they’ve given up more than they bargained for.Read more >
Health care costs are affecting household budgets, but individuals do not know how to shop for health care. Progressive employers have figured out a way to help them.Read more >
Data and Research
Student Loan Repayments Expected to Derail Employees’ Retirement Savings
Social Security Administration Cannot Calculate 2024 COLA if Government Shuts Down
Senate Committee Passes Bill Permitting Marijuana Industry Employers to Sponsor Retirement Plans
Employers Taking Actions to Avoid ACA Excise Tax
Nearly nine in 10 employers have calculated whether their health plan will trigger the Patient Protection and Affordable Care Act (ACA) Cadillac tax, a 40% excise tax on employers that offer high-cost health plans to their employees, according to a new survey from the International Foundation of Employee Benefit Plans (IFEBP). Sixty percent say that without any future changes, their plan will face the tax. The vast majority of plan sponsors that would be subject to the Cadillac tax are implementing changes to avoid it.Read more >
Products, Deals & People
Investment Product Launches for the Week
NEPC improves glide path customization abilities, and MassMutual teams with Envestnet on managed accounts.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 $1,086.2 billion, 0.7% above the revised July estimate of $1,079.1 billion. The August figure is 13.7% above the August 2014 estimate of $955.0 billion.

In the week ending September 26, the advance figure for seasonally adjusted initial claims for unemployment insurance was 277,000, an increase of 10,000 from the previous week’s unrevised level of 267,000. The four-week moving average was 270,750, a decrease of 1,000 from the previous week’s unrevised average of 271,750.

The average interest rate for a 30-year fixed-rate mortgage is 3.85%, down slightly from 3.86% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.07%, down from 3.08%.

Market Mirror

Yesterday, the Dow was down 12.69 points (0.08%) at 16,272.01, the NASDAQ was up 6.92 points (0.15%) at 4,627.08, and the S&P 500 closed 3.79 points (0.20%) higher at 1,923.82. The Russell 2000 closed 3.14 points (0.29%) lower at 1,097.54, and the Wilshire 5000 increased 38.08 points (0.19%) to 20,157.36.

On the NYSE, 3.2 billion shares traded, with a slight lead for decliners. On the NASDAQ, 2.7 billion shares changed hands, with 1.4 declining issues for every advancing issue.

The price of the 10-year Treasury note was up 1/32, decreasing its yield to 2.039%. The price of the 30-year Treasury bond increased 6/32, bringing its yield down to 2.849%.

Nearly $1 Million Left in Abandoned 401(k)
The Department of Labor (DOL) has filed a lawsuit to distribute nearly $1 million in assets from the 401(k) plan of a defunct corporation in Wayne, Pennsylvania. Based on an investigation conducted by the DOL’s Employee Benefits Security Administration (EBSA), the lawsuit alleges that Encorium Group Inc.’s predecessor, the Covalent Group, established a 401(k) Profit Sharing Plan in 1996 to provide a way for its employees to voluntarily save for their retirement years on a tax-free basis. In or around September 2009, the company initiated procedures to terminate the plan, but ceased all business operations before taking additional steps to effectuate the termination.Read more >
A vote by the Financial Services Committee of the U.S. House of Representatives grabbed financial media headlines Thursday, unfolding largely on partisan lines and raising the possibility President Obama could eventually be forced to veto legislation aimed at halting the Department of Labor’s (DOL) fiduciary rulemaking. Sympathetic lawmakers handed enough support for H.R. 1090, known as the Retail Investor Protection Act, to push the bill out of committee. As approved, the bill would essentially halt the Department of Labor’s fiduciary rulemaking efforts to strengthen conflict of interest protections for retirement savers under the Employee Retirement Income Security Act (ERISA) until such time as the Securities and Exchange Commission (SEC) progressed in its own fiduciary reform applying generally to brokers and producing advisers.Read more >
ERIC Asks IRS Not to Eliminate Determination Letters
In a comment letter to the Internal Revenue Service (IRS) about its proposal to eliminate its determination letter program for individually designed plans, the ERISA Industry Committee (ERIC) asked the IRS to reconsider. ERIC argues that most large employers do not use predetermined or “off-the-shelf” retirement plans, instead choosing to individually design plans that best benefit their workforces. “The IRS’s proposal to eliminate determination letters for these types of plans would disproportionately and unfairly affect large employers and their retirement plans. The inability to prove that a retirement plan is in compliance with current tax laws and plan provisions would create chaos,” ERIC said.Read more >
Small Talk
ON THIS DATE: In 1919, U.S. President Woodrow Wilson suffered a stroke that left him partially paralyzed. In 1947, the Federatino Internationale de l’Automobile (FIA) formally established Formula One racing in Grand Prix competition. In 1950, “Peanuts,” the comic strip created by Charles M. Schulz, was published for the first time in seven newspapers. In 1959, “The Twilight Zone” debuted on CBS-TV. The show ran for 5 years for a total of 154 episodes. In 1967, Thurgood Marshall, the first African-American member of the U.S. Supreme Court, was sworn in. In 2001, NATO, for the first time, invoked a treaty clause that stated that an attack on one member is an attack on all members. The act was in response to the September 11, 2001, terrorist attacks in the United States.
FRIDAY FILES REWIND: Enjoy these Friday File videos from December 2, 2011.Read more >
Have a great weekend, everyone!
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 >

Editorial: Alison Cooke Mintzer


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