Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 20th, 2014
Benefit Briefs
U.S. Not as Proactive with Pensions as Other Countries
America’s pension system slipped two places and has fallen to 13th in the world in the Melbourne Mercer Global Pension Index (MMGPI). However, Emily Eaton, a senior consultant in Mercer’s International Consulting Group, in New York City, tells PLANSPONSOR the U.S. fell, in part, because five countries were added to the index this year, and two of those ranked above the U.S. “When we talk about the U.S. system, it shouldn’t be a focus on score change. We have new countries that rank above the U.S. as well as those countries that already ranked above us previously,” she says. However, the U.S. ranking does warrant some consideration. The MMGPI report points to five actions that could increase the overall index value for the American system.Read more >
Higher Education Plan Sponsors Step Up Their Game
Higher education institutions are continuing to improve their retirement programs, a survey finds. “Plan sponsors want to adopt best practices,” Michael Volo, senior partner with Cammack Retirement Group in Wellesley, Massachusetts, tells PLANSPONSOR. “They are more focused on fees, simplifying plan administration and engaging participants.” The big trend is the increased awareness of plan costs—driven by fee disclosure regulations and more plan sponsors working with consultants and advisers, Volo says. According to the fourth edition of the Higher Education Retirement Plan Survey from Cammack Retirement, 52% of respondents said they have negotiated fees with their vendors in the last 24 months. The same percentage said they have benchmarked their vendor’s required revenue against peer institutions.Read more >
Buyer's Market
Lincoln Financial Group is providing educational materials for plan sponsors to use in connection with National Save for Retirement Week. During the week, October 19 through October 25, Lincoln will share insights from its MOOD of America study. Starting Monday, Lincoln will highlight a different career stage—first job, changing or in between jobs, mid-career, career advancement, and near retirement—and suggest actions to help savers on their own road to retirement readiness.Read more >
Industry Voices
Industry Voice: Low Beta Portfolios: What Could Go Wrong?
Acadian’s research and management experience has demonstrated that there are, in fact, a number of potential pitfalls en route to the optimal low volatility portfolio. Here are four questions Acadian believes defined benefit plan sponsors should ask when considering a low beta approach.Read more >
Economic Events
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,017,000, according to the U.S. Census Bureau. This is 6.3% above the revised August estimate of 957,000 and is 17.8% above the September 2013 rate of 863,000. Single-family housing starts in September were at a rate of 646,000; this is 1.1% above the revised August figure of 639,000. The September rate for units in buildings with five units or more was 353,000. THE ECONOMIC WEEK AHEAD: Tomorrow, the National Association of Realtors will report about existing home sales for September. Wednesday, we’ll learn the consumer price index for September from the Bureau of Labor Statistics. Thursday, the Labor Department will issue its initial claims report. Friday, the Census Bureau will report about new home sales for September.
Market Mirror
The Dow ended the week on a high note, gaining 263.17 points (1.63%) Friday, to close at 16,380.41. The NASDAQ increased 41.05 points (0.97%) to 4,258.44, and the S&P 500 climbed 24.00 points (1.29%) to 1,886.76. The Russell 2000 fell 3.54 points (0.33%) to 1,082.31, and the Wilshire 5000 closed 217.59 points (1.11%) higher at 19,900.42. On the NYSE, 3.3 billion shares traded, with advancing issues outnumbering declining issues nearly 2 to 1. On the NASDAQ, 2.8 billion shares changed hands, with a slight lead for decliners. The price of the 10-year Treasury note decreased 11/32, bringing its yield up to 2.197%. The price of the 30-year Treasury bond fell 21/32, increasing its yield to 2.971%. WEEK’S WORTH: For the week ending October 17, the Dow lost 0.99%, the NASDAQ decreased 0.42%, and the S&P 500 fell 1.02%. The Russell 2000 climbed 2.75%, and the Wilshire 5000 was down 0.38%.
Rules & Regulators
Court Dismisses Stock Drop Case Against UBS
A federal district court judge has found a participant in the UBS Savings and Investment Plan (SIP) lacks standing to sue regarding the offering of UBS company stock in the plan’s investment lineup. In part due to the lack of standing, the judge also denied the participant’s request to amend her complaint following the U.S. Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer that fiduciaries of employee stock ownership plans (ESOPs) are not entitled to any special presumption of prudence under the Employee Retirement Income Security Act (ERISA).Read more >
The Pension Benefit Guaranty Corporation (PBGC) will pay retirement benefits for more than 4,500 current and future retirees at Reichhold Inc. The company, which manufactures resins used for composites, plans to sell its assets in bankruptcy, and the pension plan will be abandoned as part of the process.Read more >
How a Plaintiff’s Attorney Views the Supreme Court Fee Case
The U.S. Supreme Court announced early this month that it would review parts of an important 401(k) fee litigation case, Tibble v. Edison, sparking intense debate across the retirement planning industry. PLANSPONSOR sat down recently for a Q&A with the plaintiff’s attorney in the case, Jerome Schlichter, of Schlichter, Bogard and Denton, to discuss what’s at stake for plan sponsors, participants and service providers.Read more >
Sponsored message from MetLife
De-Risking Actions for Defined Benefit Pension Plans
There are several actions plan sponsors can take to de-risk their plans. View our short video to see how these actions may help you.Read more >
Small Talk
ON THIS DATE: In 1803, the U.S. Senate approved a treaty with France providing for the purchase of the territory of Louisiana, which doubled the size of the United States. In 1930, “The Adventures of Sherlock Holmes” debuted on NBC radio. In 1947, Hollywood came under scrutiny as the House Un-American Activities Committee opened hearings into alleged Communist influence within the motion picture industry. In 1977, during a flight from Greenville, South Carolina, to Baton Rouge, Louisiana, southern rock band Lynyrd Skynyrd’s tour plane crashed in a heavily wooded area of southeastern Mississippi during a failed emergency landing attempt, killing band-members Ronnie Van Zant, Steve Gaines and Cassie Gaines, as well as the band’s assistant road manager and the plane’s pilot and co-pilot. In 1979, the John F. Kennedy Library in Boston was dedicated.  In 1994, Burt Lancaster, a former circus performer who rose to fame as a Hollywood leading man with some 70 movies to his credit, including “From Here to Eternity” and “Atlantic City,” in a career that spanned more than four decades, died of a heart attack at the age of 80 in Century City, California.
SURVEY SAYS: NewsDash’s 15-Year Anniversary
Last week marked the 15th anniversary of our NewsDash email newsletter. I asked NewsDash readers to choose from a list what formatting or content they would you miss if it were no longer part of NewsDash. To my surprise, the content that would be missed by the most readers is the On This Date section, selected by 59% of respondents. This is followed by Friday Files content (53.6%), the formatting of headlines before articles to which they refer (53.6%), and Survey Says content (51.8%). Suggestions from readers included making the newsletter more iPhone friendly, not using “Read more” as a link to a Friday Files video, and rewording headlines. Most verbatim comments about NewsDash and/or its 15-year anniversary were congratulations and thank you’s, and for that, we are really grateful. Some readers specified how NewsDash helps them: “I often read articles that help me prepare for necessary changes to our plan or get ideas that may improve our plan.” All of the comments and responses are helpful and encouraging as we continue to consider ways we can be the best source of information for our readers. But, for Editor’s Choice, I have to go with the comments made by our former editor-in-chief: “Well, as it’s father (and mother), I find it hard to believe that this little ‘hobby’ of mine is still going 15 years later (about 19 years after I actually started it as an internal email) and 3 years after I no longer have to spend every night of my working life (including weekends) putting it together. It’s a talent making something so hard look so easy (or so I was often told). Congratulations on keeping it going…” Thank you so much to all who responded to the survey!Read more >
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News from   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
Data and Research
Early Withdrawals Found to Exacerbate 401(k) Account Disparities Across Race, Gender
Final Fiduciary Rule Expected Soon
Ask the Experts
Are Roth Excess Deferrals Taxed Twice?

Editorial: Alison Cooke Mintzer


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