| | Buyer's Market | | A new partnership between Western Union Business
Solutions and CPAS helps make seamless pension fund payments for U.S. retirees
living abroad. To meet the needs of retirees who move overseas, Western Union
Business Solutions and CPAS have created a platform for efficient,
international delivery of pension payments. CPAS clients can use the payment
network of Western Union Business Solutions, which plans to offer an integrated
solution through CPAS software.Read more > | | | Industry Voices | | Industry Voice: Smarter About Smart Beta | | Smart beta is fast becoming a popular approach
for providing retirement plan investors with a different, yet systematic,
equity exposure than that offered by traditional capitalization-weighted
indices. But is smart beta really a new idea? The short answer is
“no”—systematic alternatives to cap-weighted schemes have, in fact, been around
for more than 30 years. Since that time, cap-weighted portfolios have attracted
trillions of dollars from investors around the world, becoming the proxy for
the market return, and “beta,” the accepted industry shorthand for exposure to
the market. So why are investors now (finally) accepting the notion that
alternative weighting schemes should be taken seriously?Read more > | | | Economic Events | | Sales of new
single-family houses in September were at a seasonally adjusted annual rate of
467,000, according to estimates released jointly by the U.S. Census Bureau and
the Department of Housing and Urban Development. This is 0.2% above the revised
August rate of 466,000 and 17.0% above the September 2013 estimate of 399,000.
THE
ECONOMIC WEEK AHEAD: Tomorrow,
the Census Bureau will report about durable goods orders for September and the
Conference Board will release its Consumer Confidence Index for October. Thursday, the Labor Department will
issue its initial claims report.
| | | Market Mirror | | Friday, the Dow climbed 127.51 points
(0.76%) to 16,805.41, the NASDAQ increased 30.92 points (0.69%) to 4,483.72,
and the S&P 500 closed 13.75 points (0.70%) higher at 1,964.57. The Russell
2000 was up 2.34 points (0.21%) at 1,118.82, and the Wilshire 5000 gained
126.14 points (0.61%) to finish at 20,690.13.
On the NYSE, 3.2 billion shares changed
hands, with 1.7 advancing issues for every declining issue. On the NASDAQ, 2.7
billion shares traded, with a 1.2 to 1 ratio of advancers to decliners.
The price of the 10-year Treasury note
was up 2/32, with its yield down to 2.266%. The price of the 30-year Treasury
bond increased 7/32, decreasing its yield to 3.035%.
WEEK’S
WORTH: For the week ending October 24, the Dow rose
2.59%, the NASDAQ climbed 5.29%, and the S&P 500 gained 4.12%. The Russell
2000 increased 3.37%, and the Wilshire 5000 finished 3.97% higher.
| | | Rules & Regulators | | Guidance Issued for Including Annuities in TDFs | | The Department of the Treasury and the Internal
Revenue Service have issued guidance designed to expand the use of income
annuities in 401(k) plans. The guidance was published as Notice 2014-66 and
provides that plan sponsors can include deferred income annuities in
target-date funds (TDFs) used as a qualified default investment alternatives
(QDIA) in a manner that complies with plan qualification rules. The guidance
makes clear that plans have the option to offer TDFs that include such annuity
contracts either as a default or as a participant-elected investment.Read more > | | Senators Urge Government Action on Pension De-Risking | | Two senior U.S. senators are petitioning the
government agencies that oversee qualified retirement plans to more actively
protect pension plan participants’ rights during pension risk transfers. In
short Senators Ron Wyden (D-Oregon), chairman of the Senate Finance Committee,
and Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor, and
Pensions Committee, are pushing the federal government to establish “clear and
specific rules” to ensure current employees and retirees participating in
defined benefit pension plans have their interests protected during pension
risk transfer moves. The senators say they are concerned that, while some types
of de-risking strategies may be warranted to mitigate future pension funding
risks, pension plans are increasingly engaging in new forms of de-risking
activity, such as lump-sum payouts and the full or partial transfer of liabilities
onto outside insurance companies.Read more > | | Court Revives ADEA Case Related to Health Benefits Costs | | A federal appellate court has revived a lawsuit
in which a woman claims she was fired from her job due to her age and how that
affected the company’s health care costs. The 8th U.S. Circuit Court of Appeals
reversed a district court’s decision in Marjorie Tramp’s Age Discrimination in
Employment Act (ADEA) claim. The district court granted summary judgment in
favor of Tramp’s former employer, Associated Underwriters, saying Tramp’s
evidence demonstrated that age and health care costs were analytically distinct
in the case. However, the appellate court found that correspondence between
Associated Underwriters and its insurance carrier before Tramp’s termination
showed it was apparent to company management that its health care premiums were
affected by the demographics of its employees.Read more > | | | Financial Sense | | U.S. Pensions Less Enchanted with Alternatives | | Confidence has returned among institutional
investors worldwide, according to a survey by Pyramis Global Advisors. The 2014 Pyramis
Global Institutional Investor Survey found nine in ten (91%) pension plans and
other institutional investors believe they can achieve target returns in five
years. Derek Young, vice chairman of Pyramis Global Advisors, in Boston, says
in the U.S., 84% believe they can meet return assumptions. However, Young tells
PLANSPONSOR an interesting finding of the survey is it shows a return to basics
in U.S. plans. “There’s a lot of discussion around asset allocation and whether
practices had become too complex or had outgrown plan sponsor knowledge,” he
says. “U.S. pension plan sponsors seemed more uncomfortable with their
portfolios.” The return to basics especially showed up in U.S. plans’ views of
alternative investments, and specifically about hedge funds.Read more > | | | Small Talk | | ON THIS DATE: In
1858, Theodore Roosevelt, the future
26th president of the United States, was born in New York City, and Roland Macy
opened Macy’s Department Store in New York City. It was Macy’s eighth business venture,
the other seven failed. In 1904, New
York City Mayor George McClellan took the controls on the inaugural run of the
city’s innovative new rapid transit system: the subway. In 1925, Fred Waller received a patent for water skis. In 1927, the first newsreel featuring
sound was released in New York. In 1938,
Du Pont announced “nylon” as the new name for its new synthetic yarn.
In 1978, Egyptian President Anwar
Sadat and Israeli Prime Minister Menachem Begin were named winners of the Nobel
Peace Prize for their progress toward achieving a Middle East accord. In 2002, the Anaheim Angels won their first
World Series, beating the San Francisco Giants in Game 7, and Emmitt Smith
(Dallas Cowboys) became the all-time leading rusher in the NFL when he extended
his career yardage to 16,743. He also scored his 150th career touchdown. In 2004, the Boston Red Sox won the World
Series for the first time since 1918. | | SURVEY SAYS: Minimum Wage Increase | | Last week, I asked NewsDash readers, “Do you
think the state in which you work should increase its minimum wage?” and “What
do you think is a fair minimum wage?” Sixty-three percent of responding readers
think the minimum wage in the state in which they work should be increased, and
36.8% do not. Nearly 31% of readers said a fair minimum wage for workers in
their work-state is $10.00 per hour. Slightly more than 18% said a minimum wage
in the range of $11.00 to $14.00 is fair. More than 16% said the current
federal minimum of $7.25 per hour is fair for workers in their work-state,
while the same percentage (16.4%) said there should be no set minimum wage. The
majority (91.7%) of those who support a minimum wage increase, said they do
because it will increase the standard of living for employees. The most common
reason selected by respondents who do not support a minimum wage increase was
that companies may increase prices of goods and services to offset labor costs,
cited by 88.9% of those respondents. In verbatim comments, some said a free
market should set the price for labor, and a few pointed out that employers
that support a higher minimum wage could just choose to pay workers more than
minimum wage on their own. Others noted there are both pluses and minuses to
increasing the minimum wage, and doing so may even end up hurting the people it
was trying to help. Editor’s Choice
goes to the reader who said: “Wages should be fair for the work that the
employee is required to do.” Thank you to everyone who participated in the
survey!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
Copyright © Asset International, Inc.,
2014.
All
rights reserved. No reproduction without
prior authorization.
|
|
| |
