Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 29th, 2015
Benefits & Administration
Mortality Bonus and PBGC Premiums Strain DBs
New research from national pension consulting firm NEPC suggests increased lifespan projections from the Society of Actuaries (SOA) and other economic pressures, such as the recent hike in Pension Benefit Guaranty Corporation (PBGC) premiums, are seriously intensifying cost pressures on defined benefit (DB) plan sponsors. From vigorous activity in the pension de-risking and buyout space to expanding interest in pension hibernation and other “bridge strategies,” Brad Smith, a partner in NEPC’s corporate services practice, tells PLANSPONSOR there is no shortage of evidence that pension plan sponsors are feeling pinched. Add in recent news reports that the ongoing budget deal being hammered out in Washington could lead to further PBGC premium hikes, and it all makes a pretty grim picture for pension plan sponsors.Read more >
MOST READ ARTICLES
1
2021 Plan Sponsor of the Year
2
How to Effectively Measure Retirement Plan Success
3
2020 Recordkeeping Survey
4
A Checklist for Retirement Plan Committees
5
Settlement Reached in Insperity 401(k) Excessive Fee, Self-Dealing Suit
Service Members Prefer Traditional Pension
The latest results of the First Command Financial Behaviors Index reveal that 70% of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) who say they are likely to serve to full retirement want to be grandfathered into the current retirement system. Earlier this year, the Military Compensation and Retirement Modernization Commission announced its proposal to restructure the traditional 20-year retirement system as a blended program that includes a reduced pension in exchange for a lump sum bonus and a new 401(k)-type plan.Read more >
Products, Deals and People
Workforce communications provider GuideSpark launched its Financial Wellness Product. The solution enables companies to provide tailored financial wellness education to their employees through a comprehensive financial assessment, personalized action plans, engaging informational videos, and direct integration to actionable, employer-provided programs and tools.Read more >
Market Mirror

A late afternoon rally yesterday left the stock market solidly higher after the Federal Reserve released a policy statement saying it would consider raising rates at its December meeting, the Associated Press reported. The Dow was up 198.09 points (1.13%) at 17,779.52, the NASDAQ closed 65.55 points (1.30%) higher at 5,095.69, and the S&P 500 increased 24.46 points (1.18%) to 2,090.35. The Russell 2000 climbed 33.42 points (2.92%) to 1,178.71, and the Wilshire 5000 gained 296.58 points (1.38%) to finish at 21,771.95.

On the NYSE, 3.2 billion shares changed hands, and on the NASDAQ, more than 2.7 billion shares traded, with advancing issues outnumbering declining issues nearly 4 to 1 on both exchanges.

The price of the 10-year Treasury note fell 16/32, increasing its yield to 2.097%. The price of the 30-year Treasury bond decreased 10/32, bringing its yield up to 2.877%.

Compliance
Maximum Benefits/Contributions Limits Table
PLANSPONSOR has updated its benefits/contributions limits table for 2016 amounts recently announced by the Internal Revenue Service (IRS). The table may be downloaded as a PDF and printed.Read more >
House Passes Bill to Delay Fiduciary Rule
H.R. 1090, a bill sponsored by Rep. Ann Wagner (R-Missouri) that would yank the reins on the Department of Labor’s (DOL’s) fiduciary rule, passed the House Tuesday afternoon after extended commentary from a long list of representatives. The legislation would prohibit the DOL from issuing a new conflict of interest rule applying under the Employee Retirement Income Security Act (ERISA) until the Securities and Exchange Commission (SEC) moves forward on its own rulemaking that would apply more generally to brokers and advisers.Read more >
From the Magazine
Engaging Participants in the Age of Automation
Automatic enrollment has gotten many employees into 401(k) plans and defaulted into diversified investments. Now what? “There’s a lot of work to be done after automatic enrollment,” says adviser James McQuillan, president and founder of RJF Financial Services in Minneapolis. Automatic enrollment has accomplished much, he says, but “it’s still leaving many, many employees short of the funds they’ll need at retirement. The job’s not done. We’re just starting.”Read more >
Small Talk
ON THIS DATE: In 1652, the Massachusetts Bay Colony proclaimed itself to be an independent commonwealth. In 1682, William Penn landed at what is now Chester, Pennsylvania. He was the founder of Pennsylvania. In 1863, the International Committee of the Red Cross was founded. In 1945, the first ballpoint pens to be made commercially went on sale at Gimbels Department Store in New York at the price of $12.50 each. In 1960, Muhammad Ali (Cassius Clay) won his first professional fight. In 1966, the National Organization for Women was founded. In 1969, the U.S. Supreme Court ordered an immediate end to all school segregation. In 1995, Jerry Rice of the San Francisco 49ers became the NFL’s career leader in receiving yards with 14,040 yards.
SURVEY SAYS: What some call “socially responsible investing” has been slow to make its way into retirement plans. Last week, the Department of Labor (DOL) issued a piece of guidance Labor Secretary Thomas Perez says will significantly expand the use of environmental, social and governance (ESG) investing principles—what the Department prefers to call economically targeted investments (ETIs)—under the Employee Retirement Income Security Act (ERISA). A regular PLANSPONSOR contributor, Michael Barry, immediately offered his views about what may be a problem with the DOL’s stamp of approval on this type of investing for retirement plans. This week, I’d like to know, do you think the DOL’s guidance is a positive or negative for retirement plan sponsors and participants, and what is your reaction to Michael Barry’s thoughts about it? Of course, your responses are always anonymous. 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 >

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: advertise@strategic-i.com

Subscribe to NEWSDash, click here .

To unsubscribe, click here.

BrightScope / CIO / FWW / Investor Economics / LiquidMetrix / Market Metrics / Matrix Solutions / PLANADVISER / Plan For Life / PLANSPONSOR / Simfund