Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 31st, 2014
Benefit Briefs
Living Costs Hinder Focus on Retirement Saving
Three-quarters of Americans say it is hard to keep up with bills and save for retirement at the same time, with 43% saying it is “very hard,” a survey finds. According to results of the BlackRock Global Investor Pulse Survey, the high cost of living has a particularly acute impact on investors’ psyche in the U.S. Americans report having to allocate about 42% of household income to expenses, compared with only 32% among respondents worldwide. As a result, they have less left over for spending, savings and investing—including retirement. Many Americans are not necessarily putting their money in the best places to achieve their long-term goals.Read more >
Buyer's Market
The retirement plan services businesses of Great-West Financial takes the name “Empower,” effective immediately. Empower is now the second largest retirement services provider in the U.S. market, with nearly 7 million defined contribution participants and more than $400 billion in plan assets, according to Great-West. In an interview with PLANSPONSOR, Robert Reynolds, president and chief executive officer of Great-West Lifeco U.S., and Edmund F. Murphy III, president of Empower, said their vision for the new brand is to make sure plan sponsors and their participants are “engaged in their retirement plans like never before.”Read more >
An Inside Preview of Great-West’s New Retirement Brand
The launch of the “Empower” brand by Great-West Financial will be closely watched by the retirement services industry. PLANSPONSOR spoke with industry professionals who had a chance to preview the brand to hear what sponsors, advisers, and participants can expect to see from Empower.Read more >
Aon Hewitt introduced a health reimbursement arrangement solution that enables companies to more efficiently reimburse retirees transitioning to the Aon Retiree Health Exchange. The Aon Retiree Contingent HRA better aligns employer and retiree cost-management objectives and encourages retirees to make efficient health plan choices in the individual market, Aon says. It allows employers that are moving retirees to the Aon Retiree Health Exchange to structure the HRA reimbursement so that it aligns with actual retiree health care needs.Read more >
Wilshire Consulting Releases Wilshire Mobile
Wilshire Consulting announced the launch of Wilshire Mobile, a new suite of mobile applications (apps) increasing the availability of important retirement plan data and benefits news for clients. The mobile tool includes an Asset and Liability Monitor. This app gives clients that sponsor corporate defined benefit plans the ability to monitor the funded-status of their plans on a daily, monthly, or quarterly basis. It provides asset, liability, and funded ratio information over specified time periods and frequencies, including charting capabilities showing the movement in these statistics and interest rate fluctuations over time.Read more >
Industry Voices
Insights: Embracing Technology
The answer, in many cases, to helping people get on track with retirement savings has been to promote automation. But, as plan sponsors, have you looked at what the experience is like when a participant does want to make a proactive change, as infrequently as that might be? Have you ensured that it is easy to do?Read more >
Economic Events
In the week ending October 25, the advance figure for seasonally adjusted initial claims for unemployment insurance was 287,000, an increase of 3,000 from the previous week’s revised level, the Labor Department reported. The previous week’s level was revised up by 1,000 from 283,000 to 284,000. The four-week moving average was 281,000, a decrease of 250 from the previous week’s revised average. The average interest rate for a 30-year fixed-rate mortgage is 3.98%, up from 3.92% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.13%, up from 3.08%.
Market Mirror
Thursday, the Dow climbed 221.11 points (1.30%) to 17,195.42, the NASDAQ was up 16.91 points (0.37%) at 4,566.14, and the S&P 500 closed 12.35 points (0.62%) higher at 1,994.65. The Russell 2000 increased 9.40 points (0.82%) to 1,155.77, and the Wilshire 5000 gained 120.48 points (0.58%) to finish at 21,005.50. On the NYSE, 3.3 billion shares traded, and on the NASDAQ, 2.8 billion shares changed hands, with 1.7 advancing issues for every declining issue on both exchanges. The price of the 10-year Treasury note increased 3/32, bringing its yield down to 2.307%. The price of the 30-year Treasury bond was up 1/32, decreasing its yield to 3.048%.
Rules & Regulators
PBGC Announces 2015 Premium Rates
The Pension Benefit Guaranty Corporation (PBGC) has updated its website with premium rates for 2015. The per-participant flat premium rate for plan years beginning in 2015 is $57 for single-employer plans (up from a 2014 rate of $49) and $13 for multiemployer plans (up from a 2014 rate of $12).Read more >
Financial Sense
Institutional plan sponsors lost nearly 1% in the third quarter of 2014 at the median, according to Northern Trust Universe data. Longer-term performance remains strong, with one-year returns for all plan types averaging 10% or greater. Institutional plans within the Northern Trust Universe suffered a 0.8% quarterly loss due to negative returns in most investment sectors. Corporate Employee Retirement Income Security Act (ERISA) plans had the best relative performance among all plan types with a return of -0.7%.Read more >
Returns Not Keeping Pace with Multiemployer Plan Liability
While aggregate funding levels of multiemployer plans have nearly returned to pre-crash levels, according to the Milliman Multiemployer Pension Funding Study, the financial crisis has affected individual plans in different ways. The median multiemployer funded percentage of 86% as of December 31, 2013, has nearly recovered to its pre-crash level of 89%. However, the proportion of plans that are less than 80% funded has increased from 29% to 37%. What is keeping some plans from recovering to the funding levels trustees and participants would hope for?Read more >
Small Talk
In time for Halloween, CareerBuilder asked workers to choose from a list of jobs which ones they feel are the most frightful, or submit their own.Read more >
ON THIS DATE: In 1517, the priest and scholar Martin Luther approached the door of the Castle Church in Wittenberg, Germany, and nailed a piece of paper to it containing the 95 revolutionary opinions that began the Protestant Reformation. In 1864, the U.S. Congress admitted Nevada as the 36th state in the Union. In 1892, the book “The Adventures of Sherlock Holmes,” by Arthur Conan Doyle, was published. The book was the first collection of Holmes stories, which Conan Doyle had been publishing in magazines since 1887. In 1926, Harry Houdini, the most celebrated magician and escape artist of the 20th century, died of peritonitis in a Detroit hospital. In 1941, Mount Rushmore was declared complete after 14 years of work. At the time the 60-foot busts of U.S. Presidents George Washington, Thomas Jefferson, Theodore Roosevelt and Abraham Lincoln were finished. In 1950, 21-year-old Earl Lloyd became the first African-American to play in an NBA game when he took the court in the season opener for the Washington Capitols. In 1956, Rear Admiral G.J. Dufek became the first person to land an airplane at the South Pole. Dufek also became the first person to set foot on the South Pole.
FRIDAY FILES REWIND: Enjoy this FRIDAY FILES from three years ago that is mostly Halloween-themed. (Warning: Keep the sound low.)Read more >
Happy Halloween, and have a wonderful weekend!
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