| Benefit Briefs | Evolving Practices in Investment Lineup Construction | To let them choose or not to let them choose;
that is the plan sponsor’s dilemma. Linda Sandersen, investment consultant and
partner at Bellwether Consulting, says plan sponsors fall anywhere on the
continuum between “Should we protect participants from bad outcomes and ensure
they have assets for retirement?” and “Should we give participants investment
choice, let them make their own decisions, and let them live with the outcomes
of what they choose?” Sandersen told attendees of the 2014 Plan Sponsor Council
of America (PSCA) annual conference that what drives plan sponsors’ decisions about
what to include in their defined contribution (DC) plan investment lineups
includes factors such as how savvy participants are as investors, corporate
culture, participant demographics, individual investment or plan committee
member bias, regulations and fiduciary responsibility, product development, and
new trends and innovations. “There is no one right answer; investment lineup is
something that is specific to the plan sponsor and its circumstances,” she
said.Read more > | When to Expect Contribution Limit Information | “Already attempting to plan for 2015. Do we know when
the new retirement plan contribution limits will be announced?”Read more > | | Buyer's Market | Morningstar Introduces Strategic Beta Classification System | Morningstar Inc. introduced the industry’s first
strategic beta exchange-traded product (ETP) classification system, to help
investors better identify, compare and analyze strategic beta investment
products. The company also published “A Global Guide to Strategic Beta
Exchange-Traded Products,” its first global landscape report about
strategic beta ETPs. Morningstar defines strategic beta as a class of
investment products that track indexes that seek to either improve performance
or alter the level of risk relative to a standard benchmark, representing a
fast-growing middle ground of the active-to-passive spectrum. More
institutional investors are using strategic or smart beta ETFs, many in an
effort to reduce portfolio volatility.Read more > | | Industry Voice | Just out of Reish: 401(k) Freeloaders | I am concerned that plan sponsors are taking a
risk in how they pay for their plans. Many 401(k) plans use revenue sharing to
pay for their operations. For example, revenue sharing paid by a plan’s mutual
funds often covers the cost of the recordkeeper/provider and sometimes the cost
of the consultant/adviser. Since there is no such thing as a free lunch, the
mutual funds that pay revenue sharing usually have higher expenses. In other
words, the money that pays plan costs comes from somewhere, and that
“somewhere” is the participants who invest in those mutual funds. If all of the
mutual funds pay revenue sharing, and if they all pay approximately the same amounts,
fiduciaries can take the view that participants are being treated relatively
fairly. However, that conclusion gets dicey when some pay revenue sharing and
others do not, or when the payments are materially different.Read more > | | Economic Events | In the week
ending September 13, the advance figure for seasonally adjusted initial claims for
unemployment insurance was 280,000, a decrease of 36,000 from the previous
week’s revised level, the Labor Department reported. The previous week’s level
was revised up by 1,000 from 315,000 to 316,000. The four-week moving average
was 299,500, a decrease of 4,750 from the previous week’s revised average. The
previous week’s average was revised up by 250 from 304,000 to 304,250.
Privately-owned
housing starts in August were at a seasonally adjusted annual rate of 956,000,
the Census Bureau announced. This is 14.4% below the revised July estimate of
1,117,000, but is 8.0% above the August 2013 rate of 885,000. Single-family
housing starts in August were at a rate of 643,000; this is 2.4% below the revised
July figure of 659,000. The August rate for units in buildings with five units
or more was 304,000.
The average interest rate for a 30-year fixed-rate
mortgage is 4.23%, up from 4.12% one week ago, according to Freddie Mac. The
average interest rate for a 15-year fixed-rate mortgage is 3.37%, up from
3.26%.
| | Market Mirror | Thursday, the Dow climbed 109.14 points
(0.64%) to 17,265.99, the NASDAQ gained 31.24 points (0.68%) to finish at
4,593.43, and the S&P 500 increased 9.79 points (0.49%) to 2,011.36. The
Russell 2000 closed 5.38 points (0.47%) higher at 1,159.27, and the Wilshire
5000 was up 93.29 points (0.44%) at 21,254.01.
On the NYSE, 3.2 billion shares changed
hands, with 1.6 advancing issues for every declining issue. On the NASDAQ, 2.8
billion shares traded, with a 1.5 to 1 ratio of advancers to decliners.
The price of the 10-year Treasury note decreased 6/32,
bringing its yield up to 2.639%. The price of the 30-year Treasury bond was
down 4/32, increasing its yield to 3.356%.
| | Rules & Regulators | Saxon Angle: Ruling on ESOP Prudence | The Supreme Court of the U.S. (SCOTUS) handed
down its decision in Fifth Third Bancorp
v. Dudenhoeffer, concluding that Employee Retirement Income Security Act
(ERISA) fiduciaries are not entitled to a presumption of prudence when
investing in employer stock. While it struck the presumption entirely, the
court provided new and potentially useful guidance regarding the duties of plan
fiduciaries, particularly fiduciaries of publicly traded companies.Read more > | Expect Some Tax Reform Effect on Retirement Plans | “If Congress enacts tax reform, pensions and
savings laws will be modified,” contends Russell W. Sullivan, senior adviser,
Federal Public Affairs, McGuireWoods Consulting. Sullivan explained to
attendees of the 2014 Plan Sponsor Council of America (PSCA) Annual Conference
that the main drivers of tax reform are in place. And, according to the Joint Committee
on Taxation, benefits and retirement plans account for four of the top 10
exclusions. “So, it’s likely tax reform will affect employee benefits,” he
said.Read more > | | Small Talk | ON
THIS DATE: In 1876,
Melville R. Bissell patented the carpet sweeper. In 1881, 80 days after a failed office seeker shot him in Washington,
D.C., President James A. Garfield died of complications from his wounds. In 1970, “The Mary Tyler Moore
Show” premiered on CBS-TV. In 1995,
a manifesto by the Unabomber, an anti-technology terrorist, was published by
The New York Times and Washington Post in the hope that someone would recognize
the person who, for 17 years, had been sending homemade bombs through the mail
that had killed and maimed innocent people around the United States. After
reading the manifesto, David Kaczynski linked the writing style to that of his
older brother Ted, who was later convicted of the attacks and sentenced to life
in prison without parole. All told, the Unabomber was responsible for murdering
three people and injuring another 23.
And now it’s time for an abbreviated version of FRIDAY FILES!
| You’re friends are holding it, man, go ahead and
jump. They got it, go ahead and… ooops.Read more > | What a professional! A creature lands on this
flautist’s head and she doesn’t miss a tune.Read more > | Ever wondered how deodorants and antiperspirants
work?Read more > | In the second round of the 2014 TOUR
Championship by Coca-Cola, Rory McIlroy’s tee shot went left into the trees and
somehow landed in the pocket of a spectator.Read more > | Have a wonderful weekend! | 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.
|
|
|