Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
September 29th, 2014
Retirement Plan Sponsors and Advisers of the Year
Looking for Award-Worthy Plan Sponsors!
Is your company’s retirement plan run exceptionally well? Is your pension plan well-funded and/or pursuing interesting strategies (whether active or frozen)? Is your DC plan committee focused on fulfilling fiduciary requirements and achieving successful outcomes for participants? We are now accepting nominations for the 2015 PLANSPONSOR Plan Sponsor of the Year awards. This is an excellent opportunity for you to tell your story and share you successes with peers. We are looking for plans of all types (pension, 401(k), 403(b), 457, public DC, etc) and of all sizes. You can nominate a plan, or yourself, here.Read more >
PLANSPONSOR Retirement Plan Adviser of the Year
Has your plan been improved by the help of a skilled professional? Has an adviser or consultant helped with DB plan funding or plan maintenance? What about helping design a DC plan to improve focus on fulfilling fiduciary requirements and achieving successful outcomes for participants? If you know a superb retirement plan adviser you think is worthy of the 2015 PLANSPONSOR Retirement Plan of the Year awards, please nominate him or her! Nominations can be made here.Read more >
Benefit Briefs
Some Millennials Are Eager for Advice
Some subsets of Millennial investors are just as likely as their parents to seek professional financial advice, according to new research from Phoenix Marketing International. The similarity in advice-seeking behavior between Baby Boomer parents and Millennial children is especially prevalent at the upper-end of the income scale, the study suggests.Read more >
Buyer's Market
Renowned fixed-income manager William H. Gross is leaving PIMCO, the company he co-founded, to join Janus Capital Group. Gross will join Janus on September 29 and, effective October 6, he will manage a recently-launched Janus Global Unconstrained Bond Fund and related strategies. A new office is being established in Newport Beach, California, at which Gross will be based.Read more >
What the ‘Bond King’ Move Means for Plan Sponsors
In the defined contribution (DC) world, the speculation about how retirement plan sponsors and participants will be impacted by Bill Gross’ departure from PIMCO, the company he co-founded, is mixed. “We are anticipating unprecedented outflows [from the impacted PIMCO fund],” said Michael Kozemchak, managing director of Institutional Investment Consulting, in Bloomfield Hills, Michigan. Pointing to forecasts by Bernstein Research analysts that predict investors could still yank up to as much as 30% of the fund’s assets, Kozemchak says the event puts him in mind of the fund scandals that took place over market timing late in 2000. As to what the event means for retirement plan investors, he reminds plan sponsors of the Department of Labor’s (DOL’s) guidance about their duty of inquiry. In other words, plan sponsors need to be sure they evaluate the fact pattern, evaluate their options and document decisions about plan investments. In the case of the PIMCO Total Return Fund, he says, “The guy who has run it for 40 years is gone. These massive outflows will translate to underperformance for PIMCO, which will exacerbate their underperformance for the year.”Read more >
Investment management firm AllianceBernstein L.P. announced three new hires to its defined contribution team. Mark Brown has joined the firm as managing director for defined contribution (DC) products, a role in which he is responsible for supporting defined contribution business development activities through the firm’s institutional sales force. Franchesca Maddalena joined the firm as vice president and defined contribution marketing director, responsible for DC distribution marketing efforts. Heather Balley will join the firm as vice president and DC participant communications director, responsible for all plan participant communications regarding products and retirement readiness.Read more >
Industry Voices
Industry Voice: Say ‘No’ to the Status Quo
If you were to ask any one of us about our innovative spirit, our ability to diverge from the masses, and to create ideas that are truly different, we would likely declare our uniqueness. But we’re not as unique as we think. We humans tend to live in a collective consciousness, one where we think very much alike and have trouble breaking from convention. This is not opinion, nor is it a criticism, it is fact. That’s why terms like “tipping point” exist, and why authors like Malcolm Gladwell can make millions of dollars writing books about how concepts tip in a complex society. It’s also the reason we have to break with conventional thinking in order to make more than measured progress when trying to change savings behavior in America.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Tomorrow, the Conference Board will release its Consumer Confidence Index for September. Wednesday, the Census Bureau will report about construction spending for August. Thursday, the Labor Department will issue its initial claims report and the Census Bureau will report about factory orders for August. Friday, we’ll see a report about nonfarm payrolls from the Bureau of Labor Statistics and learn the unemployment rate for September.
Market Mirror
Friday, the Dow climbed 167.35 points (0.99%) to 17,113.15, the NASDAQ gained 45.45 points (1.02%) to finish at 4,512.19, and the S&P 500 increased 16.86 points (0.86%) to 1,982.85. The Russell 2000 was up 9.09 points (0.82%) at 1,119.33, and the Wilshire 5000 closed 178.35 points (0.86%) higher at 20,855.67. On the NYSE, 3.2 billion shares traded, with 2.7 advancing issues for every declining issue. On the NASDAQ, 2.7 billion shares changed hands, with a more than 2 to 1 lead for advancers. The price of the 10-year Treasury note decreased 7/32, increasing its yield to 2.530%. The price of the 30-year Treasury bond was down 3/32, bringing its yield up to 3.217%. WEEK’S WORTH: For the week ending September 26, the Dow was down 0.96%, the NASDAQ closed 1.48% lower, and the S&P 500 decreased 1.37%. The Russell 2000 fell 2.41%, and the Wilshire 5000 lost 1.72%.
Financial Sense
Institutions’ Appetite for Alternatives Still Growing
A recent survey of investment consultants, conducted by Cerulli Associates, shows that they are actively increasing U.S. institutional investors’ level of exposure to alternative assets. Institutions’ eagerness to adopt alternatives as part of their overall investment strategy is rooted in their desire for greater diversification, lower volatility and enhanced returns in a low interest-rate environment, according to Cerulli. In addition, investors are looking to alternative strategies to provide income, since deriving income from the traditional asset classes has proven more difficult.Read more >
Small Talk
ON THIS DATE: In 1982, in Chicago, Illinois, seven people died after taking capsules of Extra-Strength Tylenol that had been laced with cyanide. 264,000 bottles were recalled. In 1983, “A Chorus Line” with performance number 3,389 became the longest running show on Broadway. In 1994, the U.S. House voted to end the practice of lobbyist buying meals and entertainment for members of Congress.
SURVEY SAYS: Sick Employees in the Workplace Fall is here, and the weather will only get cooler, which seems to bring with it more colds and cases of the flu. Last week, I asked NewsDash readers for their thoughts about sick employees coming to or staying in the workplace. Seventy-four percent of responding readers indicated they think there should be a workplace policy against sick employees coming to/staying at work, while 26% said there should not. Asked which symptoms they think should be cause for them or a coworker to stay home or go home from work, 4.4% selected sniffing, 27.4% chose constantly having to blow their nose, 54.9% selected persistent coughing, 90.3% chose fever, and 77% selected stomach issues. Nearly 69% of respondents said if they felt a sick coworker was a threat to their health, they would say something to him/her. I asked respondent to share tips for maintaining a healthy workplace. The top suggestions were wash hands regularly and use hand sanitizer—even placing hand sanitizer stations around the office. One reader advises, “Have a messy desk. Flu Germs appear to fear a messy desk.” Among verbatim comments, there was strong sentiment that sick employees should stay, or go, home. However, some readers showed understanding about those not offered sick days, not paid if they take a sick day or who need to use them for their children. Many commented that a workplace policy against sick employees in the workplace would be hard to enforce. Editor’s Choice goes to the reader who said: “Companies should all have a kindergarten teacher come in around this time of the year and re-teach folks the basics again.” Thank you to everyone who participated in our survey!Read more >
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News from PLANSPONSOR.com   Copyright © Asset International, Inc., 2014. All rights reserved.  No reproduction without prior authorization.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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