Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
September 4th, 2015
Benefits & Administration
Do Sponsors Need a Policy for Education?
Retirement plans governed by the Employee Retirement Income Security Act (ERISA) are already subject to a range of regulations and requirements, but plan sponsors can increase the rules to which they must adhere by adopting formal policy statements. The majority of providers in the industry would agree that an investment policy statement is a good practice, but should plan sponsors also adopt an education policy statement that outlines their goals and methods for educating retirement plan participants?Read more >
The funded status of the typical U.S. corporate pension plan declined in August, dropping by 2.5 percentage points to 84.2%. While liabilities fell slightly due to widening credit spreads, the decline was driven by a larger drop in asset values, according to BNY Mellon Fiduciary Solutions. Public plans, foundations and endowments also failed to meet targets due to declining asset values.Read more >
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Most Employers Implemented FSA Rollover Rule
When flexible spending account (FSA) plan changes became effective for plan year 2014, more than half of companies (51%) adopted the rollover option, versus 49% that elected to offer a 2 1/2-month grace period for using FSA funds, according to the 2014 Flexible Spending Account Trends Study from the Healthcare Trends Institute. Sixty-eight percent of employers that implemented the FSA rollover rule said they did so to encourage participation by those employees that were reluctant due to the fear of losing money they put into the account.Read more >
Nearly 80% percent of people carrying student loan debt would like their workplace to offer assistance with paying it down, iontuition, a member of the Ceannate companies, found in a survey of 1,000 individuals carrying such debt. Which would workers choose between student loan debt assistance, health care benefits and a 401(k)?Read more >
Half of Workers Lack a Plan for Retirement
Fifty-five percent of American workers do not have a plan for their retirement, LifeCare and the Financial Planning Association (FPA) found in a survey. Sixty-seven percent of those not saving for retirement say they do not have the resources to do so after taking care of their everyday expenses, such as housing, transportation, food, household items, credit repayment and eldercare, and 24% do not have any idea about how to begin.Read more >
The aggregate funded ratio for U.S. corporate pension plans decreased to 83.3% for the month of August, according to Wilshire Consulting, the institutional investment advisory and outsourced chief investment officer (CIO) business unit of Wilshire Associates Incorporated. The decrease in funding was the result of a larger decrease in asset value compared to the decrease in liability value.Read more >
Economic Events

In the week ending August 29, the advance figure for seasonally adjusted initial claims for unemployment insurance was 282,000, an increase of 12,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 275,500, an increase of 3,250 from the previous week’s revised average.                                                

The average interest rate for a 30-year fixed-rate mortgage is 3.89%, up from 3.84%, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.09%, up from 3.06%.

Market Mirror

Major U.S. stock indices ended mostly higher after the head of the European Central Bank said it’s ready to give the region a bigger dose of stimulus should inflation fail to pick up, the Associated Press reports. The Dow closed 23.38 points (0.14%) higher at 16,374.76, the NASDAQ was down 16.48 points (0.35%) at 4,733.50, and the S&P 500 increased 2.16 points (0.11%) to 1,951.02. The Russell 2000 slipped nearly one point (0.08%) to 1,145.15, and the Wilshire 5000 gained 32.22 points (0.16%) to finish at 20,590.63.                                      

On the NYSE, 3.2 billion shares changed hands, with 1.8 advancing issues for every declining issue. On the NASDAQ, nearly 2.8 billion shares traded, with an even split between advancers and decliners.

The price of the 10-year Treasury note was up 7/32, decreasing its yield to 2.160%. The price of the 30-year Treasury bond increased 8/32, bringing its yield down to 2.941%.

Compliance
DOL Accuses ESOP Fiduciaries of Wrongdoing
The Department of Labor (DOL) has filed a complaint alleging that fiduciaries of the BAT Masonry Co. Inc. Employee Stock Ownership Plan (ESOP) breached their duties of prudence and loyalty to the ESOP and engaged in prohibited transactions in connection with the ESOP’s purchase of the company stock and one trustee’s withdrawals of cash thereafter, in violation of the Employee Retirement Income Security Act (ERISA). The lawsuit says BAT Masonry was valued at $13 million less than what its ESOP paid for company stock.Read more >
Investing
Retirement Investors Should Plan for Rising Rates
Asset managers and retirement plan advisers say they do not expect the Federal Reserve to raise the Federal Funds Rate from its current 25 basis points and that the uncertainty over when the Fed will raise rates will lead to continued volatility in both the fixed income and equities markets. However, if the Fed were to raise rates, it would benefit equities in the short term, while fixed income investments would decrease in value.Read more >
Small Talk

ON THIS DATE: In 1609, English navigator Henry Hudson began exploring the island of Manhattan. In 1781, Los Angeles, California, was founded by Spanish settlers. The original name was “El Pueblo de Nuestra Senora La Reina de Los Angeles de Porciuncula.” In 1833, Barney Flaherty answered an ad in “The New York Sun” and became the first newsboy/paperboy at the age of 10. In 1882, Thomas Edison’s Pearl Street electric power station began operations in New York City. It was the first display of a practical electrical lighting system. In 1886, Geronimo, and the Apache Indians he led, surrendered in Skeleton Canyon in Arizona to General Nelson Miles. In 1888, George Eastman registered the name “Kodak” and patented his roll-film camera. The camera took 100 exposures per roll. In 1951, the first live, coast-to-coast TV broadcast took place in the U.S. The event took place in San Francisco, California, from the Japanese Peace Treaty Conference. In 1957, the Ford Motor Company began selling the Edsel. The car was so unpopular that it was taken off the market after only two years. In 1967, “Gilligan’s Island” aired for the last time on CBS-TV. It ran for 98 shows. In 1971, “The Lawrence Welk Show” was seen for the last time on ABC-TV. In 1998, Google was incorporated as a privately held company.

 

And now it’s time for FRIDAY FILES!

One thing I love about cats is their ability to play it cool through pain or embarrassment.Read more >
This fearless TV reporter was embarrassed by his reaction to a bug.Read more >

In Orient, Maine, police say a 29-year-old man was driving with seven passengers who decided to take a group selfie. The driver leaned over to join the photo, ran off the road and into a tree. According to the local NBC News station, several passengers suffered injuries, including cuts, a fractured nose and neck and back injuries. The driver was cited for failing to maintain control of a motor vehicle due to being distracted.

In Acailandia, Brazil, two men on a motorcycle approached three women and demanded their cell phones. But, they didn’t realize the women had just left jiu-jitsu training and one was an MMA fighter. Realizing that the men were unarmed, MMA fighter Monique Bastos lifted the rear wheel of the motorcycle and sent them tumbling to the ground, according to MMAfighting.com. One man was able to get away, but Bastos put the other in a chokehold with her legs and held him until police arrived.

If your vehicle is already hoisted onto the tow truck, you lost. Give up.Read more >

In Bradenton, Florida, a man was arrested after attacking his mom—with potato salad. According to The Smoking Gun, when the woman and her son sat down to dinner, they got into an argument and the son started pelting her with potato salad in the face. Allegedly he pushed her to the floor, and when she threatened to call 911, he fled the house on a bicycle. A police officer, who said the man seemed into.xicated, stopped him a few blocks from the home and arrested him. He is charged with a misde.meanor battery count and a probation violation.

In Winchester, Kentucky, a man hired a pros.ti.tute who stole his wallet and fled. He went after the woman and when he reached her apartment door, he started banging on it and yelling and saying he was a police officer. According to the local CBS News station, a concerned neighbor called police. When a real police officer showed up, the man told him to go away because he was a police officer. When the real police officer tried to get the man away from the door, the man charged at him, and the real officer tased the man. The man was charged with impersonating a peace officer, menacing, disorderly conduct and public into.xication.                    

In Denver, Colorado, two would-be robbers had a bad day. The local ABC News station reports that the two men first approached a couple on a train, and demanded money at gu.npoint. The couple didn’t have any money, so the suspects walked away. The men then approached a second couple, who pointed out that their g.un wasn’t loaded, so they couldn’t even shoot them. When the train stopped, the two men ran, and one of them loaded the g.un while he ran. When they approached another group of people, a fight ensued and the man with the g.un lost it in the fight and was shot. He was taken to the hospital, and the other man was arrested.

Have a wonderful holiday weekend. NewsDash will be back in your inbox Tuesday.
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

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