|
| Benefit Briefs |
| Which Findings About Retirement Readiness Are Right? |
| An optimistic view of U.S. retirement
preparedness depends crucially on assumptions about behavior that may not
reflect real world activity or consumption patterns that are unsustainable in
the long run, researchers suggest. In “Are Retirees Falling Short? Reconciling
the Conflicting Evidence,” researchers from the Center for Retirement Research
(CRR) at Boston College compare studies that found about half of pre-retirees
are not on track to maintain their consumption in retirement to studies that found
the majority of retirees have adequate resources. The researchers conclude that
many retirees will fall increasingly short during their retirement.Read more > |
| Ownership of retirement accounts fell in 2013,
but median and mean values of retirement accounts rose substantially, according
to a Federal Reserve Bulletin. Based on its Survey of Consumer Finances (SCF),
the Federal Reserve said ownership of retirement accounts—including individual
retirement accounts (IRAs), Keogh accounts, and employer-sponsored defined
contribution (DC) and defined benefit (DB) accounts—fell below 50% in 2013,
continuing the downward trend also observed between the 2007 and 2010 surveys.
The conditional median value of retirement accounts rose 25%, from $47,200 in
2010, to $59,000 in 2013, and the mean value rose 10%, from $183,400 in 2010 to
$201,300 in 2013. The Federal Reserve attributes this growth to a combination
of resurgent stock markets and increased contributions by retirement plan
participants.Read more > |
| Gens X and Y Need Retirement Savings End Goal |
| Two-thirds (66%) of Generations X and Y have not
calculated how much they need to save for retirement—and only 19% work with a
financial adviser. It’s more than a lack of direction that is hurting Americans
born between 1965 and 1992, according to a study by Security Benefit. A
significant percentage believe saving for retirement is becoming more
difficult, with two-thirds (65%) saying it’s harder for their generation to
save for retirement than it was for previous generations. Additionally, half
(48%) of respondents believe they are behind on saving for retirement while
just 43% said they were satisfied with their current financial situation.Read more > |
|
| Buyer's Market |
| Aspire Financial Services launched an enhanced
403(b) enrollment and client service portal. The 403(b) enrollment portal will
provide quick and simple navigation for 403(b) participants and advisers to
access enrollment materials and plan information, the firm says.Read more > |
| Mercer Investments is adding four senior
investment professionals to its staff, to provide additional client support
across the firm’s North America regions. Rich Nuzum, head of Mercer Investments
in North America, says the firm is building additional delivery capacity ahead
of anticipated growth in its investment consulting and fiduciary management
business.Read more > |
|
| Market Mirror |
| Yesterday, the Dow slipped 25.94 points
(0.15%) to 17,111.42, the NASDAQ ticked up 9.39 points (0.20%) to 4,592.29, and
the S&P 500 closed 6.17 points (0.31%) lower at 2,001.54. The Russell 2000
increased 2.18 points (0.19%) to 1,172.31, and the Wilshire 5000 was down 48.36
points (0.23%) at 21,221.96.
On the NYSE, 3.2 billion shares changed
hands, with 1.6 declining issues for every advancing issue. On the NASDAQ, 2.8
billion shares traded, with a 1.2 to 1 ratio of advancers to decliners.
The price of the 10-year Treasury note slipped 3/32,
bringing its yield up to 2.470%. The price of the 30-year Treasury bond
increased 4/32, decreasing its yield to 3.223%.
|
|
| Rules & Regulators |
| IRS to Discuss DB Plan Updates |
| The Internal Revenue Service (IRS) will host a
webinar about defined benefit (DB) plan issues on September 18. Topics for
discussion include recent legislation, recent and pending regulatory guidance,
current developments in determination letter and Employee Plans Compliance
Resolution System cases, and common plan examination issues.Read more > |
|
| Financial Sense |
| Pension Fund Sues Banks for Rate-Rigging |
| The Alaska Electrical Pension Fund has accused
13 banks of manipulating an interest rate benchmark used to price certain
derivatives instruments. The complaint accuses the banks and defendant ICAP of
entering into a secret conspiracy to fix the ISDAfix rate at artificial levels.
The lawsuit explains that the ISDAfix is a key interest rate for a broad range
of interest rate derivatives and other financial instruments. For USD swap
rates, ISDAfix was administered by ICAP and was based on the submissions of the
defendant banks.Read more > |
| New Jersey is asking a court to dismiss lawsuits
brought by unions challenging Governor Chris Christie’s decision to reduce the
state’s contribution to its pension fund this year. According to a court filing
by Acting Attorney General of New Jersey John J. Hoffman, the 2011 pension
reform that Governor Christie signed into law violated the state’s constitution
by mandating certain contribution amounts by the state. Hoffman says the
contractual right in the pension reform violates the debt limitation and
appropriation clauses of the state’s constitution and detracts the governor’s
constitutional veto power.Read more > |
| Rethinking Risk and Return in Equity Portfolios |
| Retirement plan sponsors and participants and
other long-term investors should favor low-volatility stocks over riskier
equities, according to a new analysis from Research Affiliates LLC. In a new
paper, “True Grit: The Durable Low Volatility Effect,” analysts from Research
Affiliates question the tautology that riskier portfolios have higher expected
returns over long-term investment horizons than do low-risk portfolios. It’s a
piece of reasoning underlying much of the investment advice given to retirement
plan participants: Riskier portfolios may suffer when the markets fall, but in
the long run any losses will be more than compensated by the strong growth
risky portfolios make possible. However, the paper argues that as the investment
management industry learns more about behavioral finance and becomes more
willing to question whether markets truly turn on rational, utility-maximizing
behavior, the traditional axioms of risk and return will increasingly come into
question.Read more > |
|
| Small Talk |
| ON
THIS DATE: In
1776, the Continental Congress
formally declared the name of the new nation to be the “United
States” of America. This replaced the term “United Colonies,”
which had been in general use. In 1850,
California became the 31st state in the union. In 1926, the National Broadcasting Company (NBC) was created by the
Radio Corporation of America (RCA). In 1965,
Los Angeles Dodgers pitcher Sandy Koufax pitched the eighth perfect game in
major league history. In 1966,
President Lyndon Johnson signed the National Traffic and Motor Vehicle Safety
Act into law. Immediately afterward, he signed the Highway Safety Act. The two
bills made the federal government responsible for setting and enforcing safety
standards for cars and roads. In 1979,
Tracy Austin, at 16, became the youngest player to win the U.S. Open women’s
tennis title. In 1986, Ted Turner
presented the first of his colorized films on WTBS. In 1994, the space shuttle Discovery blasted off on an 11-day mission.
In 1999, the Sega Dreamcast game
system went on sale. By 1:00pm all Toys R Us locations in the U.S. had sold
out.
TUESDAY
TRIVIA: The National Football League (NFL) team Green
Bay Packers was named Packers because it was initially sponsored by the Indian
Packing Co. Co-founder Earl “Curly” Lambeau worked for the Indian Packing Co.
at the time the team was formed.
|
| TRIVIAL PURSUITS:
How did the NFL team Cleveland Browns get its name?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 > |
| News from PLANSPONSOR.com
Copyright © Asset International, Inc.,
2014.
All
rights reserved. No reproduction without
prior authorization.
|
