Compliance November 10, 2011

EBSA Creates New Consumer Assistance Web Page

November 10, 2011 (PLANSPONSOR.com) – The U.S. Department of Labor’s Employee Benefits Security Administration  (EBSA) has created a new consumer assistance Web page that provides access to useful information, and allows users to submit questions and complaints about health and retirement plans electronically.
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The page includes links to various tools and publications with information on benefit plans, as well as answers to questions about “hot topics.” Users also have the option to submit a question, file a complaint, or report a problem with their plan. Inquiries and complaints submitted are sent directly to EBSA benefits advisers, who will respond as soon as possible, but no later than three business days. Additionally, the system automatically routes the requests to the appropriate EBSA regional office based on users’ ZIP codes.

The new Web page is also available in Spanish. EBSA has a number of benefits advisers who are fluent in Spanish and a translation service is available for a variety of other languages. The page can be found by going to http://www.dol.gov/ebsa and then selecting “Request Assistance” or “Solicitud de Asistencia” at the top of the page.

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A press release said EBSA receives thousands of calls each year on its toll-free consumer assistance line at 866-444-3272. The agency hopes this new Web page and electronic inquiry system will provide more efficient service to individuals seeking assistance.

“Helping retirement and health plan participants find answers to questions about their benefits and providing assistance when they believe their benefits have been improperly denied is one of our most important responsibilities,” said EBSA Assistant Secretary Phyllis C. Borzi, in the announcement. “The new consumer assistance Web page and electronic inquiry/complaint process will provide quick answers to the most frequently asked questions and connect workers to experienced benefits advisers if assistance is needed.”

Investing November 10, 2011

Investors redeem $18.2B From U.S. Stock Funds in October

November 10, 2011 (PLANSPONSOR.com) – Long-term mutual fund inflows were just $745 million in October, according to Morningstar.
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However, this net figure masked huge disparities in stock and bond flows. The combined $21.1 billion in U.S.-stock and international-stock outflows roughly mirrored the total $23.7 billion in taxable- and municipal-bond fund inflows. With $21.7 billion in inflows, taxable-bond funds had their best month since September 2010. Money market funds shed $19.1 billion. Municipal-bond fund inflows remained in positive territory, but with a modest $2 billion in new deposits.

The $18.2 billion in U.S.-stock outflows were the largest for the asset class since July’s $22.7 billion in net redemptions. Even passively managed U.S.-stock funds, which have actually enjoyed inflows in recent years, had $3.5 billion in outflows. This was just the third month in the past three years in which passively managed equity outflows surpassed $1.5 billion. Overall, U.S.-stock outflows hit $53.5 billion for the year-to-date.

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As has been the case in recent months, the $2.9 billion in international-stock outflows would have been even worse if not for $2.1 billion in diversified emerging-markets equity inflows. (Most of the other major foreign-stock categories had outflows, outside of about $500 million that went into foreign large-value funds.) Emerging-market equities are underperforming U.S. stocks by a wide margin in 2011, but that hasn’t had any impact on monthly inflows. For the year-to-date through October, the diversified emerging-markets category has fallen 14.1%, while returns for the universally hated domestic large-growth category have been basically flat. Yet, emerging-markets equity funds have collected $18.7 billion so far in 2011 while large-growth funds have shed $30.4 billion. 

Intermediate-term and high-yield funds in October collected a combined $18.6 billion. No other bond category came close. October's haul was the category's largest since $12.4 billion in August 2010.

On the other hand, October 2011 will go down as a record month for high-yield bond funds, and there isn’t a close second. The group collected $8.8 billion in new money. To put this in perspective, the previous monthly record was $5.8 billion in March 2003.

The only two major categories with outflows were the new nontraditional bond category and short-term bond funds, which lost $1.8 billion and $1.3 billion, respectively.

Although inflows were still slightly positive for the category in October, four of the category's most prominent funds, including American Funds Capital Income Builder, Ivy Asset Strategy, IVA Worldwide, and BlackRock Global Allocation, had combined outflows of nearly $800 million.

To view the complete report, visit http://corporate.morningstar.com/octflows11/FundFlowsNov2011.pdf. 

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