Benefits June 18, 2012

Companies Not Confident in Understanding ACA Requirements

June 18, 2012 (PLANSPONSOR.com) - Just 40% of HR decision makers from large organizations are very confident about their understanding of employer requirements under the Affordable Care Act (ACA), according to an ADP Research Institute survey.
Reported by

Even fewer respondents in small companies (20%) and mid-sized companies (17%) expressed that same level of confidence.   

A majority of human resource and benefits decision makers at small and mid-sized companies (67% and 62%, respectively) indicated they are unaware of the upcoming employee notification requirement about public exchanges. Thirty-two percent of survey respondents from large organizations indicated a similar lack of awareness.  

Get more!  Sign up for PLANSPONSOR newsletters.

As for being ready to provide the newly required summary of benefits and coverage, 66% of large companies, 50% of mid-sized companies and 31% of small businesses say they are prepared.   

ADP recently surveyed more than 800 human resource and benefits decision makers in U.S. organizations of all sizes.  

Full results of the survey are here.
Administration June 18, 2012

Most TDFs Employ a “Through” Glidepath

June 18, 2012 (PLANSPONSOR.com) – More than six in 10 target-date funds (63.6%) surveyed by Callan employ a glidepath managed “through” retirement.
Reported by

In total, these funds account for the majority of assets managed (87.7%). Twenty-eight target date providers offer 35 series using this approach, according to Callan’s latest survey of target-date fund managers. The universe of “through” managed funds is divided into fully active management (31.4%), passive management (25.7%) and those that combine active and passive management (42.8%).   

Target-date funds (TDFs) managed “to” retirement accounted for 12.3% of total target date assets at year end. The universe of “to” managed funds is split nearly equally between active (47.6%) and an active/passive blend (42.8%); whereas there is only one purely passive target date fund in this universe.  

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Prevalence of inflation-sensitive assets increased relative to 2011. The survey found greater use of commodities and U.S. and international REITs (Real Estate Investment Trusts) in particular. In 2011, more than half of the target date managers surveyed changed their glidepath as a result of a recent review. The most common glidepath change reported was the addition/ increase in the inflation-protection component. In Callan’s 2012 survey, two-thirds of managers reported glidepath modifications, once again primarily surrounding inflation-sensitive assets. This category includes TIPS (Treasury Inflation-Protected Securities), commodities, REITs, diversified real assets, natural resources, infrastructure and gold and precious metals. 

There is also an increase in the use of emerging markets—both equities and debt. Emerging markets equity prevalence jumped from 60% of providers to 76.7% over the last year. The second most common glidepath change reported in 2012 involved improving the diversification within asset classes, especially international equities. Diversification efforts included adding/increasing emerging markets equity exposure (this ranked fourth in 2010 changes), as well as adding or increasing small/mid-cap international exposure.  

One-fifth of funds report an allocation to alternatives—namely absolute return strategies.The average allocation within the Callan Target Date Index was 1.3%, up from 1% in 2011.  

One trend that appears to be underreported in the survey is a reduction in the overall equity exposure of TDFs. In 2012 very few target-date fund managers reported changing their overall equity to fixed income exposure (7%), and those that did noted only marginal changes. However, a year-over-year quantitative analysis of the typical TDF’s equity glidepath reveals a material decline in equities and equity-like investments.

«