Products July 10, 2015

Financial Wellness Firm Rolls Out Voluntary Option

Four Seasons Financial Education has created an employee-paid financial wellness program.
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A financial wellness vendor, Four Seasons Financial Education (FSFE), has introduced a voluntary option to its corporate financial wellness programs. According to FSFE, this offering is the first of its kind in the U.S. and gives employers an alternative to traditional programs for which plan sponsors generally cover the cost.

The voluntary program, called PlanWell, was unveiled after FSFE discovered that 59% of its own employees said they would be likely to share “some cost in a financial wellness program if it could help them toward their financial goals” in a company financial wellness survey. Another 25.8% of employees answered “possibly” to the same question.

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Most employers want to offer some type of financial wellness program to their employees, according to Travis Freeman, president of FSFE. A program that has employees pay some or all of the cost may make it possible for more plan sponsors to offer financial wellness.

PlanWell is being offered on a limited basis through the rest of the year. For more information, email Anna Fruits at Anna.Fruits@FSFE.com.
Administration July 10, 2015

Liability Decrease Drives Increase in Pension Funded Status

Public pensions and foundations and endowments suffered from low returns.
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The funded status of the typical U.S. corporate pension plan increased 1.5 percentage points in June to 87.8%, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG).                    

Liabilities declined more rapidly than assets during the month. The June BNY Mellon Institutional Scorecard is the first to reflect a realignment in the December 2014 funded status for the typical U.S. corporate plan resulting from recent changes in mortality tables produced by the Society of Actuaries to estimate life expectancies. These longer life expectancy assumptions caused a 5-percentage-point reduction in the December 2014 funded status, which was then carried forward, ISSG said.                   

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“We expect additional revisions as more companies adopt these changes in the mortality tables,” says Andrew D. Wozniak, head of fiduciary solutions, ISSG.

For the typical U.S. corporate plan, assets in June fell 2.1%, while liabilities declined 3.8% as the Aa corporate discount rate rose 29 basis points (bps) to 4.49%. This was the fifth consecutive month for a rise in the discount rate and the third consecutive month in which most asset classes outperformed the liability at the typical corporate plan, ISSG said.

“The significant rise in the Aa corporate discount rate in June continued the momentum toward lower liabilities,” says Wozniak. “Discounting the impact of the new mortality tables, the funded status of typical corporate plans continues to improve because of the declining liabilities.”

Public defined benefit (DB) plans in June missed their return target by 2.3% as assets declined 1.7%, according to the monthly report. Year over year, public plans are 6.8% below their annual return target, ISSG said.

For endowments and foundations, the real return in June was -2.0% as assets fell 1.3%. Year over year, endowments and foundations are behind their inflation plus spending target by 5.6%.

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