Benefits May 1, 2006

Lydall Jumps on DB to DC Bandwagon

May 1, 2006 (PLANSPONSOR.com) - Lydall Inc. has announced it will freeze its defined benefit pension plans and enhance its 401(k) plan.
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Effective June 30, 2006, the company will freeze the accrued pension benefits for all US employees currently under its defined benefit plans who are not covered under a collective bargaining agreement, according to the announcement. Lydall had previously closed its pension plans to new hires as of December 31, 2005.

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The company will increase its 401(k) match contribution to 100% of employee pretax contributions up to 6% of compensation, the announcement said. The enhancements to the 401(k) plan will also include automatic enrollment of employees not currently in the plan.

David Freeman, President and Chief Executive Officer of Lydall, said in a letter to employees, “The costs and complexities of providing defined benefit pension plans directly affect our ability to compete globally with other companies that do not have similar pension obligations.”

The Company expects a reduction in its retirement-related expense of approximately $1.5 to $2.0 million on an annual basis, based on year-end 2005 pension assumptions.

Lydall is joining a long line of companies making the switch from traditional DB plans to defined contribution plans (See Illinois Chemical Company Freezes Its DB Plan ).

Investing April 28, 2006

Fund Flows Continue Weak Cycle in March

April 28, 2006 (PLANSPONSOR.com) - Net fund flows into US mutual funds continued to lose ground in March with a $28.3-billion influx - down significantly from February's $43.3-billion showing, according to a Financial Research Corporation (FRC) report.
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Even February’s showing  (See FRC: February Fund Flow Loses Some Punch )  was down from January’s strongest-of-the-year performance, according to the FRC data.

In March, International/Global funds led the way with $20.1 billion in inflows while Domestic Equities ended the month with a $4.2 billion intake. Corporate bond funds showed a $3.41 billion influx in March while government bond funds gave back $275 million.

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Per Morningstar fund category, it was Foreign Large-Cap Blend leading the way with a $5.83 billion March gain while Large Blend was close on its heels at $5.44 billion. Moderate Allocation funds got a $3.62 billion boost over the month while Foreign Large Growth was up by $3.27 billion and Intermediate Term bond was up by $2.9 billion.

Fund Families

Vanguard Group and American Funds held the top fund group spots in March, with $849 billion and $836 billion, respectively.  Behind the two sizeable fund families in the March total asset race were:

  • Fidelity Investments – $789 billion
  • Franklin Distributors Inc. – $264 billion
  • Barclays Global Investors Funds – $198 billion.

Among March best sellers was American Funds at the top, netting a $6.89 billion inflow.  This was followed by Vanguard’s $6.6 billion, Barclays’ $4.17 billion and Fidelity’s $3 billion.

Top Sellers

In the top slots for March hot fund sellers were:

  • American Funds Growth Fund – $2.2 billion
  • American Funds Capital World Growth and Income – $1.6 billion
  • Dodge & Cox’s International Stock Fund – $1.2 billion.

The full report is  here .

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