| Sponsors Actively Working to Derisk DBs | Plan sponsors feel tremendous pressure from
their defined benefit (DB) plans and are looking to reduce their risks,
according to the Mercer / CFO Research 2015 Risk Survey, “Taking the Next Step
in Pension Risk Management: Planning to Move Ahead.” In 2013, when Mercer
conducted its previous survey, funded status improved to 88% due to rising
interest rates and strong equity returns. However, in 2014, it fell to 79%,
prompting 70% of DB plan sponsors in 2015 to contribute more than the required
minimum amount to their DB plans. In addition, 59% of sponsors have offered
some type of one-time lump-sum payment to DB plan participants, and another 49%
expect to offer such a payment within the next two years.Read more > | | Ask the Experts | Nondiscrimination Testing Required for 403(b)s | “What types of nondiscrimination tests are required
for 403(b) plans? For example, is a top-heavy test required?”Read more > | | Sponsored message from Charles Schwab | “The unique value of Target-Date Funds” from Charles Schwab Investment ManagementRead more > | | Market Mirror | Yesterday,
the Dow was up 13.96 points (0.08%) at 18,100.41, the NASDAQ increased 8.72
points (0.17%) to 5,218.86, and the S&P 500 ticked up 1.64 points (0.08%)
to 2,128.28. The Russell 2000 lost 6.87 points (0.54%) to finish at 1,260.22,
and the Wilshire 5000 slipped 7.56 points (0.03%) to 22,413.11.
On the NYSE,
3.2 billion shares changed hands, and on the NASDAQ, 2.9 billion shares traded,
with declining issues outnumbering advancing issues more than 2 to 1 on both
exchanges.
The price of the 10-year Treasury note was down 8/32,
increasing its yield to 2.375%. The price of the 10-year Treasury note
decreased 11/32, bringing its yield up to 3.106%.
| | From the Magazine | Some Confusion in Understanding Glide Paths | Knowing a target-date fund (TDF)’s glide path is
crucial to understanding its risk profile and to selecting the right fund for a
plan sponsor’s participants. For years, the industry has divided target-date
suites into “to retirement” funds and “through retirement” funds, based on
whether the asset allocation reaches its most conservative point at the date of
retirement—for “to” funds—or sometime beyond—for “through” funds. Still, this
distinction remains a point of confusion for many plan sponsors.Read more > | Stable Value Funds More Complicated Than Realized | After spending their careers scrimping and
saving, many participants are all too happy to pull their retirement funds out
of volatile equity markets and trade the prospect of high returns for the
safety of capital. Money market funds used to be a logical choice, but these
have offered no return to speak of since the financial crisis. Another option
for capital preservation is stable value funds—one of the first investments
available in defined contribution (DC) plans, going back to the 1970s.Read more > | | Investing | International Equity Tops Fund Flows in June | Net inflows to stock and bond mutual funds and
exchange-traded products (ETPs) totaled $8.5 billion in June. Long-term mutual
funds saw net outflows of $5.4 billion in aggregate during the month, while
ETPs experienced roughly $14 billion of net deposits, according to Strategic
Insight, an Asset International company. Investor demand in June was led by
international equity offerings, which attracted nearly $25 billion of net
inflows in total across funds and ETPs.Read more > | | Small Talk | ON
THIS DATE: In 1925,
schoolteacher John T. Scopes was convicted of violating Tennessee’s law against
teaching evolution in public schools. In 1930,
the Veterans Administration of the United States was established. In 1973, the
song “Soul Makossa” by the Paris-based Cameroonian artist Emmanual “Manu”
Dibango was the first disco song to enter the BillBoard Top 40. In 2002,
WorldCom Inc. filed for Chapter 11 bankruptcy protection. At the time it was
the largest bankruptcy in U.S. history. In 2011,
NASA’s space shuttle program completed its final, and 135th, mission, when the
shuttle Atlantis landed at Kennedy Space Center in Florida.
TUESDAY
TRIVIA: The first TV game show in America was “Truth or
Consequences,” which started as a show on NBC Radio. Contestants had a few
seconds to answer a trivia question correctly before a buzzer sounded. If the
contestant could not answer the question correctly, he or she had to complete
an embarrassing stunt.
| TRIVIAL PURSUITS: “Soul
Makossa” is said to be the first disco song to break the Top 40, but it is
better known as the inspiration for Michael Jackson’s chant in “Wanna Be
Startin’ Somethin”” The chant in “Soul Makossa” is “mama-ko, mama-sa,
maka-mako-sa.” What, if anything, does this mean?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 > |
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