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NAPA Net Staff
By NAPA Net Staff | 3/29/2013
According to recent research by Hearts & Wallets, the best way for advice providers to build trust with clients is to help them to understand how they get paid. With over half of investors thinking that they’re getting ripped off and only 19% fully trusting their advisor — a number that’s down...
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By NAPA Net Staff | 3/28/2013
What’s the active/passive mix of 10 of the largest pension funds in America? P&I listed how each of the top plans spread their equity allocation. They range from a low of 16.5% passive for Texas Teachers, the sixth largest fund, to 93% passive for New York State’s Teachers Retirement System,...
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By NAPA Net Staff | 3/28/2013
Where’s the best place to buy an annuity? According to a report by Boston College’s Center for Retirement Research, the answer is the Social Security Administration. By delaying SS benefits, individuals receive a higher benefit and are in essence “buying” increased streams of incomes by paying...
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By NAPA Net Staff | 3/28/2013
The ICI reported that retirement assets grew to almost $20 trillion by the end of 2012, up 8.6% for 2012 and 7.9% since the pre-recession high. DC plans and IRAs, which held $5.4 and $5.1 trillion respectively, grew even faster — at 10.5% last year and 14% since their pre-recession highs....
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By NAPA Net Staff | 3/27/2013
On the heels of this week’s Stockton, CA, bankruptcy case, which was caused in large part by the city’s growing pension liabilities, there are reports that an Alameda county administrator will retire at 63 with an estimated $423,664 per year package. Along with her $301,000 annual salary, she will...
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By NAPA Net Staff | 3/27/2013
The recent news reported by P&I (free registration required) that $255 billion CalPERS is considering going all-passive highlights the trend toward index funds in pension and retirement plans as well as among individual investors. Recent developments — Fidelity offering 65 BlackRock ETFs...
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By NAPA Net Staff | 3/27/2013
Does daily valuation in DC plans limit investment choices and thereby investment returns? The UK division of Towers Watson makes the argument that although daily valuation offers obvious benefits, it limits exposure to less liquid investments like hedge funds, private equity, infrastructure and...
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By NAPA Net Staff | 3/27/2013
Three more in-depth accounts of the most popular sessions at the 2013 NAPA/ASPPA 401(k) Summit, held earlier this month in Las Vegas, have been posted on ASPPA’s website:• Legal Roundtable recap: Leading ERISA attorneys David Levine of Groom Law Group, Marcia S. Wagner of The Wagner Law Group and...
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By NAPA Net Staff | 3/26/2013
According to research by Aon Hewitt, about half of participants with account balances of less than $5,000 were forced out of their plans in 2011, up from just one-third of such participants in 2005. Plan sponsors are realizing that maintaining low account balances from terminated employees raises...
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By NAPA Net Staff | 3/26/2013
While not an apples-to-apples comparison for DC plans, it’s interesting to note that only 39% of advisors surveyed by Russell in their recently released quarterly report used investment policy statements for all their clients. While most used them, 21% of the advisors surveyed didn’t use investment...
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By NAPA Net Staff | 3/26/2013
Forbes columnist Deborah Jacobs argues that Roth IRAs should be curbed because they give outsized value to the super-rich while costing the government billions in tax revenue. Using the example of a serial Internet entrepreneur who put pre-IPO shares in a Roth IRA valued at $10 million on which he...
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By NAPA Net Staff | 3/26/2013
ERISA expert Fred Reish notes that the DOL recently levied a $1.266 million fine on an adviser providing fiduciary advice for a fee that also received 12b-1 fees from the mutual funds they recommended, claiming it was a prohibited transaction. The DOL, which is starting to get a better...
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By NAPA Net Staff | 3/25/2013
The New York Times reported on what could be a seminal trial brought by bond holders caught in the Stockton, CA Chapter 9 bankruptcy case who claim that retired workers should share the pain. As other states and municipalities face bloated pension payments many cannot afford, there should be a lot...
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By NAPA Net Staff | 3/25/2013
What’s the fastest-growing advisory channel? According to research by Cerulli involving 8,000 investors age 35-64 with over $100,000 in income, online firms are the leading channel, increasing AUM from $3.4 trillion in 2010 to $3.7 trillion in 2011.These brokerage firms, like Schwab and TD...
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By NAPA Net Staff | 3/25/2013
Will the recent deal to make 65 BlackRock ETFs available commission-free on Fidelity’s brokerage platform mean greater exposure for ETFs in 401(k) plans? According to Tom Lydon of ETF Trends and Nicole Seghetti of The Motley Fool, that may be the case. As the leader in the DC market, Fidelity can...
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By NAPA Net Staff | 3/22/2013
Highlights of our posts for the week of March 18 included:
Legal/Legislative
• The 9th U.S. Circuit Court of Appeals has affirmed Tibble v. Edison, a district court opinion that a plan sponsor was imprudent for including retail mutual funds without investigating the possibility of institutional...
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By NAPA Net Staff | 3/22/2013
By Stephen M. Saxon and George M. SepsakosOver the last few months, service providers to ERISA covered plans have been following developments in “error correction” practices and the troubling assertions made by DOL investigators throughout the country. DOL investigators are asserting that not only...
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By NAPA Net Staff | 3/22/2013
The 9th U.S. Circuit Court of Appeals has affirmed a district court opinion that a plan sponsor was imprudent for including retail mutual funds without investigating the possibility of institutional share classes. In Tibble v. Edison, the appeals court rejected the plan sponsor’s claim that it was...
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By NAPA Net Staff | 3/21/2013
In a Senate hearing held March 19 by Sens. Bill Nelson (D-FL) and Mike Enzi (R-WY) about allowing people who take out loans or hardship withdrawals to delay repayment until taxes are due, experts testified that fewer people were raiding their DC plans than ever and for less frivolous reasons....
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By NAPA Net Staff | 3/21/2013
With more focus on fees by plan sponsors and the industry as a whole, is it time for advisors to start considering collective investment trusts (CITs)? More popular in larger plans, the major benefit of CITs — lower fees — is muted for smaller plans. But the time may be right to consider them —...
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