Investment returns in 2014 were modest and mixed and it appears 2015 may also deliver mixed returns but with a different cast than 2014. US stocks did reasonably well, though most of the returns were concentrated in larger capitalization stocks. The majority of the gains were delivered by a relatively few companies and a relatively few industries. Apple Computer and Biogen helped the larger capitalization indices such as the S&P 500 and the NASDAQ, but not so much Exxon-Mobil or Caterpillar. Smaller companies barely delivered middling single digit returns. This year’s modest mix appears to be changing. Newsletter 3-31-2015

On February 2, 2015, President Barack Obama released the Fiscal Year 2016 Budget of the U.S. Government that reflects a focus on raising overall government revenues. The prospective increase in revenue would create a range of new tax benefit programs, many of which would affect retirement savings for as many as 30 million Americans. According to the White House, as many as 78 million working Americans do not have a retirement savings plan at work and less than 10% of workers without workplace retirement plans contribute to an outside savings vehicle. The Obama administration believes, according to the budget, “The Nation needs to do more to help families save and give them better choices to reach a secure retirement.”¹ The budget laid out six key proposals that may affect retirement savings.  April 2015

Traditionally safe harbor contributions have been rather stringent in the sense that once adopted, there seemed to be little leeway allowing suspension or discontinuance. In 2014, the IRS issued new, final regulations of the requirements that need to be met to reduce or suspend a safe harbor contribution during a plan year. The new regulations are effective for plan years beginning on or after January 1, 2015. If the plan year is the calendar year, the new regulations apply now.

Under the new regulations, a safe harbor match or safe harbor non-elective contribution may be suspended or reduced midyear in two instances:  March 2015

Since June, oil prices have fallen to a six-year low, down over 50% from when Brent crude hit a 2014 high of $115 a barrel. Prices began their swoon mid-year as global supply outstripped global demand. The demand side of the equation weakened as a result of the economic woes of Europe and Asia, increased fuel efficiency and a trend toward alternative fuel sources. On the supply side, the largest variable has been increased U.S. production, up about 50% since 2008 and largely driven by a boom in shale production. Oil prices tumbled further in late November when the Organization of Petroleum Exporting Countries (OPEC) members decided not to curb production. Many observers believe OPEC has an agenda to drive marginal U.S. shale producers out of business by keeping prices low.  February 2015

As we enter the New Year, many qualified retirement plan sponsors use this time as an opportunity to examine current fiduciary structure and processes to ensure all is in order.

Whether or not your organization’s retirement plans have been recently audited by the Department of Labor and/or Internal Revenue Service, it is advisable to be sure your plans will hold up under such audit and/or plan participant scrutiny, and that the proper protections for the Company and its designated fiduciaries are in place.

When reviewing your current fiduciary structure, policies and procedures, we suggest the following considerations:  January 2015

“Headline News Causes Market Turmoil”! I guess that’s why they have headlines. As the New Year unfolds, the price of oil has dropped almost 50% from its peak 2014 price of over $110 a barrel. It’s presently under $50 a barrel. I say “presently” as even lower prices appear to be possible. The last time oil was anywhere near this price was back in early 2009. We were in the midst of a financial market meltdown as the world was in the midst of the worst recession since the Great Depression. We’re not in a recession anymore, at least not in the United States.  Newsletter 12-31-2014