Category Archives: Investing and fiduciary requirements

Employers post most jobs in four years

By  AP

August 7, 2012

WASHINGTON (AP) — U.S. employers posted the most job openings in four years in June, a positive sign that hiring might pick up.

The Labor Department said Tuesday job openings rose to a seasonally adjusted 3.8 million in June, up from 3.7 million in May. That’s the most since July 2008. Layoffs also fell.

The data follow Friday’s report that said employers in July added the most jobs in five months. A rise in openings could signal better hiring in the coming months. It typically takes one to three months to fill a job.

Even with the increase, hiring is competitive. There were 12.7 million unemployed people in June, or an average of 3.4 unemployed people for each job.

That’s down a bit from May and much lower than the nearly 7-to-1 ratio in July 2009, just after the recession ended. In a healthy job market, the ratio is usually around 2 to 1.

Still, employers have been slow to fill jobs. Since the recession ended in 2009, openings have increased 57 percent. Overall hiring is up only 19 percent.

And openings are still below pre-recession levels of about 5 million per month.

Employers added 163,000 jobs in July, the department said last week. That followed three months of weak hiring and eased concerns that the economy was stalling.

Yet the economy has generated an average of 150,000 jobs per month this year, about the same pace as 2011. That’s not enough to rapidly drive down the unemployment rate, which ticked up to 8.3 percent in July from 8.2 percent in June.

In June, manufacturing, education and health care, and hotels and restaurants all posted more openings. Retailers and state, local and federal government agencies cut available jobs.

The government’s monthly employment report, released last Friday, measures net hiring.

Tuesday’s report, known as the Job Openings and Labor Turnover survey, measures gross hiring. That fell in June from May to 4.36 million. But May’s total was the highest in three and a half years.

When layoffs, quits and other separations are subtracted, the net gain is close to the 64,000 net job gains in June.

Layoffs dropped to 1.8 million in June, down from nearly 2 million in May.

Fewer layoffs make it easier for the economy to generate net job gains. As layoffs decline, fewer gross hires are needed to produce a net gain in jobs.

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Some Plans Deny Pregnancy Coverage For Dependent Children

Kaiser Health News, By Michelle Andrews

Aug 06, 2012

The health care overhaul provides a safety net for young adult children, who can now stay on their parents’ health plans until they reach age 26. But it doesn’t guarantee that their parents’ plan will cover a common medical condition that many young women face: pregnancy.


Group health plans with 15 or more workers are required to provide maternity benefits for employees and their spouses under the Pregnancy Discrimination Act of 1978. But other dependents of employees aren’t covered by the law, so companies don’t have to provide maternity coverage for them.

Although hard numbers aren’t available on how many companies don’t provide dependent maternity benefits, “I would say it’s common,” says Dania Palanker, a senior health policy adviser at the National Women’s Law Center. And the number could grow with the recent expansion of coverage to children under age 26, she says.

Dan Priga, who heads the performance audit group for Mercer, a human resources consulting company, estimates that roughly 70 percent of companies that pay their employees’ health-care claims directly choose not to provide dependent maternity benefits.

In 2008, an estimated 2.8 million women ages 15 through 25 got pregnant, 12 percent of all those in this age group, according to researchers at the National Center for Health Statistics. (That is the most recent year for which there are pregnancy estimates.)

An Unwelcome Surprise

When Wendy Kline learned this spring that her 17-year-old daughter was four months pregnant, she took her to the doctor for prenatal care. Her insurer denied the claim, citing her employer’s policy not to cover maternity care for dependents.

“At that point my jaw hit the floor, because I did not know how we were going to pay for this,” Kline says.

Kline asked her company, a medical equipment retailer in Martinsburg, W.Va., to change its policy. But company officials turned the 26-year veteran employee down.

“You work all your life and pay these insurance premiums,” she says. “Then you ask for help and can’t get any. It’s just so unfair.”

In some states, a pregnant young woman might qualify for Medicaid, the federal-state health-care program for low-income individuals, even if she lived at home with her parents, say experts. But when Wendy and her husband, Andy, investigated, they were told that eligibility would be based on their household income, which was too high to qualify for Medicaid.

So far, their daughter’s pregnancy has been uneventful, and doctor visits and lab work have totaled $300. But the Klines know the big bills are yet to come. Andy recently took out a $2,000 loan from his 401(k) to put toward the hospital bill. It’s a start.

According to the March of Dimes, the average cost for uncomplicated maternity care was $10,652 in 2007. That includes prenatal care, a routine delivery and three months postpartum care.

In 2010, researchers at the Center for Business and Economic Research at Marshall University in Huntington, W.Va., published a report that analyzed the costs associated with providing mandatory maternity coverage for dependent minors in West Virginia.

Teenagers, the report noted, are less likely to get early prenatal care, more likely to smoke and less likely to gain enough weight during pregnancy. Thus, they’re more likely to deliver prematurely, resulting in more complications, including a higher incidence of low-birthweight babies. The medical costs for such an infant is nearly 10 times higher than for a baby of normal weight, the report found ($32,325 vs. $3,325), citing March of Dimes data from 2009. Similarly, getting prenatal care sooner rather than later saved as much as $3,200 in medical costs per person.

Ensuring that young women have access to prenatal care and other maternity services is “definitely cost-effective,” says Jennifer Price, a senior research associate at the center and the lead author of the study. “But it’s such a polarizing issue.”

‘A Basic Health Benefit’

The health-care overhaul provides assistance to some young women who become pregnant while on their parents’ plans. Under the law, preventive health benefits that are recommended by the U.S. Preventive Services Task Force, a federal agency, must be covered by new plans and by plans that have changed enough to lose their status of being grandfathered under the law. The recommended services include a range of screenings for pregnant women, including those for anemia, hepatitis B and Rh incompatibility.

In addition, starting this month, when a non-grandfathered health plan begins its new plan year, it must provide certain other women’s health services at no charge, including an annual well-woman visit, screening for gestational diabetes and breast-feeding support, supplies and counseling.

Starting in 2014, maternity and newborn care is one of 10 so-called essential health benefits that must be offered by all health plans in the individual and small-group markets, including those that are sold through the state-based health insurance exchanges that will be up and running then.

Large-group plans, however, are exempt from the requirement to provide the essential health benefits, now or in 2014.

But advocates say that companies and insurers should cover maternity care even if they’re not required to. “For young girls, this is a basic health benefit that they need,” says Debra Ness, president of the National Partnership for Women and Families. “Why would they deny them access to a health benefit that’s so essential?”

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U.S. Officials Brace for Huge Task of Operating Health Exchanges

By Published: August 4, 2012

WASHINGTON — Obama administration officials are getting ready to set up and operate new health insurance markets in about half the states, where local officials appear unwilling or unable to do so.

The markets, known as exchanges, are a centerpiece of President Obama’s health care law, and running them will be a herculean task that federal officials never expected to perform.

When Congress passed legislation to expand coverage two years ago, Mr. Obama and lawmakers assumed that every state would set up its own exchange, a place where people could shop for insurance and get subsidies to help defray the cost.

But with Republicans in many states resisting the creation of exchanges or deterred by the complexity of the task, federal officials are preparing to do the job, with or without assistance from state officials.

“We realize that not all states will be ready to establish these exchanges by 2014, so we are setting up a federally facilitated exchange in those states,” said Michael Hash, the top federal insurance regulator. “We are on track to go live in October 2013, which is the beginning of the first open season for the individual and small group markets.”

Governors of 13 states with nearly one-third of the United States population have sent letters to the Obama administration saying they intend to set up exchanges. Complete applications are due on Nov. 16, just 10 days after the presidential election.

Federal and state officials and health policy experts expect that the federal government will run the exchanges in about half of the 50 states — a huge undertaking, given the diversity of local insurance markets.

The federal exchanges will vary from state to state. The Obama administration will not define a single uniform set of “essential health benefits” that must be provided by all insurers, but will allow each state to specify the benefits within broad categories.

In running an exchange, federal officials face a delicate political task. They will encourage people to enroll, promoting the exchange as an important part of Mr. Obama’s health care overhaul. But they do not want to feed fears of a federal takeover or alienate state officials whose help they need.

Much work will be done by contractors. With public opinion deeply divided over the new law, the Obama administration has invited advertising agencies to devise an elaborate “outreach and education campaign” to publicize the federal exchanges and their potential benefits for consumers.

In addition, federal officials are looking for private contractors to provide “in-person assistance” to consumers and to operate call centers. A contractor will also help the government decide who gets federal subsidies, expected to average $6,000 a person, and who is exempt from the tax penalties that will be imposed on people who go without insurance.

Federal officials have turned to the American subsidiary of a Canadian company, the CGI Group, to provide information technology services to the federal exchanges under a contract that could be worth $93.7 million over five years.

An exchange is a sort of supermarket where people can compare prices and benefits of health plans offered by insurance companies. People will be able to file applications online, in person, by mail or by telephone.

Mr. Hash, the director of the federal Office of Health Reform, said the federal exchanges “will operate essentially in the same manner as the state-based exchanges.” However, they differ in a significant way. States have done their work in public, but planning for the federal exchanges has been done almost entirely behind closed doors.

“We have gotten little bits of information here and there about how the federal exchange might operate,” said Linda J. Sheppard, a senior official at the Kansas Insurance Department. “I was on a panel at Rockhurst University here, and I was asked, ‘Where is the Web site for the federal exchange?’ I chuckled. There really isn’t any federal exchange Web site.”

Sabrina Corlette, a research professor at the Health Policy Institute of Georgetown University, said the federal exchanges were “much more opaque” than the state exchanges.

The Board Institute Launches New Fiduciary Evaluation Tool

PHOENIX, June 1, 2012—The Board Institute, Inc., in collaboration with a consortium of leading fiduciary experts, has released The Fiduciary Board Index, which allows boards of directors to both assess the strengths of their investment policies and highlight areas for improvement. The content of this unique, new evaluation and education tool was developed in collaboration with fi360, CEFEX, and Cambridge Fiduciary Services, LLC. The new product complements the existing suite of board tools offered by The Board Institute.

The Fiduciary Board Index module provides an objective and convenient online tool to help boards evaluate their performance and understand the board’s duty in fulfilling their fiduciary responsibilities for managing employee retirement plan investments. The Index delivers benefits to all boards of directors with responsibility for oversight of employee retirement plan investments and their investment committees.

“Many investment committees for corporate retirement plans complain of ‘fiduciary fatigue,’” said Rich Lynch, COO of fi360. “Expanded funding requirements, increased ERISA regulation, disruption of the capital markets, a multitude of new investment products, and fiduciary breach litigation all serve to challenge even the most sophisticated institutions, thereby adding to their fiduciary burden. As a result, the need to measure and demonstrate sound investment practices, governance, and oversight has never been greater.”

“We are delighted to partner with these highly acclaimed authorities on fiduciary practices to bring this vital evaluation and education solution to corporations, so many of which are struggling with the volatility of their employee investments. In this highly uncertain economy, when accountability and transparency are essential, boards must be able to demonstrate their commitment to good practice,” said Susan Shultz, CEO of The Board Institute. “The Fiduciary Board Index provides important benefits to boards and their investment committees, while providing benchmarking and clarity of purpose.”

The Index helps companies demonstrate best practices in the face of increased media and shareholder focus on investment losses. It is completed anonymously by board members, and, at their discretion, those who work closely with the Investment Committee. It is built on a rich software engine and provides scores, variances, ranges of responses, best practices and individual comments to improve their investment fiduciary processes. The secure questionnaire takes 10 to 15 minutes to complete. Results are immediate, validated by leading survey experts and available on-line or in print.

“TBI has created a unique tool for boards to evaluate themselves and their committees. We are pleased to promote the service as it encourages firms to subsequently undertake thorough fiduciary assessments,” said Carlos Panksep, Managing Director of CEFEX. “We believe firms will find this an objective first step towards achieving fiduciary excellence in their retirement plans.”

“The Fiduciary Board Index module is easy-to-use and extremely thorough,” says Roger Levy, Principal at Cambridge, “The summary section of the report that gives the overall scores is very comprehensive. Our ability to see the variances in responses and the pop up boxes educating us about the best practices are tremendously insightful. The actionable report sets a positive and realistic tone and presents compelling reasons to make changes. It’s intelligent assessment information.”

About The Board Institute

The Board Institute’s customizable, easy to use evaluation and educational tools are developed in cooperation with leading governance experts and select partners, including the founder of 360 Degrees Feedback, the Foundation of Financial Executives Int’l, the Society for Corporate Secretaries and Governance Professionals, and the Director’s Network. Tools include The Board Index™, The Audit Committee Index™, The Compensation Committee Index™, The Governance Committee Index™ and The Director Index™. Reports provide scores, variances, ranges of responses, best practices, regulatory requirements and anonymous comments. They can be administered in-house or with the help of consultants. For more information about The Board Institute, please visit or contact 480-998-1081 or

About fi360

Fi360 offers a comprehensive approach to investment fiduciary education, practice management and support that has established them as the go-to source for investment fiduciary insights. With substantiated Practices as the foundation, fi360 offers world-class fiduciary Training/Education, Tools and Resources that are essential for fiduciaries and those who provide services to fiduciaries to effectively and successfully manage their roles and responsibilities. Fi360 assists those who rely on their fiduciary education programs, professional AIF® and AIFA® designations, Web-based analytical and reporting software and resources to achieve success. For more information about fi360, please visit or Twitter:@fi360.


CEFEX is an independent global assessment and certification organization. It works closely with investment fiduciaries and industry experts to provide comprehensive assessment programs to improve risk management for institutional and retail investors. CEFEX certification helps determine the trustworthiness of investment fiduciaries. As a certifying organization, CEFEX provides an independent recognition of a firm’s conformity to a defined Standard of Practice. It implies that a firm can demonstrate adherence to the industry’s best practices, and is positioned to earn the public’s trust. This registration serves investors who require assurance that their investments are being managed according to commonly accepted best practices. For more information about CEFEX, please visit

About Cambridge Fiduciary Services Group, Inc.

Cambridge Senior Executives have over 26+ years’ experience in asset management and in advising clients on fiduciary responsibility and establishing a prudent investment process. Having obtained designation as an Accredited Investment Fiduciary Analyst™ from fi360, founding members of Cambridge, Roger Levy and Ernest Liebre are equipped to perform both Fiduciary Checkups as well as formal assessments that can lead to CEFEX registration. For more information about Cambridge, please visit or contact or (480) 735-8200.

Posted on Jun 04, 2012 – 10:11 PM

Loan Defaults Sap $37B From 401(k)s Each Year

July 17, 2012 — Nearly two in 10 individuals, or 18.5%, have taken a loan from their 401(k) plan, Navigant Economics said in a policy brief. —

Roughly 10% of these loans default each year, draining $37 billion from 401(k) balances, Navigant said, citing 2005-08 data from the Financial Literacy Center. Many of these defaults, also known as 401(k) leakage, are due to a job loss, since upon leaving a company, a participant’s loan is due in full within 60 days, Navigant noted.

Given the fact that the unemployment rate averaged 4% during the 2005-08 time frame, and that it has since risen to 8%, 401(k) leakage has undoubtedly also gone up, said the authors of Navigant report, Dr. Hal Singer, managing director with Navigant Economics, and Dr. Robert Litan, a senior fellow in the economic studies program at the Brookings Institution.

“Of course, participants are not deliberately defaulting,” Litan said. “They only do so when they have no other option.”

Industry experts have suggested that the Department of Labor change 401(k) regulations to permit plan participants to port a loan to another retirement plan, or limit the number of size of 401(k) loans in the first place. Singer and Litan said another solution is automatically enroll 401(k) borrowers into loan protection insurance.

“There is growing literature on the ‘nudge’ value of default rates,” Singer said. “It has been shown, for instance, that individuals are more likely to contribute to their own 401(k) in the first instance if the default rule is automatic contribution with an opt-out rather than the previous opt-in system. The same logic implies that 401(k) borrowers would be more inclined to protect their loans against involuntary default.”

Lee Barney

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck