Products December 21, 2011

Mercer Paper Discusses Impact of Attention on Fees

Heightened scrutiny of retirement plan fees may impact how fees are charged and allocated to participants.
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The paper, “Fee Allocation: Trends and Strategy,” says the recent focus on fees has fostered a movement away from an asset-based approach for calculating administrative fees to a per-capita approach. Mercer contends that soon plan sponsors and participants will be questioning whether it makes sense for higher-balance retirement plan participants to pay more in fees than those with lower balances when it costs the same to administer large or small accounts.  

It details examples of asset-based versus per-capita-based fee allocations, and suggests alternative allocation methods.  

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The report includes a list of steps plan fiduciaries can take to help ensure they are fulfilling their responsibilities to participants as well as minimizing their own fiduciary risk.  

A copy of the paper is available at http://www.mercer.com/articles/1435350.

Products December 21, 2011

Dow Jones and UBS Securities Launch Index

Dow Jones Indexes and UBS Securities LLC launched the Dow Jones-UBS Commodity Index 2-4-6 Forward Blend.  
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The new index is a gauge that measures diversified exposure to longer-dated commodity futures contracts spread across the commodity price curve.

An enhanced version of the Dow Jones-UBS Commodity Index, the Dow Jones-UBS Commodity Index 2-4-6 Forward Blend reflects the return of underlying commodity futures price movements. Also introduced was a total return version of the index, which reflects the return on fully collateralized futures positions.

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The index is constructed as an equally weighted basket of the two-month, four-month and six-month forward versions of the Dow Jones-UBS Commodity Index, with the notional exposure to the three component indexes rebalanced at the end of every month so that each index represents one-third of the basket. The index is quoted in USD.

“This new gauge is a welcome addition to the Dow Jones-UBS Commodity Index family,” said Michael A. Petronella, president, Dow Jones Indexes. “The Dow Jones-UBS Commodity Index 2-4-6 Forward Blend tracks diversified exposure across a range of longer-dated commodity contracts—a measure growing in importance for this asset class.” 

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