Compliance May 29, 2013

Agencies Announce Relief for Tornado Victims

Regulators are offering relief for certain payment and filing deadlines for plan sponsors affected by the recent storms in Oklahoma.
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In OK-2013-3, the Internal Revenue Service (IRS) provided relief in connection with filing extensions for Form 5500 series returns as a result of the disaster for taxpayers who reside or have a business in the disaster area. In addition, the Pension Benefit Guaranty Corporation (PBGC) is waiving certain penalties and extending certain deadlines in response to the severe storms and tornadoes that began on May 18 in Oklahoma.  

Businesses in Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie counties that had tax filing deadlines that occurred starting May 18 will have until September 30 to file Form 5500 returns. More information is here.   

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If the plan administrator of a plan is a “Designated Person,” according to the PBGC definition, for purposes of assessing any late payment or late information penalty, the agency will treat as timely any premium filing required to be made for the plan beginning on or after May 18 and on or before September 30 if the filing is made by September 30. Thus, for any such filing, PBGC will waive the applicable penalty, but not the applicable interest charge.  

If the plan administrator of a plan that is terminating in a standard termination is a “Designated Person,” any of the plan termination deadlines for the plan that fall on or after May 18 and on or before September 30 are extended to September 30, 2013. If a “Designated Person” is responsible for filing a reportable event post-event notice for which the deadline falls on or after May 18 and on or before September 30, that person’s deadline for filing is extended to September 30.  

This Disaster Relief Announcement does not cover every situation in which PBGC disaster relief may be warranted, and the agency will consider requests on a case-by-case basis. Instructions for requesting relief can be found here.

Products May 29, 2013

Schwab Launches Addition to Advised Solutions

Charles Schwab brought out a dividend income-focused money management strategy from ThomasPartners for independent registered investment adviser (RIA) clients.
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In December, Schwab acquired ThomasPartners, in Wellesley, Massachusetts. The money management firm uses a growth-oriented investment portfolio to generate dividend income streams. The firm’s approach is equity investments in companies that, even in down markets, have consistently paid shareholders regular dividends and have generally grown those dividends year over year.

According to research conducted by ThomasPartners, stocks that grew or initiated a dividend had an annualized performance of 13% versus 7% for non-dividend payers between 1973 and 2012.

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Ninety percent of respondents to a Schwab survey conducted in April said that having consistent monthly income in retirement is very important, while 83% are interested in seeing their retirement income grow over time, and 78% said it’s very important that the value of their retirement portfolio increases over the long term. The ThomasPartners dividend growth strategy seeks to meet three goals for investors:

Dependable income every month;

Income growth every year; and

Capital appreciation over the years.

ThomasPartners provides a disciplined approach through diversified equity holdings to help mitigate the risk of overexposure to any specific asset category or industry. The strategy uses rigorous selection criteria and actively monitors and manages its portfolio holdings to maintain broad exposure to domestic and international common stocks across a range of equity asset categories.

 

10-Year Track Record 

As of March 31, ThomasPartners’ dividend portfolio has provided investors dividend income, dividend income growth and cumulative portfolio returns of 143% over the past 10 years.

“When I decided to retire, I knew I wanted two things from my investment strategy: dependable, regular income and the opportunity to grow annual income in pace with inflation,” said Gregory N. Thomas, senior vice president and chief investment strategist of ThomasPartners. “I found that typical strategies could deliver one or the other but not both.”

While 55% of respondents to Schwab’s survey said that dividend stocks or capital gains account for at least a portion of their retirement income plan, additional findings suggest that people don’t traditionally think about stock dividends as a retirement income strategy. Only 26% say that their broker or financial adviser has raised the topic of stock dividends as part of a retirement income plan, and just 14% of people have brought up this topic themselves.

According to ThomasPartners, the value of a dividend income growth strategy goes beyond retirement investing. The need for income, safety and growth becomes more pronounced as people approach retirement, but the approach of focusing on dividend-paying stocks may be appropriate for anyone looking for dependable income with the potential for less volatility through market swings, Thomas said.

Schwab’s survey also found that 89% of investors consider it very important to have an investment strategy in place to help guard against market volatility.

More information about the ThomasPartners dividend income strategy is here.

 

 

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