Compliance March 24, 2009

GOP Congressmen Offer Savings Proposal

A group of Republican Congressmen have proposed a plan they say offers a shot in the arm for American savings.
Reported by
The Savings Recovery Act has been introduced by the House GOP’s Solutions Group for Savings Restoration – a group of Republican Congressmen led by U.S. House of Representatives Minority Leader John Boehner. According to an announcement, the proposal is designed to help Americans rebuild their retirement, college, and personal savings.
The blueprint includes:
  • Rebuilding Americans’ retirement savings by raising the contribution and catch-up limits for individuals and families.
  • Restoring college savings by extending the existing SAVERs Credit to contributions made to 529 college savings accounts, effectively reducing by up to half the cost of a family’s contribution to the plan.
  • Increasing retirement income by doubling the Social Security earnings limit from $14,160 to $28,320 and allowing more Americans to increase their income without being hit by the Social Security earnings penalty.
  • Providing tax relief for investors and seniors by immediately suspending the capital gains tax on newly acquired assets for the next two years, raising and indexing to inflation the amount of capital losses allowed against ordinary income to $10,000, and suspending taxes on dividend income through 2011.
  • Stabilizing worker pensions and helping employers invest in the future by temporarily providing an increased glide path for recognizing losses and two additional years to resolve pension funding shortfalls.
  • Preserving employee-controlled 401(k)s by blocking efforts to wipe out 401(k)s entirely and replace them with government-run accounts.
And, based on comments from the American Benefits Council, the bill also includes a three year extension of the current suspension of the required minimum distribution rules.
“Recent polling suggests that Americans’ concerns about their savings even trumps concerns about losing their jobs. Unfortunately, Washington Democrats have done nothing to address this savings crisis,’ noted House Minority Leader and Congressman John Boehner (D-Ohio) in an announcement. “In fact, Washington is pursuing policies that are causing Americans’ savings to evaporate more quickly, and some even advocate wiping out 401(k)s entirely and replacing them with government-run accounts. That’s unacceptable and not the solution Americans need at a time when they want to rebuild their retirement, college, and personal savings.’
In a statement the American Benefits Council said applauded the upcoming introduction of the Savings Recovery Act. “The Council believes that bold initiatives like this are critically needed to address the dire effects that the economic downturn has had on the retirement security of millions of Americans,’ said American Benefits Council President James A. Klein upon House of Representatives Minority Leader John Boehner’s (R-OH) preview of the bill.
The House GOP’s Solutions Group for Savings Restoration includes Rep. Howard P. “Buck’ McKeon (R-CA), Rep. John Kline (R-MN), Rep. Dave Camp (R-MI), Rep. Pat Tiberi (R-OH), Rep. Sam Johnson (R-TX), Rep. Ed Royce (R-CA), Rep. Michele Bachmann (R-MN), Rep. Lynn Jenkins (R-KS), Rep. Erik Paulsen (R-MN), Rep. Dean Heller (R-NV), Rep. Bob Latta (R-OH), and Rep. Brett Guthrie (R-KY).
More information on the House GOP’s solutions to restore Americans savings is available at http://gopleader.gov/savings/
Products March 24, 2009

Fidelity Reopens Two, Launches One

Fidelity Investments has announced plans to reopen two existing funds, and to open a third.
Reported by
According to the announcement, the Fidelity Diversified International Fund and Fidelity Small Cap Stock Fund will reopen to new investors and accounts, effective after 4:00 p.m. on March 30, 2009. The funds have been closed since October 2004 and June 2006, respectively.
Fidelity also announced that a new fund – Fidelity Global Commodity Stock Fund – will be available to individual investors and through advisors, effective March 31, 2009.
“We always evaluate whether to open or close funds on a case–by–case basis. In this instance, the funds share some common characteristics that prompted us to reopen both of them at this time,” said Walter C. Donovan, president, Equity Division, Fidelity Management & Research Company. “The vast majority of the assets invested in both funds – 93 percent for Diversified International Fund and 86 percent for Small Cap Stock Fund – are earmarked for retirement. In the normal course of investing, many shareholders have continued to redeem assets as they’ve met their financial goals. Since the funds have been closed, they have not been able to generate sufficient levels of new sales to offset current and future redemptions.”
“We believe reopening the funds will help bring some equilibrium to cash flows in order to ensure Bill and Andy can most effectively direct their investment strategies. It’s effectively the inverse of the reason why we limited new purchases of the funds over the past few years. At that time, we were seeing strengthening cash inflows, and we expected that trend to continue.”
  • The Fidelity Diversified International Fund, which seeks capital growth by investing primarily in the common stocks of non–U.S. companies, has been managed by William Bower since 2001.
  • The Fidelity Small Cap Stock Fund, which Fidelity says seeks long–term growth of capital by normally investing at least 80 percent of its assets in common stocks of companies with small market capitalizations, has been managed by Andrew Sassine since July 2008.
Fidelity also announced the launch of Fidelity Global Commodity Stock Fund, a new equity fund with retail and Advisor share classes. According to the announcement, the Fidelity Global Commodity Stock Fund will normally invest at least 80% of its assets in stocks of companies whose primary business is in energy, metals or agriculture, and will “seek capital appreciation and invest in securities issued anywhere in the world, including the United States,’ according to the firm. The new fund will be available to investors on March 31, 2009.
The new fund provides a global specialized option for investors looking to allocate a portion of their portfolio to stocks of companies in the energy, metals and agriculture
industries.
Fidelity notes that, “unlike pure commodity funds, which invest in commodity linked notes, futures or other derivative instruments, Global Commodity Stock Fund will invest across the universe of stocks in the energy, metals and agriculture industries.” The new fund will be managed by Joseph Wickwire, who also manages Fidelity Select Gold Portfolio and Fidelity Advisor Gold Fund. Prior to joining Fidelity in 2007, Wickwire spent 20 years at Evergreen Investments in Boston where his responsibilities have included managing a precious metals fund from 2004 until 2007 and serving as a director and analyst from 1999 until 2004, following the Canadian, Australian, and New Zealand equity markets as well as precious metal, base metal and paper industries.

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