Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 16th, 2018
Benefits & Administration
Public-Sector Pension Changes Create Residual Effects
A new Issue Brief publication from the Center for State and Local Government Excellence (SLGE) seeks to answer the broad and challenging question, “How Have Pension Cuts Affected Public Sector Competitiveness?” The analysis explores the impacts of public pension reform from 2005 to 2014, finding some statistically significant evidence that cuts to pension benefits have reduced the ability of public-sector employers to compete with private-sector employers for workers. As the organization points out, there is a growing need for states and localities to consider in detail how pension benefit reductions may impact public-worker recruitment and retention, and whether more analytical work can/should be done to further examine the workforce impacts of pension cuts. “Often lost in ongoing conversations about how to best improve the financial status of public pension systems is the important role these retirement programs fill as workforce management tools,” explains Joshua Franzel, president and CEO at SLGE. Read more >
Products, Deals and People
Retirement Industry People Moves
The Standard Adds Retirement Specialist to Denver Office; New Regional SVP for TPA Services at Pentegra; Industry Veteran to Serve as SVP and Sales Director at USICG; and more. Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about retail sales for March and business trade for February. Tomorrow, the Census Bureau will report about housing starts for March. Thursday, the Labor Department will issue its initial claims report.
MOST READ ARTICLES
1
AT&T Sued Over Calculation of Early Retirement Benefits
2
Congressional Leaders Want SECURE Act Passage in 2019
3
Social Security Administration Announced COLA for 2020
4
Could GE Have Continued Its DB Benefits?
5
Millennium Trust Helps Small Businesses Select a Retirement Plan
Market Mirror

Friday, the Dow closed 122.91 points (0.50%) lower at 24,360.14, the NASDAQ lost 33.60 points (0.47%) to end at 7,106.65, and the S&P 500 gave up 7.69 points (0.29%) to end at 2,656.30. The Russell 2000 lost 7.82 points (0.50%) to finish at 1,549.51, and the Wilshire 5000 gave up 98.86 points (0.36%) to close at 27,559.95.

 

The price of the 10-year Treasury note was up 5.32, decreasing its yield to 2.821%. The price of the 30-year Treasury bond increased 11/32, bringing its yield down to 3.028.

 

WEEK’S WORTH: For the week ending April 13, the Dow was up 1.79%, the NASDAQ climbed 2.77%, and the S&P 500 finished 1.99% higher. The Russell 2000 gained 2.39%, and the Wilshire 5000 increased 1.89%.

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Compliance
IRS Approves Wagner Law’s Volume Submitter DB Pension Plan
The Internal Revenue Service (IRS) has approved The Wagner Law Group’s volume submitter defined benefit (DB) pension plan. Such a plan is built on a pre-approved document that has an IRS advisory letter on which adopters of the plan can rely with respect to the form of the document, including various options that have been subject to comprehensive IRS review. Read more >
Investing
Cerulli Report Maps LDI and OCIO Opportunities
The latest report published by Cerulli Associates seeks to develop a working definition of “custom institutional investing solutions.” “True institutional custom solutions are a relatively new phenomenon in the modern history of asset management and there remains a great deal of debate in the industry regarding what constitutes a custom solution,” says Christopher Mason, senior analyst at Cerulli. The framework established by Cerulli researchers suggests the “custom institutional solution” label is appropriate for “any strategy managed for an institution characterized by the major functions of liability-driven investing (LDI), multi-asset-class solutions, outsourced chief investment officer, and pension risk transfer or pension settlement transactions.” Read more >
Small Talk

ON THIS DATE: In 1947, multimillionaire and financier Bernard Baruch, in a speech given during the unveiling of his portrait in the South Carolina House of Representatives, coined the term “Cold War” to describe relations between the United States and the Soviet Union. In 1972, from Cape Canaveral, Florida, Apollo 16, the fifth of six U.S. lunar landing missions, was successfully launched on its 238,000-mile journey to the moon. In 1972, in an effort to help blunt the ongoing North Vietnamese Nguyen Hue Offensive, the United States resumed bombing of Hanoi and Haiphong after a four-year lull. In 1977, David Soul’s smash-hit single “Don’t Give Up On Us Baby” reached the top of the U.S. pop charts. In 2007, in one of the deadliest mass shootings in U.S. history, 32 people died after being gunned down on the campus of Virginia Tech by Seung Hui Cho, a student at the college who later committed suicide.

SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “Does your firm/adviser perform peer benchmarking to see how your plan stacks up to others, and what would you like to know about your peer plan sponsors?” Among all respondents, 73.1% indicated their company or plan adviser performs peer benchmarking to see how their retirement plan stacks up to others, while 15.4% said they do not and 11.5% don’t know. Asked what information they would like to know about their peer plans, plan design features, fees, participation rates and average deferral rates were common answers. But there were some not so common answers, such as, “I question whether the peer results can be skewed to achieve desired results.” Among readers who left comments, many pointed out the benefits of peer benchmarking—to make sure the plan is competitive, to potentially reduce plan costs and to get new ideas for their plans, as well as others. A couple of respondents noted that beer benchmarking does not show plan sponsors everything they need to know. Editor’s Choice goes to the reader who said: “As a retention tool the plan has to be comparable to my competition, relatively simple to administer and yet still fit in my budget. I feel benchmarking should help me determine each of these items.” Thanks to all who participated in our survey! Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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