Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
April 2nd, 2019

Lessons From 403(b)s When It Comes to LDI in DC Plans

The analog of defined benefit liability-driven investing on the defined contribution plan side is the discussion of in-plan guaranteed retirement income. Read more >
Benefits & Administration
401(k)s Have Made Significant Progress in Improving Participant Outcomes
In honor of National Employee Benefits Day, Jason Grantz, with Unified Trust, discusses the progress made in the 401(k) industry and the future focus. Read more >
Estimates for Health Care Costs in Retirement Continue to Rise
A 65-year old couple retiring in 2019 can expect to spend $285,000 in health care and medical expenses throughout retirement, Fidelity estimates, but it says it is possible to save for retirement health costs via health savings accounts. Read more >
Fewer Multiemployer Pension Plans Receive Sufficient Contributions
The Society of Actuaries also found the average plan spends more to fund its unfunded liability than to fund current benefit accruals, and it costs most per current active participant to pay off a plan’s unfunded liability. Read more >
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Principal Pledges Seamless Transition for Wells Fargo Recordkeeping Clients
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Study Suggests Reasons Most Physical Wellness Programs Don’t Work
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Lowe’s Defense Fails to Get ERISA Suit Dismissed
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Schwab Arbitration Ruling Leaves Unanswered Questions
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Employer Health Benefit Costs to Rise 6.5% in 2020
Plan Sponsors Actively Evaluating, Changing TDFs
Concerns about turning current savings into retirement income jumped significantly year-over-year, according to BlackRock’s 2019 DC Pulse Survey of more than 1,000 defined contribution (DC) plan participants and some 200-plus plan sponsors. When it comes to the critical task of turning savings into retirement income, six in 10 workers (62%) are worried, up 14 percentage points from last year, according to a report summarizing the survey. BlackRock also found four in 10 DC plan sponsors say they have changed or added target-date funds (TDFs) in the past 12 months. Read more >
PLANSPONSOR Awards
General Health System
An expanded profile is now available for PLANSPONSOR’s Plan Sponsor of the Year award winner in the Nonprofit <$250MM category. Read more >
Intermountain Power Service Corp
An expanded profile is now available for PLANSPONSOR’s Plan Sponsor of the Year award winner in the Nonprofit >$250MM category. Read more >
Economic Events

Advance estimates of U.S. retail and food services sales for February, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $506.0 billion, a decrease of 0.2% from the previous month, but 2.2% above February 2018, the Census Bureau reported. Total sales for the December 2018 through February 2019 period were up 2.2% from the same period a year ago. The December 2018 to January 2019 percent change was revised from up 0.2% to up 0.7%. Retail trade sales were down 0.2% from January, but 2.1% above last year. Nonstore retailers were up 10.0% from February 2018, while health and personal care stores were up 5.9% from last year.

 

The combined value of distributive trade sales and manufacturers’ shipments for January, adjusted for seasonal and trading day differences but not for price changes, was estimated at $1,449.6 billion, up 0.3% from December 2018 and up 2.8% from January 2018.

 

Construction spending during February was estimated at a seasonally adjusted annual rate of $1,320.3 billion, 1.0% above the revised January estimate of $1,307.3 billion. The February figure is 1.1% above the February 2018 estimate of $1,305.5 billion. During the first two months of this year, construction spending amounted to $181.9 billion, 1.4% above the $179.4 billion for the same period in 2018.

Market Mirror

Yesterday, the Dow gained 329.74 points (1.27%) to finish at 26,258.42, the NASDAQ closed 99.59 points (1.29%) higher at 7,828.91, and the S&P 500 increased 32.79 points (1.16%) to 2,867.19. The Russell 2000 was up 16.33 points (1.06%) at 1,556.06, and the Wilshire 5000 climbed 340.55 points (1.16%) to 29,607.46.

 

The price of the 10-year Treasury note decreased 27/32, bringing its yield up to 2.503%. The price of the 30-year Treasury bond fell 1 19/32, increasing its yield to 2.892%.

Compliance
Court Says DOL Overstepped Boundary with AHP Regulations
Last June, the Department of Labor (DOL) finalized regulations to expand the opportunity to offer employment-based health insurance to small businesses through small business health plans, also known as association health plans (AHPs). According to DOL leadership, the regulations were designed to give small employers a greater ability to join together and gain many of the advantages enjoyed by large employers in the provision of health insurance to employees. However, a new court ruling, responding to lawsuits filed by 11 states and the District of Columbia, has determined that the DOL overstepped its authority in crafting the new regulations. Read more >
Great-West Appellate Court Ruling Clarifies Duties of ‘Parties in Interest’
The appellate court decision tests the Employee Retirement Income Security Act’s (ERISA)’s restrictions on transactions between fiduciaries and non-fiduciary third parties, referred to as “parties in interest.” Read more >
Industry Voices
Barry’s Pickings: Retiree Lump Sums—a (Non-Hysterical) User’s Guide
Michael Barry, president of O3 Plan Advisory Services LLC, discusses when taking a lump-sum payment instead of continuing an annuity is—and is not—a good idea for retirees. Read more >
Small Talk

ON THIS DATE: In 1513, Spanish explorer Juan Ponce de Leon sighted what was to be Florida. The next day he went ashore. In 1865, Confederate President Jefferson Davis and most of his Cabinet fled the Confederate capital of Richmond, Virginia. In 1877, the first Egg Roll was held on the grounds of the White House. In 1889, Charles Hall patented aluminum. In 1902, the first motion picture theatre opened in Los Angeles with the name Electric Theatre. In 1914, the U.S. Federal Reserve Board announced plans to divide the country into 12 districts. In 1917, President Woodrow Wilson presented a declaration of war against Germany to Congress. In 1951, U.S. General Dwight Eisenhower assumed command of all allied forces in the Western Mediterranean area and Europe. In 1958, the National Advisory Council on Aeronautics was renamed NASA. In 1963, Reverend Dr. Martin Luther King began the first non-violent campaign in Birmingham, Alabama. In 1985, the NCAA Rules Committee adopted the 45-second shot clock for men’s basketball to begin in the 1986 season. In 1987, the speed limit on U.S. interstate highways was increased to 65 miles per hour in limited areas. In 2014, the U.S. Supreme Court ruled that limits on the total amount of money individuals can give political candidates and political action committees were unconstitutional.

TRIVIAL PURSUITS: From where did the word “mortgage” come? Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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