Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 1st, 2016
Benefits & Administration
Even 403(b)s With Multiple Providers Can Improve Plans
Aside from provider consolidation, Rocaton Investment Advisors suggests steps 403(b) plan sponsors can take to improve participant outcomes.Read more >
Products, Deals and People
Retirement Industry People Moves
PGIM Appoints New Managing Director; New VP Joins Innovest Portfolio Solutions, and more.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about construction spending for June. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about factory orders for June. Friday, the Bureau of Labor Statistics will reveal the unemployment rate for July.
Deals and People
Voya Keeps Building Government Markets Team With Rehire
Housing Expenses Drive Spending Volatility in Retirement
Data and Research
Unplanned Financial Challenges Continue to Plague US Workers’ Retirement Savings
Market Mirror

Friday, the Dow closed 24.11 points (0.13%) lower at 18,432.24, the NASDAQ increased 7.15 points (0.14%) to 5,162.13, and the S&P 500 increased 3.49 points (0.16%) to 2,173.55. The Russell 2000 was up 2.62 points (0.22%) at 1,219.94, and the Wilshire 5000 closed 50.51 points (0.23%) higher at 22,547.92.

On the NYSE, 3.1 billion shares traded, with 1.6 advancing issues for every declining issue. On the NASDAQ, 2.7 billion shares changed hands, with a slight lead for decliners.

The price of the 10-year Treasury note increased 15/32, bringing its yield down to 1.457%. The price of the 30-year Treasury bond climbed 1 5/32, decreasing its yield to 2.184%.

WEEK’S WORTH: For the week ending July 29, the Dow lost 0.75%, the NASDAQ climbed 1.22%, and the S&P 500 was down 0.03%. The Russell 2000 finished 0.58% higher, and the Wilshire 5000 was up 0.05%.
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The Department of Labor (DOL) is offering $100,000 in grants to facilitate research into retirement plans for low-wage earners. The grants are being administered through the new Portable Retirement Benefits Planning grant program and are being overseen by the Women’s Bureau.Read more >
Regulators announced that State Street Bank and Trust Company agreed to pay a total of at least $382.4 million to settle a lawsuit alleging fraudulent foreign currency exchange charges. The settlement includes at least $60 million to Employee Retirement Income Security Act (ERISA) plan clients in an agreement with the DOL, to settle allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services.Read more >
9th Circuit Weighs In on Dignity Health’s Church Plan Status
The appellate court agreed with a lower court that the health provider’s pension plan did not fit the definition of ‘church plan’ under ERISA.Read more >
How the DOL Fiduciary Rule May Impact HSA Administration
Employers may be impacted by the rule if they provide to their employees information about health savings accounts (HSAs) that crosses the line from general investment education to investment advice, according to a paper from HSA Bank.Read more >
Investing Strategies for Pensions in the Current Environment
As to why the funded status of the average U.S. corporate pension plan has fallen 5% year to date, there are three key lessons that pension plan sponsors should heed, said Gordon Readey, fixed income product strategist at BlackRock, speaking during a webinar on “Navigating a Low-Rate, High-Volatility Environment.”Read more >
Small Talk
ON THIS DATE: In 1774, oxygen was isolated from air successfully by chemist Carl Wilhelm and scientist Joseph Priestly. In 1790, the first U.S. census was completed with a total population of 3,929,214 recorded. The areas included were the present states of Connecticut, Delaware, Georgia, Kentucky, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, North Carolina, South Carolina, Tennessee, Vermont and Virginia. In 1876, Colorado became the 38th state to join the United States. In 1893, shredded wheat was patented by Henry Perky and William Ford. In 1907, the U.S. Army established an aeronautical division that later became the U.S. Air Force. In 1956, the Social Security Act was amended to provide benefits to disabled workers ages 50 to 64 and disabled adult children. In 1993, Reggie Jackson was admitted into the Baseball Hall of Fame in Cooperstown, New York. In 1995, Westinghouse Electric Corporation announced a deal to buy CBS for $5.4 billion.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “Have rising health care costs affected your company’s decisions about its retirement plan, and what has your company done or not done with the retirement plan due to health benefits costs?” The majority (82.8%) said rising health care costs have not affected their company’s decisions about its retirement plan, while 17.2% said they have. Among those whose company has taken action with its retirement plan due to health benefits costs, 3.8% of respondents reported they have reduced employer match or discretionary contributions, and the same percentage said they have changed providers/advisers to lower costs. ‘Negotiated lower costs for plan services/investments’ was selected by 7.7% of respondents. Among those who chose ‘other,’ actions included changing the match to a ‘discretionary’ match based on company profits, not increasing the match as the company wanted to do and freezing pensions or selling certain pension assets to an insurance company. In verbatim comments, one reader noted that his/her company has made many of the changes listed in the survey, but did so because they were prudent things to do, not due to rising health care costs. Another reader suggested plan sponsors should work to reduce health benefit costs rather than reduce other benefits. Editor’s Choice goes to the reader who said, “So far health care costs have not affected our retirement plan decisions, but it may be just a matter of time.” A big thank you to all who participated in the survey!Read more >
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Editorial: Alison Cooke Mintzer


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