Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 17th, 2015
Compliance
Regulatory Change Brewing Beyond Fiduciary Rule
Nearly a full working week of hearings took place in Washington, D.C., at the headquarters of the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA), where experts dug deeply into the workings of the pending fiduciary rule update. It’s a critical debate for retirement plan service providers and plan sponsors, but fiduciary issues aren’t the only piece of rulemaking they should be concerned about. Beyond its own focus on fiduciary advice issues, the Securities and Exchange Commission (SEC) is in the process of implementing major money market fund reform provided for under rulemaking adopted in July 2014.Read more >
Contributions Owed to Union Plan Can Be Discharged
The 9th U.S. Circuit Court of Appeals has ruled that unpaid contributions to a multiemployer benefit plan are best classified as the contractual right to bring a claim against an employer for delinquent payment, and since a plan member employer has no control over such right, it is not considered a fiduciary under the Employee Retirement Income Security Act (ERISA) and likewise under the bankruptcy code. The appellate court held that the unpaid contributions could be discharged in bankruptcy.Read more >
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Products, Deals & People
Retirement Industry People Moves
Kravitz opens and staffs a new Chicago office; Chris Barrett joins Stadion as a regional vice president; and James Macey becomes co-lead on Franklin Templeton Allocation Funds and target-date fund (TDF) suite.Read more >
Economic Events

The Producer Price Index (PPI) for final demand advanced 0.2% in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices rose 0.4% in June and 0.5% in May. On an unadjusted basis, the final demand index moved down 0.8% for the 12 months ended in July, the sixth straight 12-month decline.

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing starts in July. Wednesday, the Bureau of Labor Statistics will reveal the consumer price index (CPI) for July. Thursday, the Labor Department will issue its initial claims report, and the National Association of Realtors will report about existing home sales for July.

Sponsored message from Charles Schwab
“The unique value of Target-Date Funds” from Charles Schwab Investment ManagementRead more >
Market Mirror

U.S. stock indices closed higher Friday as China’s currency stabilized and crude oil prices steadied, according to the Associated Press. The Dow added 69.15 points (0.40%) to finish at 17,477.40, the NASDAQ was up 14.68 points (0.29%) at 5,048.24, and the S&P 500 increased 7.66 points (0.37%) to 2,091.05. The Russell 2000 closed 7.94 points higher (0.66%) at 1,212.68, and the Wilshire 5000 gained 95.69 points (0.44%) to finish at 22,009.76.

On the NYSE, 3.2 billion shares traded, with a more than 2 to 1 lead for advancers. On the NASDAQ, 2.7 billion shares changed hands, with 1.5 advancing issues for every declining issue.

The price of the 10-year Treasury note slipped 4/32, increasing its yield to 2.199%. The price of the 30-year Treasury bond was up 12/32, decreasing its yield to 2.839%.

WEEK’S WORTH: For the week ending August 14, the Dow finished 0.60% higher, the NASDAQ was up 0.09%, and the S&P 500 gained 0.69%. The Russell 2000 increased 0.48%, and the Wilshire 5000 climbed 0.72%.

From the Magazine
The Fiduciary Regulation
On April 20, the U.S. Department of Labor (DOL) published in the Federal Register its re-proposed regulation on the definition of “fiduciary” under Section 3(21) of the Employee Retirement Income Security Act (ERISA). The proposal represents a seismic shift from the DOL’s longstanding approach to regulating companies in the retirement services industry.Read more >
Investing
Managing Participants’ Reactions to Volatility
With Greece declaring bankruptcy and the Chinese markets collapsing, market volatility has led to wild equity price swings in recent weeks. However, investment managers and strategists overwhelmingly urge retirement plan sponsors to ask their advisers to counsel participants to remain invested and level-headed.Read more >
Small Talk
ON THIS DATE: In 1790, the capital city of the U.S. moved to Philadelphia from New York City. In 1903, Joseph Pulitzer donated a million dollars to Columbia University, starting the Pulitzer Prizes in his name. In 1915, Charles F. Kettering, co-founder of Dayton Engineering Laboratories Company (DELCO) in Dayton, Ohio, was issued U.S. Patent No. 1,150,523 for his “engine-starting device”—the first electric ignition device for automobiles In 1969, the Woodstock music festival in upstate New York came to a close. In 1977, Florists Transworld Delivery (FTD) reported that in one day the number of orders for flowers to be delivered to Graceland had surpassed the number for any other event in the company’s history. Elvis Presley had died the day before. In 1998, NationsBank and BankAmerica merged to create the largest U.S. bank. In 2002, in Santa Rosa, California, the Charles M. Schulz Museum, named after the creator of the Peanuts comic strip, opened to the public.
Last week, I asked NewsDash readers, “Are you stuck in a prior decade?” I also asked readers if they feel younger than they are. The majority of responding readers (62.3%) indicated they are not stuck in a prior decade. Among those who are, the biggest proportion (15.9%) is stuck in the 80s. The vast majority of responding readers feel younger than they are, with 42.9% feeling up to 10 years younger and 40% feeling more than 10 years younger. Many of the readers who left comments said that while they are not totally stuck in another decade, there are aspects of prior decades they prefer. Others commenting about feeling younger than they are note that their bodies are not necessarily in agreement with their minds. I feel ya! Some point out that they feel younger… until their child or a Millennial coworker snaps them back into reality. To the commenter concerned that I was dissing my good friend about his 80s preferences, we joke about it together and each feel very blessed to have the other in our life. Editor’s Choice goes to the reader who said: “I only wish the bands from the 80’s and 90’s that are still touring would start their concerts at 6 pm instead of 8 pm. These late shows interfere with my bedtime and when I’m supposed to take my prescription medication.” A big thank-you to all who participated in the survey!Read more >
Share the good news with a friend! Pass the Dash along – and tell your friends/associates they can sign up for their own copy.Read more >

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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