Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 17th, 2016
Benefits & Administration
DC Plans Dominating Not-for-Profit Market
More than one-third (35%) of not-for-profit employees have access to a defined benefit (DB) pension, compared to 16% percent of for-profit workers, according to LIMRA Secure Retirement Institute (LIMRA SRI) data. However, the data reveals defined contribution (DC) plans are the most widely available retirement planning benefit even among non-profit employers.Read more >
Retiree Health Care Cost Estimates Reach Record Level
Couples retiring in 2016 can expect to spend $260,000 on health care in addition to long-term health coverage in retirement, according to research by Fidelity.Read more >
Cause for Optimism and Concern in DC Stats
While the decline of the DB pension paradigm is often maligned, new LIMRA Secure Retirement Institute research shows the DC system, at least for the for-profit private sector, is doing a decent job of picking up the slack.Read more >
MOST READ ARTICLES
1
2021 Recordkeeping Survey
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2021 Plan Sponsor of the Year
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TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
4
Most DB Plan Sponsors Seeking an Exit
5
DOL Proposes New Rule on ESG Investing in Retirement Plans
401(k)s Challenging the 3% Auto Enrollment Default Rate
As of year-end 2015, 38.2% of 401(k) plans with automatic enrollment are deferring 3% of participants’ salaries—but 29.0% are deferring 6%, T. Rowe Price found by analyzing its recordkeeping data. However, the average deferral rate for the plans that T. Rowe Price administers is 7%, well below the recommended 15%.Read more >
Products, Deals and People
Capital One launched Spark 401k, providing low-cost, all-exchange traded fund (ETF) 401(k) plans to small business owners and employees. Spark 401k is designed for businesses with fewer than 100 employees to deliver a retirement planning experience that offers the benefits available to larger companies.Read more >
Economic Events

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July after increasing 0.2% in June, according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.1% in July after increasing 0.2% in June.

Real average hourly earnings increased 0.4% in July, seasonally adjusted. Average hourly earnings increased 0.3%, and CPI-U was unchanged. Real average weekly earnings increased 0.6% over the month.

Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,211,000, the Census Bureau reported. This is 2.1% above the revised June estimate of 1,186,000 and is 5.6% above the July 2015 rate of 1,147,000. Single-family housing starts in July were at a rate of 770,000; this is 0.5% above the revised June figure of 766,000. The July rate for units in buildings with five units or more was 433,000.

Market Mirror

Tuesday, the Dow lost 84.03 points (0.45%) to finish at 18,552.02, the NASDAQ closed 34.90 points (0.66%) lower at 5,227.11, and the S&P 500 decreased 12.00 points (0.55%) to 2,178.15. The Russell 2000 was down 10.73 points (0.86%) at 1,231.13, and the Wilshire 5000 fell 137.55 points (0.61%) to 22,611.19.

On the NYSE, 3 billion shares changed hands, and on the NASDAQ, 2.7 billion shares traded, with declining issues outnumbering advancing issues more than 2 to 1 on both exchanges.

The price of the 10-year Treasury note was down 6/32, increasing its yield to 1.578%. The price of the 30-year Treasury bond decreased 8/32, bringing its yield up to 2.296%.

Compliance
An Alabama Circuit Court Judge granted final approval to a $310 million class action settlement that seeks to rectify a fraud committed against more than 20,000 individuals, entities and pension plans who owned stock in MedPartners, Inc., in the late 1990s. The plaintiffs serving as representatives of the class include the City of Birmingham Retirement and Relief System.Read more >
Ask the Experts
Ask the Experts – Beneficiary Rules for Non-ERISA Church Plans
“We are a denominational church plan that has not elected to be covered by the Employee Retirement Income Security Act (ERISA). A participant has remarried after his first wife died. He and the current wife signed a prenuptial agreement that said the balance of his 403(b) plan at the time of the marriage would go to his children from his first marriage in the event of his death; any accumulation afterward would belong to her. The plan provisions state that the spouse is the primary beneficiary unless he/she waives that right in writing. Is this agreement sufficient for the new wife to waive her rights to the 403(b) plan?”Read more >
Investing
The California Public Employees’ Retirement System (CalPERS) Board of Administration adopted the Environmental, Social, and Governance (ESG) 5-Year Strategic Plan, a six -point plan that is the next evolution of CalPERS’ work on sustainable investing and the Global Governance program.Read more >
Small Talk
This fall’s entering college students, the class of 2020, were generally born in 1998 and cannot remember a time when they had to wait for anything. They also can’t recall a time when the United States was not at war, or when someone named Bush or Clinton was not vying for a political office. Each August since 1998, Beloit College has released the Beloit College Mindset List, providing a look at the cultural touchstones that shape the lives of students about to enter college. Read more >

ON THIS DATE: In 1790, the capital of the U.S. moved to Philadelphia from New York City. In 1863, federal batteries and ships bombarded Fort Sumter in Charleston, South Carolina-harbor during the Civil War. In 1896, the Klondike gold rush was set off by George Carmack discovering gold on Rabbit Creek in Alaska. In 1903, Joseph Pulitzer donated a million dollars to Columbia University. This started the Pulitzer Prizes in his name. In 1915, Charles F. Kettering received a patent for the first electric ignition device. In 1961, the Communist East German government completed the construction of the Berlin Wall. 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 1982, the U.S. Senate approved an immigration bill that granted permanent resident status to illegal aliens who had arrived in the United States before 1977. In 1996, Ross Perot was announced to be the Reform Party’s presidential candidate. It was the party’s first-ever candidate. In 1998, NationsBank and BankAmerica merged to create the largest U.S. bank. In 2002, in Santa Rosa, California, the Charles M. Schulz Museum opened to the public.

WEDNESDAY WISDOM:“The only place success comes before work is in the dictionary.”Vince Lombardi, football player and coach

Share the good news with a friend! Pass the NewsDash 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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