Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 22nd, 2017
Benefits & Administration
Including Student Loan Debt in Financial Wellness
Financial wellness is a hot topic in the employee benefits world, but it’s often hard to define and even harder to implement, notes Tom Woods, SVP of sales at Fidelity Investments. He tells PLANSPONSOR that providers are bundling different offerings to target specific challenges employees may be facing. One major area of focus for Fidelity is student debt, which currently stands at record levels. Moreover, studies show working adults are tapping into their retirement funds to pay for their children’s college expenses. “Five or 10 years ago, just talking about retirement was efficient,” Woods explains. “Now, employees want you to help with them with broader set of needs and in areas such as debt management and student loan repayment. Help on the front end of that so they’re not robbing their retirement.” Read more >
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New Lawsuit Highlights Importance of Cybersecurity for Retirement Plans
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IRS Releases 2019-2020 Priority Guidance Plan
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DC Plans 3.0 Will Really be Tailored to Individual Situations
Women's Finances Need to Be Studied Separately From Men's
Due to women getting married later, fewer women getting married and, among those who do marry, an increase in divorce, women are spending fewer years married overall, according to the Center for Retirement Research at Boston College. “If women as a group now spend about half of their adult years unmarried, it probably makes sense to explore their savings and investment behavior separately from men,” the center says. “This change has significant implications for financial planning. ” There is strong evidence to show that an individual’s marital status—especially an unexpected change in marital status—has a big impact on financial security over time. Read more >
Market Mirror

Yesterday, the Dow gained 29.24 points (0.13%) to finish at 21,703.75, the NASDAQ closed 3.40 points (0.05%) lower at 6,213.13, and the S&P 500 increased 2.82 points (0.12%) to 2,428.37. The Russell 2000 lost 0.89 points (0.07%) to finish at 1,356.90, and the Wilshire 5000 climbed 29.59 points (0.12%) to 25,137.40.

The price of the 10-year Treasury note was up 5/32, decreasing its yield to 2.180%. The price of the 30-year Treasury bond increased 8/32, bringing its yield to 2.765%.

Compliance
Non-Profit and Governmental Plan Sponsors Wanted for IRS Committee
The Internal Revenue Service has commenced the
application process for a limited number of open positions on the Advisory
Committee on Tax Exempt and Government Entities, which “provides a venue for
public input on relevant areas of tax administration.” Of particular interest
to 403(b) and 457 plan sponsors will be the two vacancies in the “Employee
Plans” division of the committee. IRS says it is seeking candidates with
“experience in federal, state and local governments” to help improve its
understanding and management of the tax-exempt retirement plan marketplace,
among other broader goals related to tax administration. Read more >
Investing
Most Multiemployer Pension Plans in Green Zone
Segal Consulting’s survey of more than 200 multiemployer pension plans with calendar year plans found that 65% are in the green zone, in terms of their funding status. On average, the plans are funded 87%. However, in 2008, just before the financial crisis, plans had an average funding status of 97%. Since then, multiemployer pension plans have done a good job of improving their funding status, Segal says. “The headlines that focus on financially troubled multiemployer pension plans miss the point that the majority are healthy,” says Diane Gleave, senior vice president and an actuary with Segal. Read more >
Should Policy Changes Matter More Than Manager Personnel Shifts in IPS
Often a fund manager personnel change serves as a trigger to put a fund on a watch list, but recent Morningstar research shows that, on average, there is generally speaking no appreciable change in future performance expectations following a fund-management change.  Investors commonly overreact and pull money from these funds, suggesting that the fund industry “handles succession planning far better than investors react to such changes.” When it comes to defined contribution plans, the analysis finds, this phenomenon is partly driven by the fact that plan sponsor decisionmaking is often tightly controlled by an investment policy statement (IPS) prescribing certain actions that must be taken when specific triggers are met. Read more >
Small Talk

ON THIS DATE: In 1776, General William Howe’s army arrived in Long Island hoping to capture New York City and gain control of the Hudson River, a victory that would divide the rebellious colonies in half.  In 1846, the U.S. annexed New Mexico. In 1851, the schooner America outraced the Aurora off the English coast to win a trophy that became known as the America’s Cup. In 1864, the International Red Cross was founded. In 1865, a patent for liquid soap was issued to William Sheppard. In 1906, the Victor Talking Machine Company of Camden, New Jersey, began to manufacture the Victrola. The hand-cranked unit, with horn cabinet, sold for $200. In 1932, the BBC (British Broadcasting Corporation) began its first TV broadcast in England. In 1950, officials of the United States Lawn Tennis Association (USLTA) accepted Althea Gibson into their annual championship at Forest Hills, New York, making her the first African-American player to compete in a U.S. national tennis competition. In 1989, Nolan Ryan of the Texas Rangers became the first pitcher in major league baseball history to register 5,000 career strikeouts. Ryan went on to rack up a total of 5,714 strikeouts, greater than 1,500 more than his closest competition.

 

TRIVIAL PURSUITS: At any given location, you can have up to three lunar eclipses per year, but some years there may be none. In any one calendar year, the maximum number of eclipses is four solar and three lunar.

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

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