Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 23rd, 2018
Benefits & Administration
Young Investors May Be Too Confident About Retirement
E*Trade released a report indicating that young investors, those between the ages of 18 and 34, may be overly confident about retirement. While 89% are either somewhat or very confident they will save enough to enjoy their retirement, 59% have taken an early withdrawal from their retirement account. And they generally think they will need to save half of what Baby Boomers think is needed to retire comfortably. Read more >
Americans Continue to Increase Retirement Savings
Twenty-eight percent of Americans say they are saving more this year compared to last year, a Bankrate.com survey found. This is nearly double the percentage increasing their retirement savings since the survey debuted in 2011, when 15% of Americans had done so. Those who did not increase their retirement savings cited stagnant income, other financial priorities, increased household expenses and an unexpected financial emergency as reasons. Read more >
Employees Feel Employers Should Help Pay Student Loan Debt
IonTuition finds more than half (52%) of survey respondents still owe more than $15,000 in student loans, and the year-over-year data shows the number of respondents with more than $30,000 in student loans actually increased over time compared to initial borrowing. Respondents feel strongly that employers should help their workers repay their student loan debt, the report highlights. Read more >
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Economic Events

Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors. The West was the only major region with an increase in sales last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7% to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5% below a year ago and have fallen on an annual basis for five straight months.

Market Mirror

Wednesday, the Dow closed 88.69 points (0.34%) lower at 25,733.60, the NASDAQ closed 29.92 points (0.38%) higher at 7,889.10, and the S&P 500 slipped 1.14 points (0.04%) to 2,861.82. The Russell 2000 increased by 4.50 points (0.26%) to 1,722.54, and the Wilshire 5000 was up 12.85 points (0.04%) at 29,889.96.

 

The price of the 10-year Treasury note was up 5/32, decreasing its yield to 2.814%. The price of the 30-year Treasury bond increased 8/32, bringing its yield down to 2.982%.

Compliance
Duke University Charged in Second 403(b) Plan Lawsuit
While the first lawsuit focused on excessive recordkeeping, administrative and investment fees, the new lawsuit focuses specifically on the university’s practices with regard to revenue sharing. Read more >
Investing
Is the Risk-Matching Precision of SMAs Worth the Cost and Complexity?
Recent Vanguard research explores the defined benefit (DB) plan risk-matching precision behind separately managed accounts (SMAs) and whether other investment vehicles, including collective investment trusts (CITs) and mutual funds, can equate that effectiveness. According to Brett Dutton, lead investment actuary and head of Vanguard’s Pension Strategy and Analysis team, there are common misconceptions with how SMAs are viewed. Considered as the “premier choice for liability hedging” because of its specific cash-flow timing, pension sponsors typically believe this precision will garner palpable results to funding status volatility. Yet, Dutton says these benefits are lower than sponsors anticipate, even marginal. Read more >
Small Talk

ON THIS DATE: In 1902, Fannie Merrit Farmer opened her cooking school, Miss Farmer’s School of Cookery, in Boston. In 1904, Hard D. Weed patented the grip-tread tire chain for cars. In 1939, Germany and the Soviet Union signed a non-aggression treaty. In 1959, in the Peanuts comic strip, Sally debuted as an infant. In 1962, the first live TV program was relayed between the U.S. and Europe through the U.S. Telstar satellite. In 1999, Robert Bogucki was rescued after getting lost in the Great Sandy Desert of Australia on July 11. During the 43-day ordeal Bogucki lost 44 pounds.

SURVEY SAYS: We covered a survey which found only 28% of Americans are saving more for retirement this year compared to last year. This week, I’d like to know, do you bump up your retirement savings each year, or does your employer do it for you? Also, if you do not increase your savings each year, why is that? You may respond to this survey by 6 p.m. Pacific time today. Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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