Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 25th, 2017
Benefits & Administration
403(b) Plans Improving Plan Design
In a survey of 608 non-profit organizations conducted by the Plan Sponsor Council of America (PSCA), the council found these non-profits are making improvements to their 403(b) plans, particularly with respect to auto-plan features. Twenty-one percent of 403(b) plans now automatically enroll their participants, up from 19% in 2016 and 16.2% in 2014. Among the 21% of plans that automatically enroll participants, 52% pair that with automatic escalation, up from 43% in 2015.
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Thirty-Eight Percent of Workers Do Not Participate in Their Retirement Plan
Eighteen percent of workers reduced their 401(k) contributions and/or personal savings in the past year, CareerBuilder found in a survey. Thirty-eight percent do not participate in a 401(k) plan, individual retirement account (IRA) or any other type of retirement plan. Twenty-six percent did not set aside any savings during the last year. One-quarter of workers said they were not able to make ends meet each month in the past year, and 20% have missed some payments. 
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Products, Deals and People
Investment Products and Services Launches
Vanguard Establishes Total Corporate Bond ETF and Capstone Financial Launches New Crossmark Global Investments Brand
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MOST READ ARTICLES
1
Adidas Sued Over Excessive Fees for 401(k) Participants
2
(b)lines Ask the Experts – Proper Delivery Method for SPDs
3
Yale Sued Over Wellness Program ‘Penalty’
4
Employees in Two States Miss Out on One HSA Benefit
5
Some Help for Women’s Retirement Savings Gap May Be Coming
Market Mirror

Yesterday, the Dow dropped 28.69 points (0.13%) to finish at 21,783.40, the NASDAQ closed 7.08 points (0.11%) lower at 6,271.33, and the S&P 500 decreased 5.07 points (0.21%) to 2,438.97. The Russell 2000 gained 4.14 points (0.30%) to finish at 1,373.87, and the Wilshire 5000 declined 35.75 points (0.14%) to 25,283.88.

The price of the 10-year Treasury note decreased 9/32, increasing its yield to 2.197%. The price of the 30-year Treasury bond decreased 15/32, bringing its yield up to 2.770%.

Compliance
Combating Common and Unfamiliar Fiduciary Mishaps
Deferral failures and incorrect vesting aren’t the only oversights sponsors should be wary of; many other fiduciary snares can trip them up. Lori Lucas, executive vice president and defined contribution (DC) practice leader at Callan Associates, emphasizes the chance of errors in recordkeeper monitoring and evaluation, plan fee reviews, adherence to the investment policy statement (IPS), picking fund lineup options, and more. Lucas shares this list in her recent article, “Avoiding Fiduciary Traps: 8 Tips for DC Plan Sponsors.” The analysis, stemming from results of Callan’s 2017 DC Trends Survey, stresses a need for broad education surrounding plan sponsors’ roles as fiduciaries. 
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Investing
Should Retirement Investors Shun Equity?
A new analysis from Hendrik Bessembinder, a researcher with the Department of Finance at the W.P. Carey School of Business at the Arizona State University, makes the surprising claim that most common stocks over the long-term fail to outperform one-month Treasury bills—but the real lesson is about diversification, not dumping stocks. At a time when asset managers and retirement plan consultants are generally urging investors to be willing to take on equity risk to address muted long-term return forecasts, Bessembinder suggests many stock investments can be expected to underperform short-term Treasuries.
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Public Pension Plan Funded Status Slowly Improves
Strong investment returns during the second quarter improved the funded status of the country’s 100 largest public defined benefit (DB) plans by $33 billion, according to research by global consulting and actuarial firm Milliman.  According to the second quarter results of its Public Pension Funding Index (PPFI), this drove the funded ratio of these plans from 72.0% at the end of March to 73.0% as of June 30, 2017. Investment returns were 3.06% in aggregate. The second quarter also saw four more Milliman 100 plans cross the 90% funded mark. 
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Small Talk

How Will Geography Affect Your Nest Egg? You’re in luck if you retire today in Mississippi, where your dollar will last the longest amount of time in retirement, according to a GOBankingRates study. Average total annual expenses including groceries, housing, and healthcare cost $37,964 in Mississippi. On the opposite end is Hawaii, where annual expenses are $83,834. According to the study, here is how a $1 million nest egg would break down. The states where your dollar will last the longest are: Mississippi ($1 million will last 26 years, 4 months); Arkansas (25 years, 6 months); Oklahoma (25 years, 2 months); Michigan and Tennessee (25 years for each state). The nest egg would be gone the fastest in these five states: Hawaii ($1 million will last: 11 years, 11 months); California  ( 16 years, 5 months); Alaska (17 years); New York (17 years, 1 month); Massachusetts (17 years, 4 months).

 

ON THIS DATE: In 1718, Hundreds of colonists from France arrived in Louisiana. Some settled in present-day New Orleans. In 1814, the U.S. Library of Congress was destroyed by British forces. In 1875, Captain Matthew Webb swam from Dover, England, to Calais, France making him the first person to swim the English Channel. The feat took about 22 hours. In 1916, The National Park Service was established as part of the U.S. Department of the Interior. In 1920, Ethelda Bleibtrey won the 100-meter freestyle swimming competition in Antwerp, Belgium. She was the first woman to win an Olympic competition for the U.S. In 1920, the first airplane to fly from New York to Alaska arrived in Nome. In 1921, the U.S. signed a peace treaty with Germany. In 1939, the movie “Wizard of Oz” opened around the United States. In 1941, U.S. President Franklin Roosevelt signed the bill appropriating funds for construction of the Pentagon. In 1944, Paris, France, was liberated by Allied forces ending four years of German occupation. In 1949, NBC Radio debuted “Father Knows Best.” The show went to TV in 1954. In 1950, U.S. President Truman ordered the seizure of U.S. railroads to avert a strike. In 1972, computerized axial tomography (CT) scan was introduced in Great Britain. In 1981, the U.S. Voyager 2 sent back pictures and data about Saturn. The craft came within 63,000 miles of the planet. In 1988, Iran and Iraq began talks in Geneva after ending their eight years of war. In 1990, military action was authorized by the United Nations to enforce the trade embargo that had been placed on Iraq after their invasion of Kuwait. In 1991, Byelorussia declared independence from the Soviet Union. In 1992, it was reported by researchers that cigarette smoking significantly increased the risk of developing cataracts. In 1997, the tobacco industry agreed to an $11.3 billion settlement with the state of Florida.

 

And now it’s time for FRIDAY FILES! But first, let’s revisit ECLIPSE 2017. After all, we couldn’t end the week without commenting on the event that captivated so much of the nation this week.

Popular Science compiled a list of the best photos of the 2017 eclipse:
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Don’t miss the international space station photobombing this eclipse picture:  Read more >
And this Smarter Every Day video lets you watch the international space station make a transit of the sun during the partial eclipse.  Read more >
In case you’d like to start planning your trip, here is a list of the best cities to see the next total solar eclipse in 2024:  Read more >

In Worcester, Massachusetts, 59-year-old Donald Pagan was attending a street festival in the city and tried to walk in a column of police horses when officers asked him to stop, Reuters reports. “Pagan stepped to the side of the horse and got into an aggressive posture by quickly raising his fist in an attempt to punch the horse in the face,” police said in a statement. “The horse instinctively jumped back and away from the male which caused a hazard to Mr. Pagan, the officer and to the horse.” Pagan was charged with assault and battery on a police officer, resisting arrest and interfering with a police horse, the news report said. 

In Epping, New Hampshire, 61-year-old Leslie Kahn became stranded in her pool when the ladder broke, and she was unable to pull herself out of the pool. No one was home and her cellphone was inside her house, but her iPad was on a chair near the pool. After using a pool pole to drag the chair close to her, she logged onto Facebook, labeling a message “911” asking for help. The message did catch people’s attention, and soon came over a woman who lived nearby, followed by police and a neighbor, the AP reported.

In New York, there are two newly wealthy cats, Troy and Tiger, who just inherited $300,000. Their owner, Ellen Frey-Wouters, died at age 88 without any heirs to her $3 million estate, which has been divided between a couple of health care aides, charities and her attorney, according to news reports. In her will, Frey-Wouters has asked the money be kept in a trust fund and used to ensure her pets would be “lovingly” cared for by her former health aides and never caged. Once the cats die, whatever is left in their fund will go to Frey-Wouters sister.

In Oakdale, NewYork, 21-year-old Dillon Garcia was pulled over on the Sunrise Highway. Garcia, it turns out, is likely no stranger to traffic court, as the AP reports his driver’s license has been suspended 81 times.

In Tokyo, Japan, at the Life Ending Industry Expo—a funeral industry fair—a company has programmed a robot to perform as a Buddhist priest for hire at funerals. When programmed with particular software by Nissei Eco Co., the humanoid robot from SoftBank named “Pepper” can chant sutras in a computerized voice while tapping a drum. For those struggling with the cost of a traditional funeral, Pepper may be a cost effienct option, at less at 50,000 yen (about $450) per funeral compared to more than 240,000 yen ($2,200) for a human priest.

Share the 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

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

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