Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 26th, 2016
Benefits & Administration
Half of Workers Plan to Work Past Age 65
Fifty-four percent of workers plan to work past the age of 65, according to the Transamerica Center for Retirement Studies, and of this group, 13% do not expect to retire. More than half, 51%, of workers’ biggest retirement fear is outliving their savings, and the same amount plan to work after they retire (38% who plan to work part time and 13% plan to work full time). For almost one-third of those who plan to work after they retire, the reason why is that they won’t be able to afford to retire. Forty-eight percent of workers plan to stay with their current employer while transitioning into retirement, and 72% either strongly or somewhat agree that their current employer is supportive of people working past age 65 (28% strongly agree and 44% somewhat agree).Read more >
Lowest-Earning Households Have Dimmest Retirement Prospects
The Center for Retirement Research at Boston College looked at the retirement preparedness of households in various socioeconomic groups and found that those in the lowest quartile are more likely to be unprepared for retirement at any given age than are those in the upper quartile. However, the difference between percentages of households unprepared decreases with workers’ age. Although at age 60, 95% of those in the lowest quartile are unprepared, compared to 86% of those in the highest quartile, at age 70, the groups are nearly even, at 22% versus 21%. Read more >
MOST READ ARTICLES
1
New Financial Audit Rule Increases Requirements for Plan Sponsors
2
2021 Recordkeeping Survey
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Participants Missing the Full Match Remains a Big Problem
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TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
5
2021 Participant Survey
Products, Deals and People
Investment Products and Service
Schwab Reveals 8-bps Passive TDF with No Minimum; MetLife Stable Value Solutions Fund Added to Modelxchange. Read more >
MassMutual Launches Customer Experience Management Software
MassMutual has selected Medallia, a producer of Customer Experience Management (CEM) software, to build a new customer feedback and response program. Using the new platform, MassMutual employees will be able to gather, analyze and act on client feedback in real time. MassMutual says the system will regularly connect with its 35,000 retirement plan sponsors, three million participants and more than 5,100 advisers and third party administrators (TPA)s to gather feedback.Read more >
Market Mirror
Yesterday, the Dow closed down 33.07 points (0.18%) at 18,448.41, the NASDAQ lost 5.49 points (0.11%) to finish at 5,212.20, and the S&P 500 was down 2.97 points (0.14%) at 2,172.47. The Russell 2000 gained 2.76 points (0.22%) to 1,240.00, and the Wilshire 5000 dropped 11.84 points (0.05%) to 22,580.37.

On the NYSE, 3 billion shares traded, with advancing issues leading declining issues. On the NASDAQ, 2.6 billion shares changed hands, with a slight lead of advancing issues.

The price of the 10-year Treasury note decreased 4/32, bringing its yield to 1.576%. The price of the 30-year Treasury bond dropped 13/32, increasing its yield to 2.268%. 

Compliance
IRS Raises 2017 HSA Contribution Limits for Individuals
The Internal Revenue Service (IRS) has announced the 2017 limits for health savings account (HSA) contributions and the minimum deductible amounts and maximum out-of-pocket expenses for high-deductible health plans (HDHPs). The 2017 contribution limits, indexed annually to adjust for inflation, will be $3,400 for individuals, a $50 increase and $6,750 for families, unchanged from 2016.  Read more >
DOL Releases Final Rule on State-Run IRAs
The Department of Labor (DOL) today released its final ruling on state-run individual retirement accounts (IRA)s. The new rule is designed to assist states that have already enacted laws requiring employers that do not offer workplace savings arrangements to automatically enroll their employees in payroll deduction IRAs administered by the states. It also applies to states that have enacted laws creating a marketplace of retirement savings options geared at employers that do not offer workplace plans. According to the DOL, the rule “provides guidance for states in designing programs by providing a safe harbor from ERISA coverage to reduce the risk of ERISA preemption of the relevant state laws.” The DOL also released a proposal to help a limited number of cities and local governments automatically enroll employees into IRAs. Read more >
Investing
Study Finds Small Business 401(k) Fees Top 2%
A study of 121 micro and small 401(k) plans, with an average plan size of $677,000, by Employee Fiduciary, LLC, found average plan fees of 2.22%. By comparison, the Investment Company Institute (ICI) reports that plans of all sizes pay an average of 1.29% in fees, and that those fees decline as assets rise. For plans with $1 million to under $10 million in assets, ICI found the fees to be smaller than what Employee Fiduciary found—1.65%. Read more >
Small Talk
ON THIS DATE: In 55 B.C., Britain was invaded by Roman forces under Julius Caesar. In 1498, Michelangelo was commissioned to make the “Pieta.” In 1842, the first fiscal year was established by the U.S. Congress to start on July 1st. In 1873, the school board of St. Louis, MO, authorized the first U.S. public kindergarten. In 1920, the 19th amendment to the U.S. Constitution went into effect. The amendment prohibited discrimination on the basis of sex in the voting booth. In 1937, all Chinese shipping was blockaded by Japan. In 1939, the first televised major league baseball games were shown. The event was a double-header between the Cincinnati Reds and the Brooklyn Dodgers. In 1945, the Japanese were given surrender instructions on the U.S. battleship Missouri at the end of World War II. In 1947, Don Bankhead became the first black pitcher in major league baseball. In 1957, it was announced that an intercontinental ballistic missile was successfully tested by the Soviet Union. In 1957, the first Edsel made by the Ford Motor Company rolled of the assembly line. In 1961, the International Hockey Hall of Fame in Toronto opened. In 1973, a U.S. Presidential Proclamation was declared that made August 26th Women’s Equality Day. In 1978, Sigmund Jahn blasted off aboard the Russian Soyuz 31 and became the first German in space. In 1981, the U.S. claimed that North Korea fired an anti-aircraft missile at a U.S. Surveillance plane while it was over South Korea. In 1990, the 55 Americans at the U.S. Embassy in Kuwait left Baghdad by car and headed for the Turkish border. In 1991, Soviet President Mikhail S. Gorbachev promised that national elections would be held. In 1998, the U.S. government announced that they were investigating Microsoft in an attempt to discover if they “bullied” Intel into delaying new technology.

 

And now it’s time for FRIDAY FILES!

 

In Pentonville, London, police are creating a special task force – Operation Airborne – after two incidents nearly resulted in contraband entering Pentonville prison. On Saturday morning, a man acting suspiciously near the prison dropped two bags containing drugs and mobile phones when running away from police, as reported by Reuters. The following day, police recovered two drones carrying large amounts of “Class B drugs, legal highs” and mobile phones. According to British media, more than 30 incidents last year included drones containing drugs, phones and USB drives near prisons.

In Southern Ogun, Nigeria, a man was charged for provoking people and for “breach of peace” when he named his dog after President Muhammadu Buhari. The man, who named his pet “Buhari,” painted the name twice on the dog and then proceeded to parade it “in front of people from the north,” reported Reuters. He was arrested after a citizen from the north complained to police, but was released on bail until the start of his trial.

In Springfield, Oregon, grocery store employees are cleaning up a lot more than just aisle nine. After not being allowed to purchase $2,200 worth of gift cards because of a bounced check, a 43-year old woman angrily left and then rammed her SUV into a Safeway grocery store, as reported by The Register-Guard. Police later arrested her at her Glendale home.   

In Terre Haute, Indiana, a man finally returned his 60-year overdue library book. Larry Murdock, a Purdue University entomology professor, paid a $436.44 fine after returning a copy of “The Moths of the Limberlost,” that he took out in 1956, when he was just 8 years old. According to WTWO-TV, Murdock says he gave the book back after finding it in a box and explained that returning it “was the right thing to do.” Linton library officials have since used the money to buy new computers for the children’s section.

In Sauget, Illinois, a minor league baseball player thought he hit a grand slam, until he realized he hit his own car. During a game against the Joliet Slammers, 25-year old outfielder Brandon Thomas of the Gateway Grizzlies sent a ball flying into the parking lot, where his 2008 black Toyota Tundra was parked. It wasn’t until innings later that Thomas found out, when players in the dugout told him.

When Frantisek Hadrava of Zdikov, Czech Republic didn’t want to drive to work for 14 minutes, he decided to take a much simpler form of transportation: driving a plane. According to Reuters, the 45-year old locksmith took about two years to build his $4,200 plane, which he named “Vampira.” His new commute time? About half as long as before, at seven minutes. 

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

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