Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 30th, 2017
PLANSPONSOR Research
2017 PLANSPONSOR Participant Survey
The 2017 PLANSPONSOR Participant Survey tracks the behaviors, actions taken and preferences of employees of all types—including those without access to a defined contribution (DC) plan, as well as those enrolled in one or who opted out of one. For example, respondents were presented with hypothetical trade-off scenarios. Historically, respondents have been somewhat neutral when asked to choose between a one-time $5,000 bonus and a one-time $5,000 contribution to their 401(k), but this year 57% preferred the bonus—up from 47% in 2016. The preference was strongest, near 70%, among younger participants—those 23 through 39 years old. Among 40- through 59-year-olds, the response was more mixed—approximately 50%—dropping to 32% for those 60 or older. Immediate gratification. Respondents showed an equally strong preference for immediate payouts vs. deferred annuities. Read more >
Ask the Experts
Is an Irrevocable Election Not to Participate Truly Irrevocable?
“I actually have two questions if the Experts can indulge me! I know that a mandatory contribution to a 403(b) plan must be made a) as a condition of employment, or b) pursuant to a one-time irrevocable election whether or not to participate by the employee at the time of initial eligibility to participate in the salary reduction agreement. Can a plan restrict the condition to only a condition of employment, or must an irrevocable election be permitted as well? Also, does irrevocable truly mean irrevocable? We wish to allow an employee who elected not to participate in the plan in the past the opportunity to participate going forward. Can we accomplish this via plan amendment?” Read more >
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5
Driving Cybersecurity with Participants and Providers
Economic Events

The Conference Board Consumer Confidence Index, which had increased in July, improved further in August. The Index now stands at 122.9 (1985=100), up from 120.0 in July. The Present Situation Index increased from 145.4 to 151.2, while the Expectations Index rose marginally from 103.0 last month to 104.0.

Market Mirror

Tuesday, the Dow climbed 56.97 points (0.26%) to 21,865.37, the NASDAQ gained 18.87 points (0.30%) to finish at 6,301.89, and the S&P 500 closed 2.06 points (0.08%) higher at 2,446.30. The Russell 2000 increased by 1.46 (0.11%) to 1,383.68, and the Wilshire 5000 was up 5.99 points (0.02%) at 25,352.05.

 

The price of the 10-year Treasury note was up 6/32, decreasing its yield to 2.135%. The price of the 30-year Treasury bond increased 8/32, bringing its yield down to 2.743%.

Compliance
Court Moves Forward Few Claims in NYU 403(b) Plans Case
In a lawsuit regarding two 403(b) plans offered by New York University, a federal judge has found that while plaintiffs have adequately pleaded certain claims, a number of the bases upon which they rely as support for other claims could not—even if proven—result in a favorable judgment. U.S. District Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York only moved forward certain claims of breaches of fiduciary duty of prudence under the Employee Retirement Income Security Act (ERISA). Read more >
Participant Challenges Prudential and Morningstar Allocation Solution
Another ERISA lawsuit has emerged in federal court, this one naming both Morningstar and various Prudential companies as defendants in the U.S. District Court for the Northern District of Illinois. The case is unique because it cites both the Employee Retirement Income Security Act (ERISA) and the Racketeer Influenced and Corrupt Organizations Law of 1970, known as RICO. Specifically, the suit is focused on the various groups that manage the plan participant-level automated investment advice program marketed under the tradename GoalMaker. Read more >
Investing
Providers Step Up Their Game With QDIA Offerings
The Department of Labor recommends the incorporation of workforce demographics into qualified default investment alternative (QDIA) design; different providers have different philosophies about the best way to do this. Read more >
Small Talk

ON THIS DATE: In 1645, American Indians and the Dutch made a peace treaty at New Amsterdam. New Amsterdam later became known as New York. In 1682, William Penn sailed from England and later established the colony of Pennsylvania in America. In 1780, General Benedict Arnold secretly promised to surrender the West Point fort to the British army. In 1862, the Confederates defeated Union forces at the second Battle of Bull Run in Manassas, Virginia. In 1945, General Douglas MacArthur set up Allied occupation headquarters in Japan. In 1960, a partial blockade was imposed on West Berlin by East Germany. In 1963, the “Hotline” between Moscow and Washington, D.C., went into operation. In 1965, Thurgood Marshall was confirmed by the U.S. Senate as a Supreme Court justice. Marshall was the first black justice to sit on the Supreme Court. In 1983, the space shuttle Challenger blasted off with Guion S. Bluford Jr. aboard. He was the first black American to travel in space. In 1984, U.S. President Ronald Reagan, and several others, were inducted into the Sportscasters Hall of Fame. In 1993, on CBS-TV “The Late Show with David Letterman” premiered. In 1994, the largest U.S. defense contractor was created when the Lockheed and Martin Marietta corporations agreed to a merger. In 1996, an expedition to raise part of the Titanic failed when the nylon lines being used to raise part of the hull snapped. In 2002, Conoco Inc. and Phillips Petroleum merged to create ConocoPhillips. The new company was the third largest integrated energy company and the second largest refining company in the U.S.

 

 

WEDNESDAY WISDOM: “People change and forget to tell each other.”—Lillian Hellman, American screenwriter

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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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