Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 4th, 2015
Benefits & Administration
Regulations Are Sponsors’ Primary Concern
Reducing plan costs and reevaluating the investment menu trail regulations for top sponsor concerns. Asked their top three retirement plan issues, 49% of sponsors first cite complying with regulations, followed by reducing plan costs (47%), and reevaluating the investment menu (45%), according to a new report from Cogent, “Navigating Change in the 401(k) Market: Key Insights for DC Plan Providers and Investment Managers.” Read more >
Fifty-five percent of plan sponsors on Ascensus’ platform funded a match in 2014, up from 52% in the previous year, according to the recordkeeper’s analysis of the retirement plans it serves. In addition, 18% of plans automatically enrolled participants in 2014, up from 15% in 2013. Assets in model portfolios and target-date funds (TDFs) have surged from 17% of all plan assets in 2011 to 26% in 2014. Digital access is also fundamental, as 85% of new enrollees sign up for their retirement plan online.Read more >
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Products, Deals & People
Goldman Sachs Unveils Retirement Share Class
Goldman Sachs Asset Management (GSAM) has introduced an R6 retirement share class across 54 mutual funds. The initial launch includes 49 funds that became available for purchase on July 31; remaining funds will be launched later this year. Class R6 shares are generally available only to certain types of employee benefit plans and do not pay any form of intermediary compensation.Read more >
Market Mirror
Stocks fell broadly Monday. The Dow closed 91.66 points (0.52%) lower at 17,598.2, the NASDAQ fell 12.90 points (0.25%) to 5,115.38, and the S&P 500 was down 5.80 points (0.28%) at 2,098.04. The Russell 2000 lost 4.36 points (0.35%) to finish at 1,231.79, and the Wilshire 5000 decreased 73.20 points (0.33%) to 22,106.88.

On the NYSE, 3.2 billion shares changed hands, with 1.5 declining issues for every advancing issue. On the NASDAQ, 2.8 billion shares traded, with 1.7 declining issues for every advancing issue.

The price of the 10-year Treasury note was down 5/32, increasing its yield to 2.168%. The price of the 30-year Treasury bond decreased 13/32, bringing its yield to 2.870%.
Compliance
N.J. Supreme Court Will Consider COLAs
An updated docket sheet on the New Jersey State Supreme Court website confirms the court will consider whether a pension reform measure passed by Governor Chris Christie improperly suspended cost of living adjustments for state pensioners. Many New Jersey public sector pensioners saw their cost-of-living adjustments (COLA) suspended under a pension-reform bill signed in June 2011 by Christie, aimed at closing an approximately $11 billion unfunded liability through a variety of changes and overhauls.
Investing
Pension Plans Had a Strong Second Quarter
Due to an increase in the effective interest rate that decreased pension plan liabilities by 10%, the funded status of pension plans rose eight percentage points in the second quarter, from 79% to 87%, according to Sibson Consulting and Segal Rogerscasey. However, investment performance was weak in the second quarter, with domestic equities returning 0%, international equities rising 1% and global bonds declining by 2%.Read more >
July Brought Slight Funding Drop for Pensions
The aggregate funded ratio for U.S. corporate pension plans decreased to 86.1% for the month of July 2015, according to Wilshire Consulting, a business unit of Wilshire Associates Incorporated. The decline in funding levels “was driven by a 1.8% increase in liability values versus a 1% increase in asset values,” suggested Ned McGuire, vice president and member of the Pension Risk Solutions Group of Wilshire Consulting. Read more >
Small Talk

ON THIS DATE:  In 1735, Freedom of the press was established with an acquittal of John Peter Zenger. The writer of the New York Weekly Journal had been charged with seditious libel by the royal governor of New York. The jury said that “the truth is not libelous.” In 1821, “The Saturday Evening Post” was published for the first time as a weekly. In 1914, Britain declared war on Germany in World War I. The U.S. proclaimed its neutrality. In 1922, the death of Alexander Graham Bell, two days earlier, was recognized by AT&T and the Bell Systems by shutting down all of its switchboards and switching stations. The shutdown affected 13 million phones. In 1944, Nazi police raided a house in Amsterdam and arrested eight people. Anne Frank, a teenager at the time, was one of the people arrested. Her diary would be published after her death. In 1956, William Herz became the first person to race a motorcycle over 200 miles per hour. He was clocked at 210 mph. In 1957, Florence Chadwick set a world record by swimming the English Channel in 6 hours and 7 minutes. In 1958, Billboard Magazine introduced its “Hot 100” chart, which was part popularity and a barometer of the movement of potential hits. The first number one song was Ricky Nelson’s “Poor Little Fool.” In 1977, U.S. President Carter signed the measure that established the Department of Energy. In 1986, The United States Football League called off its 1986 season. This was after winning only token damages in its antitrust lawsuit against the National Football League. In 2007, NASA’s Phoenix spacecraft was launched on a space exploration mission of Mars. The Phoenix lander descended on Mars on May 25, 2008.

TUESDAY TRIVIA: An ear of corn almost always has an even number of rows (twelve, fourteen, or sixteen).

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

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