Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
August 6th, 2018
PanAgora Suggests New Investing Strategy for Public DB Plans
Defined benefit (DB) plan sponsors face the challenge of generating the required return as well as the need for stability in the plan’s funding status. In a new paper, PanAgora Asset Management says, “We have long argued that these challenges can be addressed through asset allocation in general, and risk parity in particular.” For those plans unable to invest in risk parity, the paper discusses an alternative strategy to target equity exposure within a pension plan—employing a defensive equity strategy designed to reduce downside exposure to market movements, coupled with risk parity-like portfolio construction techniques—referred to as “defensive equity multi-factor.” Bryan Belton, director, multi asset, at PanAgora Asset Management, says, “A cap-weighted strategy skews its way toward the largest stocks, but if plan sponsors own equities in a much more balanced way, it will help with stability.”Read more >
Fidelity Index Fund Fee Cuts Reflect New Industry Realities
Fidelity’s announcement of a sweeping reduction in fees is important for the retirement plan market insofar as it includes the broad pricing cuts on index funds and the new availability of zero expense ratio mutual funds for individual retirement accounts.Read more >
Industry Voices
Barry’s Pickings: Borrowing to Save
Michael Barry, president of October Three (O3) Plan Advisory Services LLC, provides the math for why it makes sense to pay off debt before saving for retirement.Read more >
The Growing Interest in Guaranteed Income Options
2021 Recordkeeping Survey
TRIVIAL PURSUITS: Meaning and Origin of the Idiom “Watershed Moment?”
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
Emergency Savings Programs Boost Retirement Outcomes
Products, Deals and People
Retirement Industry People Moves
PlanSource adds Jellyvision’s benefits counselor to platform; BPAS expands HSA services with new sales specialist; USI names VP of Retirement Services in Texas office; and more.Read more >
WebMD Gets Into Financial Wellness Market
WebMD Health Services, a subsidiary of WebMD Health Corp., announced the launch of a new solution that helps employees become better educated about their financial challenges through personalized skill building and action plans that reduce money-related stress and motivate change, no matter their current financial situation or stage of life. The new offering is iGrad’s Enrich financial platform. “WebMD’s commitment to financial wellness education is significant because of the proven connection between financial stress and health issues,” says iGrad President and CEO Rob LaBreche. “We are thrilled about partnering with WebMD to offer our adaptive and interactive online financial literacy platform.”Read more >
Sponsored message from MetLife
MetLife’s Roberta Rafaloff Discuss How Plan Design Can Lead to More Successful Retirement Outcomes.Read more >
Economic Events

Total nonfarm payroll employment rose by 157,000 in July, and the unemployment rate edged down to 3.9%, the Bureau of Labor Statistics reported. Employment increased in professional and business services, in manufacturing, and in health care and social assistance.


THE ECONOMIC WEEK AHEAD: Thursday, the Labor Department will issue its initial claims report, the Bureau of Labor Statistics will report about wholesale trade in June and the Bureau of Labor Statistics will reveal the producer price index for July. Friday, the Bureau of Labor Statistics will reveal the consumer price index for July.
Market Mirror

Friday, the Dow gained 136.42 points (0.54%) to finish at 25,462.58, the NASDAQ was up 9.33 points (0.12%) at 7,812.02, and the S&P 500 increased 13.13 points (0.46%) to 2,840.35. The Russell 2000 fell 8.73 points (0.52%) to 1,673.37, and the Wilshire 5000 closed 99.20 points (0.34%) higher at 29,554.14.


The yield for 10-year Treasury note was 2.950%, and the yield for the 30-year Treasury bond was 3.089%.


WEEK’S WORTH: For the week ending August 3, the Dow was up 0.05%, the NASDAQ climbed 0.96%, and the S&P 500 finished 0.76% higher. The Russell 2000 increased 0.60%, and the Wilshire 5000 gained 0.79%.
From the Magazine
Do You Document Investment Changes?
Regular reviews of the plan investment menu are part of a prudent fiduciary process—which can also include the drafting of an investment policy statement (IPS) and formation of an investment committee—although neither are required. We analyzed sponsor data from the 2017 Defined Contribution (DC) Survey, looking at plans of various sizes, both with and without an IPS and investment committee, to see whether that criteria translates to better documentation of investment changes.Read more >
Small Talk
ON THIS DATE: In 1787, at the Constitutional Convention in Philadelphia debate began on the first draft of the U.S. Constitution. In 1890, Cy Young achieved his first major league victory. He would accumulate 511 in his career. In 1914, Austria-Hungary declared war against Russia. Serbia declared war against Germany. In 1926, Gertrude Ederle became the first American woman to swim the English Channel. She was 19 years old at the time. The swim took her 14 1/2 hours. In 1945, the American B-29 bomber, known as the Enola Gay, dropped the first atomic bomb on an inhabited area. The bomb named “Little Boy” was dropped over the center of Hiroshima, Japan. An estimated 140,000 people were killed. In 1965, the Voting Rights Act was signed by U.S. President Lyndon B. Johnson. In 1986, William J. Schroeder died. He lived 620 days with the Jarvik-7 manmade heart. He was the world’s longest surviving recipient of a permanent artificial heart. In 1986, Timothy Dalton became the fourth actor to be named “James Bond.” In 1990, the U.N. Security Council ordered a worldwide trade embargo with Iraq. The embargo was to punish Iraq for invading Kuwait. In 1996, NASA announced the discovery of evidence of primitive life on Mars. The evidence came in the form of a meteorite that was found in Antarctica. The meteorite was believed to have come from Mars and contained a fossil.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “What, if anything, bugs you about work meetings? First to note, not one respondent said nothing bugs them about work meetings. The top annoyance about work meetings among suggestions listed, selected by 54.9% of responding readers, is they start or end late. This was followed by “attendees distracted (using phone, checking email, doodling, etc.)” (50.7%) and “unnecessary (e.g. could have been handled over email) (45.1%). A significant number of readers listed “other” annoyances (39.4%), while 33.8% say attendees being unprepared bugs them, 25.3% indicated that not sticking to an agenda when one is provided bothers them, 22.5% selected “attendees interrupt each other,” and 21.1% chose “too much or not enough time allotted.” Most readers who provided verbatim comments about work meetings complained they were too long, unproductive and happen too often. Some readers shared tips for more effective meetings. Editor’s Choice goes to the reader who said: “Sometimes I get lost in meetings wondering how they got the conference table through the door.” Thanks to everyone who participated in the survey!Read more >
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Editorial: Alison Cooke Mintzer


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