Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 12th, 2018

4% Rule Not a Reliable Retirement Income Withdrawal Strategy for All People

A retiree’s investment portfolio is a large factor in determining an optimal, safe withdrawal rate in retirement, but longevity, expected spending and whether guaranteed retirement income is available plays a part as well. Read more >
Benefits & Administration
OregonSaves Shows Initial Success
At the time of an analysis from the Center for Retirement Research (CRR) at Boston College, 62% of eligible workers were participating in the OregonSaves program, and 93% of contributing participants had not changed their default deferral rate of 5%. According to an Issue Brief from the Center for Retirement Research (CRR) at Boston College, Oregon’s implementation has also highlighted challenges related to being the first such program in the country, such as helping employers unfamiliar with OregonSaves to provide timely and accurate data, processing payroll deductions, and staying on top of changes to employees and payroll deductions. Read more >
Financially Well Employees Buoy the Bottom Line
John Hancock’s annual Financial Stress Survey finds a sizable majority of workers (69%) are stressed over their finances, leading to a range of behaviors that can cost companies approximately $2,000 in excess labor costs per employee. Patrick Murphy, president and CEO, John Hancock Retirement Plan Services, says the research clearly shows how people need help managing competing financial obligations. When asked what financial issues they would like help with, three-quarters cited retirement income preparation aid, followed by Social Security and Medicare claiming (60%), and debt counseling (32%). Read more >
Demand for Financial Advice Is on the Rise
Sixty-four percent of workers turn to their 401(k) plan provider as their first source for financial advice, including advice on topics besides retirement, according to a survey by T. Rowe Price. Additionally, the demand for financial advice has increased. Read more >
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401(k) Plan Sponsors Enhancing Plan Design
The availability of Roth contributions has doubled in the last decade, and more plan sponsors are using a default deferral rate with automatic enrollment that is higher than 3%, a Plan Sponsor Council of America survey found. Read more >
Economic Events

The Producer Price Index for final demand rose 0.1% in November, as prices for final demand services increased 0.3%, and the index for final demand goods decreased 0.4%, according to the Bureau of Labor Statistics. Prices for final demand advanced 2.5% for the 12 months ended in November.

Sponsored message from Vanguard
Vanguard TDFs—Well-designed in any weather. A look at how Vanguard® Target Retirement Funds are designed to help investors endure both good markets and bad. Read more >
Market Mirror

Tuesday, the Dow closed 53.02 points (0.22%) lower at 24,370.24, the NASDAQ increased 11.31 points (0.16%) to 7,031.83, and the S&P 500 was virtually unchanged at 2,636.78. The Russell 2000 decreased 2.96 points (0.21%) to 1,440.13, and the Wilshire 5000 was down 19.67 points (0.07%) at 27,140.44.

The price of the 10-year Treasury note was down 6/32, increasing its yield to 2.881%. The price of the 30-year Treasury bond was up 3/32, decreasing its yield to 3.126%.

Ask the Experts
Requiring Participants to Take Loans Prior to Hardships
“I understand that under the new proposed hardship regulations a participant will no longer be required to take all available loans from the retirement plans that we sponsor. However, if we want to retain the requirement that a participant take such loans prior to being eligible for a hardship distribution, can we?” Read more >
Investing
401(k) Participant Trading Returned to Normal in November
Most 401(k) trading in the month favored fixed income investments. Read more >
Small Talk
Insure.com’s annual salary calculation based on recent Bureau of Labor Statistics (BLS) wage data shows Santa would earn a salary of $152,367. For running the workshop (closest matching BLS occupation, industrial engineer), Insure.com calculates that Santa would earn $126,468 this year, up 2% from last year. As a professional shopper (Sales and Related Workers, All Other), he would earn $2,318, down 8% from last year. Thirteen of Santa’s main job assignments experienced wage growth this year. Read more >

ON THIS DATE: In 1787, Pennsylvania became the second state to ratify the U.S. Constitution. In 1791, the Bank of the United States, also known as the First Bank, opened for business in Philadelphia. In 1800, Washington, D.C., was established as the capital of the United States. In 1870, Joseph H. Rainey of South Carolina became the first black lawmaker to be sworn into the U.S. House of Representatives. In 1896, Guglielmo Marconi gave the first public demonstration of radio at Toynbee Hall, London. In 1900, Charles M. Schwab formed the United States Steel Corporation. In 1917, Father Edward Flanagan opened Boys Town in Nebraska. The farm village was for wayward boys. In 1925, the “Motel Inn,” the first motel in the world, opened in San Luis Obispo, California. In 1946, a United Nations committee voted to accept a six-block tract of Manhattan real estate to be the site of the UN’s headquarters. The land was offered as a gift by John D. Rockefeller Jr. In 1975, Sara Jane Moore pled guilty to a charge of trying to kill President Gerald Ford in San Francisco the previous September. In 1995, the Senate stopped a constitutional amendment giving Congress authority to outlaw flag burning and other forms of desecration against the American flag. In 1998, the House Judiciary Committee rejected censure, and approved the final article of impeachment against President Bill Clinton. The case was submitted to the full House for a verdict. In 2000, the U.S. Supreme Court found that the recount ordered by the Florida Supreme Court in the 2000 U.S. Presidential election was unconstitutional. In 2001, the House of Representatives passed legislation that would implement minimum federal election standards and provide funding to help states modernize their voting systems.

 

WEDNESDAY WISDOM: “Never lend your car to anyone to whom you have given birth.”—Erma Bombeck, newspaper columnist

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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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