Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 22nd, 2016
Benefits & Administration
Student Loan Debt Following Some into Retirement
A report from the Government Accountability Office confirms that student loan debt can follow Americans into retirement and affect their retirement income. In fiscal year 2015, 49.7% of collections of defaulted student loan debt was generated from offsets of federal payments through the Treasury Offset Program, including but not limited to Social Security offsets. About 44% of borrowers 50 and older at the time of their initial offset saw the maximum possible amount of their Social Security benefit withheld, equal to 15% of their benefit payment. Read more >
Utilizing HSAs to Fund a Healthy Retirement
With health care costs reaching record levels by some projections, HSAs can serve as a crucial piece of a holistic retirement-savings strategy. Read more >
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The Senate Math That Could Block SECURE Act
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Open MEPs Not for Every Plan Sponsor
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Driving Financial Wellness at Work
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Pension Participants Claim ERISA Breaches in Dow DuPont Pension Transfer
Choosing the Right TDF for Your Participants
With so much ongoing development in the target-date fund (TDF) market, new products are emerging with designs that vary widely in terms of asset allocation; underlying fund selection process, which can be firm-specific or open-architecture; investment strategy, which can be active, passive or a mix of both; and glide path, which can either travel “to” or “through” a participant’s retirement. “All these need to be considered against the plan’s overall objective and philosophy,” suggests Toni Brown, senior defined contribution specialist, Capital Group. She also notes TDF prospectuses, historical performance, and risk statistics are all crucial to review. Read more >
Economic Events

A big surge in the Northeast and a smaller gain in the South pushed existing-home sales up in November for the third consecutive month, according to the National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.7% to a seasonally adjusted annual rate of 5.61 million in November from a downwardly revised 5.57 million in October. November’s sales pace is now the highest since February 2007 (5.79 million) and is 15.4% higher than a year ago (4.86 million).

Market Mirror

Wednesday, the Dow closed 32.66 points (0.16%) lower at 19,941.96, the NASDAQ decreased 12.51 points (0.23%) to 5,471.43, and the S&P 500 slipped 5.58 points (0.25%) to 2,265.18. The Russell 2000 was down 8.76 points (0.63%) at 1,375.19, and the Wilshire 5000 lost 55.59 points (0.23%) to finish at 23,700.75.

On the NYSE, 3.1 billion shares traded, with a slight lead for declining issues. On the NASDAQ, 2.9 billion shares changed hands, with 1.6 decliners for every advancer.

The price of the 10-year Treasury note was up 5/32, decreasing its yield to 2.541%. The price of the 30-year Treasury bond increased 14/32, bringing its yield down to 3.119%.

Compliance
Former N.Y. Retirement Fund Official Charged for Pay-to-Play
The Securities and Exchange Commission (SEC) announced fraud charges against a former official of the New York State Common Retirement Fund and two brokers accused of orchestrating a pay-to-play scheme to steer billions of dollars to certain firms in exchange for luxury gifts, lavish vacations, and tens of thousands of dollars spent in unethical ways. Read more >
Starwood Hotels Accused of Multiple Fiduciary Failures
Excessive fees, revenue-sharing, lack of a stable value fund and failing to follow fund selection for participants are among accusations in a lawsuit against the hotel chain’s administration of its 401(k) plan. Read more >
Small Talk

ON THIS DATE: In 1775, a Continental naval fleet was organized in the rebellious American colonies under the command of Ezek Hopkins. In 1864, during the American Civil War, Union General William T. Sherman sent a message to U.S. President Abraham Lincoln from Georgia. The message read, “I beg to present you as a Christmas gift the city of Savannah.” In 1894, the United States Golf Association was formed in New York City. In 1895, German physicist Wilhelm Röntgen made the first X-ray. It was of his wife’s hand. In 1941, British Prime Minister Winston Churchill arrived in Washington for a wartime conference with U.S. President Franklin Roosevelt. In 1976, the last show of “Let’s Make A Deal” was aired.

 

No SURVEY SAYS this week.

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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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