Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 15th, 2018
Benefits & Administration
Participant Trust in Providers Could Be Much Improved
Cerulli Associates’ latest reporting offers a deep dive into the differences in investor preferences measured across those who seek out and prefer traditional, in-person advisory relationships, compared with those who prefer Web-based advisory programs. According to Cerulli, in most cases, those who identify as online enthusiasts opt to take control away from financial advisers because they believe financial firms are not looking out for them. To combat this belief, providers are working to be “more transparent with fees and offer products and services that are a fair trade-off for the client’s and the firm’s interests.” Read more >
From the Magazine
QDIA in Transition
“One thing we’ve learned as an industry … is that ‘auto’ solutions work,” says Sangeeta Moorjani, Boston-based head of workplace product marketing and advice at Fidelity Investments. Fidelity is now among the providers pioneering an evolution in automated plan design: qualified default investment alternatives (QDIAs) that seek to move participants by default into the right investment at the right time. Most often that will mean automatically switching participants, unless they opt out, from a default target-date fund (TDF) into a managed account when they reach a predetermined trigger, such as age 50. Read more >
Products, Deals and People
Medicare and Social Security Guides Updated by Manning & Napier
Manning & Napier created a set of reference guides to break down exactly what individuals need to know about the new tax law, Social Security, Medicare, and long-term care going into 2018. Read more >
MOST READ ARTICLES
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SECURE Act Passes House, Bringing Calls for Senate Collaboration
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J.P. Morgan Agrees to Settle Stable Value Funds Suit
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Individuals, Employers and Government All Play a Part in Retirement Readiness
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Participant Loans: A Fiduciary Storm Brewing?
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What to Know About Financial Audits Filed with Form 5500s
Economic Events

The combined value of distributive trade sales and manufacturers’ shipments for December, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,431.3 billion, up 0.6% from November 2017 and up 6.7% from December 2016, the Census Bureau announced.

Advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $492.0 billion, a decrease of 0.3% from the previous month, but 3.6% above January 2017. Total sales for the November 2017 through January period were up 4.9% from the same period a year ago. The November 2017 to December 2017 percent change was revised from up 0.4% to virtually unchanged. Retail trade sales were down 0.3% from December 2017, but 3.9% above last year. Nonstore Retailers were up 10.2% from January 2017, while Gasoline Stations were up 9.0% from last year.

In January, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% seasonally adjusted (SA); rising 2.1% over the last 12 months, not seasonally adjusted (NSA), according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.3% in January, SA; up 1.8% over the year, NSA.

Real average hourly earnings decreased 0.2% in January, seasonally adjusted. Average hourly earnings increased 0.3%, and CPI-U increased 0.5%. Real average weekly earnings decreased 0.8% over the month.

Market Mirror

Wednesday, the Dow gained 253.04 points (1.03%) to finish at 24,893.49, the NASDAQ closed 130.11 points (1.86%) higher at 7,143.62, and the S&P 500 increased 35.69 points (1.34%) to 2,698.63. The Russell 2000 was up 27.15 points (1.82%) at 1,522.10, and the Wilshire 5000 climbed 396.83 points (1.44%) to 28,004.59.

The price of the 10-year Treasury note was down 24/32, boosting its yield to 2.916%. The price of the 30-year Treasury bond fell 1 10/32, bringing its yield up to 3.181%.

Investing
Review of Vanguard and Fidelity Fee Adjustment Highlights Industry Competition
Retirement plan investment product and recordkeeping providers are careful to present a friendly face in their marketing and even in their public interactions with each other—but that doesn’t mean they don’t compete fiercely behind the scenes. Read more >
Small Talk

ON THIS DATE: In 1758, mustard was advertised for the first time in America. In 1842, adhesive postage stamps were used for the first time by the City Dispatch Post (Office) in New York City. In 1879, U.S. President Rutherford B. Hayes signed a bill that allowed female attorneys to argue cases before the U.S. Supreme Court. In 1903, Morris and Rose Michtom, Russian immigrants, introduced the first teddy bear in America. In 1933, U.S. President-elect Franklin Roosevelt escaped an assassination attempt in Miami. Chicago Mayor Anton J. Cermak was killed in the attack. In 1953, the first American to win the women’s world figure skating championship was 17-year-old Tenley Albright.

SURVEY SAYS: Data from the Alight Solutions 401(k) Index shows retirement plan participants reacted poorly to the latest round of stock market volatility, with trading activity described by researchers as “exceptionally high” over the days following the stock market plunge. This week, I’d like to know, did your retirement plan participants make transfers related to the market volatility, and did you? You may respond to this survey by 6 p.m. Pacific time today. Read more >
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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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