Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 16th, 2018

2018 Best in Class 401(k) Plans

PLANSPONSOR is pleased to announce the fourth “class” of companies being given the Best in Class 401(k) Plan designation. There are 26 recognized plans this year. Read more >
Benefits & Administration
Case Study Warns of Effect of Move From Public DB to Public DC
The NIRS studied the case of Palm Beach, Florida, which it says offers “an important cautionary tale on the detrimental impacts of switching public employees from DB pensions to DC accounts.” Read more >
Equity Compensation Recipients Seek Financial Wellness Help
Equity compensation can serve many important functions in participants’ overall financial strategies. While employees utilize their benefits in multiple ways, they are most likely to do so to get needed cash (35%), make a large purchase (28%) or help prepare for retirement (11%), according to a survey from Schwab Stock Plan Services. Eighty percent of all respondents say they would be much more confident with the help of a financial adviser. Additionally, survey participants say they would take advantage of a financial wellness program—which would provide education, tools and resources to help with their overall financial health—if it were offered by their employer. Read more >
Products, Deals and People
Investment Products and Services Launches
EPIC incorporates StoryLine to platform; Sterling Capital adds R6 share class to select mutual funds; and PAAMCO launches alternative beta tool. Read more >
MOST READ ARTICLES
1
Adidas Sued Over Excessive Fees for 401(k) Participants
2
(b)lines Ask the Experts – Proper Delivery Method for SPDs
3
Yale Sued Over Wellness Program ‘Penalty’
4
Employees in Two States Miss Out on One HSA Benefit
5
Some Help for Women’s Retirement Savings Gap May Be Coming
Economic Events

The Producer Price Index for final demand increased 0.4% in January, as prices for final demand services rose 0.3% and the index for final demand goods advanced 0.7%, the Bureau of Labor Statistics announced. The final demand index rose 2.7% for the 12 months ended in January.

 

In the week ending February 10, the advance figure for seasonally adjusted initial claims for unemployment insurance was 230,000, an increase of 7,000 from the previous week’s revised level of 223,000, the Labor Department reported. The four-week moving average was 228,500, an increase of 3,500 from the previous week’s revised average of 225,000.

 

The average interest rate for a 30-year fixed-rate mortgage is 4.38%, up from 4.32% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.84%, up from 3.77%.

Market Mirror

Thursday, the Dow gained 306.88 points (1.23%) to finish at 25,200.37, the NASDAQ climbed 112.82 points (1.58%) to 7,256.43, and the S&P 500 closed 32.57 points (1.21%) higher at 2,731.20. The Russell 2000 was up 15.10 points (0.99%) at 1,537.20, and the Wilshire 5000 increased 326.59 points (1.17%) to 28,331.17.

 

The prices of the 10-year Treasury note and 30-year Treasury bond were each up 1/32, decreasing their yields to 2.901% and 3.161%, respectively.

Compliance
Plaintiffs Win Class Certification in NYU 403(b) Lawsuit
The U.S. District Court for the Southern District of New York ruled this week to certify a sizable class of plaintiffs in the Employee Retirement Income Security Act (ERISA) lawsuit targeting two 403(b) retirement plans at New York University. The claims in the case are similar to those filed against many other 403(b) retirement plans run by U.S. universities and colleges large and small. According to the third amended complaint—the one ruled on here—instead of using the NYU plans’ bargaining power to reduce expenses and exercising independent judgment to determine what investments to include in the plans, the defendants squandered that leverage away by allowing the plans’ conflicted third-party service providers—TIAA-CREF and Vanguard—to dictate the plans’ investment lineup, to link their recordkeeping services to the placement of investment products in the plans, and to collect unlimited asset-based compensation from their own proprietary products. Read more >
Investing
Can DB Plans Offer a Better TDF Selection and Monitoring Framework?
A new white paper published by P-Solve presents a simplified framework to help retirement plan fiduciaries improve the effectiveness and efficiency of target-date fund monitoring—comparing the choices of TDF managers with the established practices of major defined benefit (DB) pension plans. Concerning the monitoring of asset allocations, the researchers observe how the largest TDF managers “take very high levels of stock market risk in longer-term funds, ensuring that participants will bear the full brunt of any market downturn.” Even shorter-term funds have relatively high levels of stock exposure, researchers explain, higher than what is typically found in DB pension funds. Read more >
Small Talk

ON THIS DATE: In 1741, Benjamin Franklin published America’s second magazine, “The General Magazine and Historical Chronicle.” In 1857, the National Deaf Mute College was incorporated in Washington, D.C. It was the first school in the world for advanced education of the deaf. The school was later renamed Gallaudet College. In 1862, during the U.S. Civil War, about 14,000 Confederate soldiers surrendered to Gen. Ulysses S. Grant at Fort Donelson, Tennessee. In 1883, “Ladies Home Journal” began publication. In 1914, the first airplane flight between Los Angeles and San Francisco took place. In 1937, Wallace H. Carothers received a patent for nylon. Carothers was a research chemist for Du Pont. In 1858, the first ironing board was patented by William Vandenburg and James Harvey. In 1960, the U.S.S. Triton began the first circumnavigation of the globe under water. In 1968, in the U.S., the first 911 emergency telephone system was inaugurated in Haleyville, Alabama. In 1970, Joe Frazier began his reign as the undefeated heavyweight world champion when he knocked out Jimmy Ellis in five rounds. In 2005, the Kyoto global warming pact went into effect in 140 nations. In 2005, the National Hockey League (NHL) announced the cancellation of the 2004-2005 season due to a labor dispute. It was the first time a major sports league in North America lost an entire season to a labor dispute.

SURVEY SAYS: We’d appreciate more responses to this week’s survey. This week, I’d like to know, did your retirement plan participants make transfers related to the recent market plunge, and did you? Responses, of course, are anonymous. You may respond to this survey by 6 p.m. Pacific time today. Read more >

And now it’s time for FRIDAY FILES!

Dollar Store hacks. Read more >
Ok, so she’s new to bowling. Read more >
In Hong Kong, meet Pigzilla. [pic] Read more >

In Flagler County, Florida, the jail has put up a neon, blinking “vacancy” light. According to the Associated Press, Flagler County Sheriff Rick Staly has dubbed the county jail the Green Roof Inn. A sign lists the amenities at the facility—there is no privacy, group bathrooms and no meal selection. But inmates do get free transportation to court and state prisons, designer handcuffs and leg irons, color coordinated jumpsuits and shoes. Staly says it’s a warning that jail is not a “5-star hotel.”

 

In Soroe, Denmark, a volunteer in a secondhand charity shop said a woman left a bag of clothes, which included a coat, in the shop’s container. He told the newspaper Dagbladet Ringsted og Sjaellandske that he was checking the coat’s buttons, zippers and pockets when he noticed a bulge in one pocket and found $8,284 worth of money in euro bills. He called the police so they could investigate who owned the coat before donating it.

 

In Transylvania, Romania, a university has published the results of a study about how safe it is to eat snow.  The 2017 experiment showed it was safe to eat snow that was a half-day old, and safer to eat it in the colder months. But by two days old, the snow is not safe to eat, Istvan Mathe, a professor at the Sapientia Hungarian University of Transylvania, told The Associated Press. “I am not recommending anyone eats snow. Just saying you won’t get ill if you eat a bit,” he said.

 

In Dongguan, China, a security guard at an airport told a woman she would have to put her purse through the screening machine. Security video shows her leaving the screen and then emerging from the device. Still x-ray images online show a person in high heels kneeling among bags and other items. Many Chinese migrant workers carry their annual earnings home to family in cash during the Lunar New Year holiday, the busiest travel period of the year. “Passengers are warned that not only is this kind of behavior forbidden, but also the radiation from the machine is incredibly harmful to human health,” the People’s Daily said.

 

In Oregon, a woman felt a prick under her eyelid and thought it was a stray eyelash, but after a week she decided to see what was causing the irritation, put her finger under the lid and pulled out a worm. She pulled out about six more tiny worms over the next few days. That is when she sought medical help. She consulted with the Centers for Disease Control and Prevention, which identified the worms as Thelazia gulosa, a parasite typically found on cow eyeballs. Richard Bradbury, team lead of the Parasitology Reference Diagnostic Laboratory at the CDC’s Division of Parasitic Diseases and Malaria, told CBS News that 14 worms were removed from the woman’s eye over a 20-day period. Doctors believe Beckley was infected when a fly landed on her eye while she was traveling through cattle fields in southern Oregon, according to USA Today.

 

Have a great weekend, everyone! Presidents’ Day is a holiday for us, so NewsDash will be back in your inbox on Tuesday.

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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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