Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
February 25th, 2019

Pension Experts Urge LDI Considerations, Stress Tests in 2019

Tom McCartan, with Prudential General Investment Management (PGIM), says most pension plans are in much better shape today than they were a decade ago. In his opinion, the current state of affairs begs the question, “Should you stay on the funded status rollercoaster or move toward a recession-ready liability-driven investing [LDI] strategy?” Read more >
Compliance
Fidelity Charged With ‘Secret’ Payment Scheme in Violation of ERISA
A lawsuit contends that kickback payments Fidelity requires from investment funds bear no relationship to the cost or value of services provided and are a replacement for declining amounts of revenue sharing payments received by Fidelity as a result of the increasing use of passive mutual funds, institutional and R6 share classes of mutual funds and collective trusts. Read more >
Parties Reach Settlement Agreement in Anthem 401(k) Excessive Fee Case
The case is notable for arguing that an investment that had only a 4 basis point annual fee could have been replaced by one charging only 2 basis points. Read more >
GAO Asks for More Guidance on DC Plan Assets Transferred to States
The Government Accountability Office (GAO) has recommended that the IRS consider clarifying whether transfers from employer-based plans to states constitute reportable and taxable distributions and consider modifying its list of permitted reasons for rolling over savings after the 60-day rollover deadline. Read more >
MOST READ ARTICLES
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IRS Issues Guidance About Uncashed Retirement Plan Distributions
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Options for Providing Student Loan Repayment Benefits Increasing
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Taking a ‘Calculated’ Approach to Retirement Readiness
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Litigators Share What They Investigate for Filing TDF Lawsuits
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Government Prosecutors Weigh In on Supreme Court IBM Case
Sponsored message from MetLife
Making Savings Last A Lifetime
PLANSPONSOR recently spoke with Tim Brown, Senior Vice President, Life & Income Funding Solutions at MetLife, on the changes in mindset and risk perspective for both retiring participants and plan sponsors, and building out the “last mile” of DC plans with guaranteed solutions for retirement income. Read more >
Economic Events

Existing-home sales experienced a minor drop for the third consecutive month in January, according to the National Association of Realtors. Of the four major U.S. regions, only the Northeast saw an uptick in sales activity last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.2% from December to a seasonally adjusted annual rate of 4.94 million in January. Sales are now down 8.5% from a year ago (5.40 million in January 2018).

 

THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about wholesale trade for December. Tomorrow, the Census Bureau will report about housing starts in December, and the Conference Board will release its Consumer Confidence Index for February. Wednesday, the Census Bureau will report about factory orders for December. Thursday, the Department of Labor will issue its initial claims report.

Market Mirror

Friday, the Dow closed 181.18 points (0.70%) higher at 26,031.81, the NASDAQ gained 67.84 points (0.91%) to finish at 7,527.55, and the S&P 500 was up 17.79 points (0.64%) at 2,792.67. The Russell 2000 climbed 14.51 points (0.92%) to 1,590.06, and the Wilshire 5000 increased 187.01 points (0.65%) to 28,986.31.

 

The price of the 10-year Treasury note increased 13/32, bringing its yield down to 2.653%. The price of the 30-year Treasury bond climbed 23/32, decreasing its yield to 3.013%.

 

WEEK’S WORTH: For the week ending February 22, the Dow was up 0.57%, the NASDAQ gained 0.74%, and the S&P 500 increased 0.62%. The Russell 2000 climbed 1.33%, and the Wilshire 5000 finished 0.63% higher.

Products, Deals and People
Retirement Industry People Moves
AXA adds president for Retirement Division; Wilshire announces series of promotions and hires; DWS Group adds investment solutions head; and more. Read more >
Small Talk

ON THIS DATE: In 1791, First Bank of the United States (The President, Directors and Company, of the Bank of the United States) was chartered by Congress and approved by President George Washington. In 1793, the department heads of the U.S. government met with President George Washington for the first Cabinet meeting on U.S. record. In 1836, Samuel Colt received U.S. Patent No. 138 (later 9430X) for a “revolving-cylinder pistol.” It was his first patent. In 1870, Hiram Rhoades Revels, a Republican from Natchez, Mississippi, was sworn into the U.S. Senate, becoming the first African American ever to sit in Congress. In 1901, The United States Steel Corp. was incorporated by J.P. Morgan. In 1913, the 16th Amendment to the U.S. Constitution was ratified. It authorized a graduated income tax. In 1919, the state of Oregon became the first state to place a tax on gasoline. The tax was 1 cent per gallon. In 1933, the aircraft carrier Ranger was launched. It was the first ship in the U.S. Navy to be designed and built from the keel up as an aircraft carrier. In 1964, 22-year-old Cassius Clay shocked the odds-makers by dethroning world heavyweight boxing champ Sonny Liston in a seventh-round technical knockout.

SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “How much would someone have to pay you to convince you to give up your cell phone for one week?” The largest percentage of responding readers (37%) reported that they wouldn’t have to be paid anything and would gladly give up their cell phone for a week. The next biggest response was “more than $500,” cited by 22.2% of respondents. Only 1.8% of respondents chose “Nothing, I wouldn’t give it up for any amount of money.” In verbatim comments, it was refreshing to see so many readers who are not that connected to their cell phones, with several saying they would pay someone to take it, and even one reader saying he or she doesn’t have a cell phone. Others reported little use of the phone outside of talking and texting; however, for others, the phone was critical, either because they don’t have a landline or they use their phone for work. Editor’s Choice goes to the reader who said, “Just send me on a cruise and I will happily give up my cell phone!” Thanks to all who participated in the survey! 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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