Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 16th, 2019
Webcast Event
It’s no secret that employees need more help reaching their retirement goals. Even though investors may have access to more information than ever before, quality advice, especially around retirement, is still out of reach for many. In response, many employers have made online advice tools, such as managed accounts, increasingly available to employees in 401(k) plans. Managed accounts and other online advice tools can help guide employees on how much to save, how to invest their savings, and when to retire. But what impact, if any, do these programs have on saving and investing behavior? And what wisdom can employers leverage to design a plan that helps employees meet their retirement goals? Read more >
Benefits & Administration
Effective Retirement Plan Communications Are Understandable and Accessible
A survey from the Empower Institute reveals retirement industry terms employees prefer, what they want communications look like, and how they prefer to receive them. Read more >
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Sponsored message from Schwab Retirement Plan Services, Inc.
Participants Speak to the Power of Advice
Among the many challenges of sponsoring a defined contribution retirement savings plan, keeping up with the concerns and expectations of plan participants ranks high on the list. Read more >
Ask the Experts
Elimination of Suspension of Contributions After Hardship Withdrawal
“I understand that the new proposed hardship regulations will require us to eliminate the six-month suspension of elective deferrals from all retirement plans that we sponsor following a hardship distribution. We’ve always hated this provision, and we are eager to eliminate it as soon as possible. How soon may we eliminate this provision?” Read more >
Products, Deals and People
Acquisition Creates Benefits Communications Group Segal Benz
Jennifer Benz, senior vice president, who was CEO of Benz Communications, said its acquisition by The Segal Group expands areas of service for both firms. Read more >
New, Flexible Student Loan Debt Repayment Program
Employees can determine how they want to allocate employer 401(k) matching dollars—be it to their retirement account, to their student loans or to a combination of both. Read more >
Economic Events

The Producer Price Index for final demand fell 0.2% in December, as prices for final demand goods declined 0.4%, and the index for final demand services edged down 0.1%, the Bureau of Labor Statistics reported. Prices for final demand moved up 2.5% in 2018.

Market Mirror

Tuesday, the Dow gained 155.75 points (0.65%) to finish at 24,065.59, the NASDAQ closed 117.92 points (1.71%) higher at 7,023.83, and the S&P 500 increased 27.69 points (1.07%) to 2,610.30. The Russell 2000 was up 12.40 points (0.87%) at 1,445.22, and the Wilshire 5000 climbed 281.92 points (1.06%) to 26,979.61.

The price of the 10-year Treasury note was down 3/32, increasing its yield to 2.715%. The price of the 30-year Treasury bond decreased 10/32, bringing its yield up to 3.071%.

Compliance
Plaintiffs Agree to Drop Empower ERISA Revenue-Sharing Lawsuit
The U.S. District Court for the District of Colorado has dismissed an Employee Retirement Income Security Act (ERISA) lawsuit targeting Great-West, now doing business as Empower Retirement. The decision notes that this outcome was reached voluntarily by the plaintiffs and defendants. Both parties agreed to dismiss this action pursuant to Federal Rule of Civil Procedure 41(a), with each party to bear its own attorneys’ fees, costs and other expenses of litigation. The underlying lawsuit alleged that Empower Retirement entered into revenue-sharing agreements and similar arrangements with various mutual funds (and other investment advisers, instruments or vehicles), leading it to receive revenue-sharing payments for its own benefit in violation of ERISA. Read more >
From the Magazine
Private Market Investing
Private equity does not outperform its public market counterparts in every period, but the difference over time has been significant: For the 15 years ending this past March, for instance, private equity outpaced large-cap stocks by 2.88% percentage points, and small caps by more than 4 points, according to consultants Cambridge Associates, a firm of private market specialists. When plans select the best private equity managers, returns can be even better, says Brian McDonnell, head of Cambridge Associates’ pension practice, in Boston. Read more >
Small Talk

ON THIS DATE: In 1883, the United States Civil Service Commission was established as the Pendleton Act went into effect. In 1900, the Senate consented to the Anglo-German treaty of 1899, by which the U.K. renounced rights to the Samoan islands. In 1919, the 18th Amendment to the U.S. Constitution, which prohibited the sale or transportation of alcoholic beverages, was ratified. In 1944, General Dwight D. Eisenhower took command of the Allied invasion force in London. In 1961, Mickey Mantle signed a contract that made him the highest paid baseball player in the American League at $75,000 for the 1961 season. In 1991, the White House announced the start of Operation Desert Storm. The operation was designed to drive Iraqi forces out of Kuwait. In 1998, the first woman to enroll at Virginia Military Institute withdrew from the school. In 2002, the U.N. Security Council unanimously adopted sanctions against Osama bin Laden, his terror network and the remnants of the Taliban. The sanctions required that all nations impose arms embargoes and freeze their finances.

SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers to share whether their firm formally educates plan committee members, whether this education includes fiduciary training, and how often education is provided. Nearly two-thirds (63.2%) of responding readers said their company provides formal education to retirement plan committee members, while 34.2% said they do not and 2.6% don’t know. More than two-thirds (67.6%) indicated plan committee education includes fiduciary training, 29.7% reported that it does not and 2.7% don’t know. For 36.4% of respondents there is no set schedule for how often education is provided, but 42.4% reported it is provided annually and one-third said it is provided when a new committee member is added. Readers were allowed to choose more than one response. Education is provided semi-annually for 12.1% of respondents’ firms and less than annually for 3%. In verbatim comments, a number of respondents said committee education and training should be an ongoing thing. They shared a few specifics of what education includes. Some use not only onsite education, but require committee members to attend conferences and/or read articles. Editor’s Choice goes to the reader who said: “Committee members need to know up front about their roles and responsibilities and be periodically reminded.” A big thank you to all who participated in our 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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