Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 17th, 2017
Benefits & Administration
An Optimistic or Pessimistic Year for DB Funding?
Looking forward, under an optimistic forecast with rising interest rates (reaching 4.59% by the end of 2017 and 5.19% by the end of 2018) and asset gains (11.2% annual returns), Milliman says the funded ratio of defined benefit (DB) plans would climb to 93% by the end of 2017 and 106% by the end of 2018. “If interest rates continue to climb, the funded ratio could make some major gains,” says Zorast Wadia, co-author of the Milliman 100 Pension Funding Index. Read more >
401(k) Plans Cautious About Adding Guaranteed Income Products
Only 5% of 401(k) plans offer a retirement income guarantee product in the plan, according to the Plan Sponsor Council of America’s (PSCA)’s 59th Survey of Profit Sharing and 401(k) Plans. The top concern plan sponsors expressed about adding a retirement income guaranteed product to the plan was fiduciary exposure. Read more >
MOST READ ARTICLES
1
AT&T Sued Over Calculation of Early Retirement Benefits
2
Congressional Leaders Want SECURE Act Passage in 2019
3
New Lawsuit Highlights Importance of Cybersecurity for Retirement Plans
4
IRS Releases 2019-2020 Priority Guidance Plan
5
DC Plans 3.0 Will Really be Tailored to Individual Situations
Products, Deals and People
Retirement Industry People Moves
PNC hires Asset Liability Management specialist; Lincoln Financial Group hires Institutional Retirement head; Vanguard explores behavioral finance through investor research center; and more. Read more >
Economic Events

The Producer Price Index for final demand increased 0.3% in December, according to the Bureau of Labor Statistics. Final demand prices advanced 0.4% in November and were unchanged in October. In December, the final demand goods index advanced 0.7% and prices for final demand services inched up 0.1%.

The combined value of distributive trade sales and manufacturers’ shipments for November 2016, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,326.7 billion, up 0.1% from October 2016 and up 2.3% from November 2015, the Census Bureau announced.

Advance estimates of U.S. retail and food services sales for December 2016, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $469.1 billion, an increase of 0.6% from the previous month, and 4.1% above December 2015, according to the Census Bureau. Retail trade sales were up 0.8% from November 2016, and up 4.3% from last year. nonstore retailers were up 13.2% from December 2015, while miscellaneous stores were up 7.1% from last year.

THE ECONOMIC WEEK AHEAD: Tomorrow, the Bureau of Labor Statistics will reveal the consumer price index for December. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about housing starts in December.

Sponsored message from PNC Retirement Solutions
PNC Retirement Solutions Embraces Fiduciary Role
Peter Ferrise, Director of Investments for PNC Retirement Solutions, discusses how the Department of Labor’s final fiduciary rule may push more defined contribution plan sponsors to consider 3(21) advisory or 3(38) investment management services. Read more >
Market Mirror

Friday, the Dow was down 5.27 points (0.03%) at 19,885.73, the NASDAQ closed 26.63 points (0.48%) higher at 5,574.12, and the S&P 500 was up 4.19 points (0.18%) at 2,274.64. The Russell 2000 gained 10.98 points (0.81%) to finish at 1,372.04, and the Wilshire 5000 increased 69.10 points (0.29%) to 23,807.98.

On the NYSE, 3.1 billion shares changed hands, with 1.7 advancing issues for every declining issue. On the NASDAQ, 2.9 billion shares traded, with a more than 2 to 1 lead for advancers.

The price of the 10-year Treasury note was down 10/32, increasing its yield to 2.398%. The price of the 30-year Treasury bond decreased 17/32, bringing its yield up to 2.989%.

WEEK’S WORTH: For the week ending January 13, the Dow finished 0.39% lower, the NASDAQ gained 0.96%, and the S&P 500 decreased 0.10%. The Russell 2000 finished 0.35% higher, and the Wilshire 5000 was down 0.04%.

Compliance
DOL Sues to Recover Retirement and Health Plan Contributions
The U.S. Department of Labor (DOL) has filed a complaint in the U.S. District Court of Colorado against Central Security Communications Inc., CEO Robert Millikin and fiduciary Howard Klinger to restore more than $82,000 owed to the company’s retirement and health plans, as well as additional lost income. The lawsuit also alleges the defendants did not collect delinquent outstanding loan repayments owed to the retirement plan. Read more >
FAQs Outline Investor, Plan Sponsor Rights Under Fiduciary Rule
A new frequently asked questions (FAQs) publication from the Department of Labor (DOL) seeks to inform investors about their rights as consumers of products and services governed by the Employee Retirement Income Security Act (ERISA). The document, in addition, offers an important look into the consumer-protection thinking that has played an important role within the DOL’s fiduciary reform efforts. “After April 10, advisers who are paid to make recommendations about retirement accounts, such as individual retirement accounts [IRAs] and 401(k) accounts, will be treated as fiduciaries,” DOL tells consumers. “This includes advisers who are paid directly by you or paid indirectly through commissions or other payments they may receive from third parties.” Read more >
Small Talk

ON THIS DATE: In 1773, Captain Cook’s Resolution became the first ship to cross the Antarctic Circle. In 1806, James Madison Randolph, grandson of U.S. President Thomas Jefferson, was the first child born in the White House. In 1871, Andrew S. Hallidie received a patent for a cable car system. In 1893, the Kingdom of Hawaii’s monarchy was overthrown when a group of businessmen and sugar planters forced Queen Liliuokalani to abdicate. In 1900, the U.S. took Wake Island where there was in important cable link between Hawaii and Manila. In 1913, all partner interests in 36 Golden Rule Stores were consolidated and incorporated in Utah into one company. The new corporation was the J.C. Penney Company. In 1916, the Professional Golfers Association was formed in New York City. In 1928, the fully automatic, film-developing machine was patented by A.M. Josepho. In 1946, the United Nations Security Council held its first meeting. In 1985, Leonard Nimoy got a star on the Hollywood Walk of Fame. In 2000, British pharmaceutical companies Glaxo Wellcome PLC and SmithKline Beecham PLC agreed to a merger that created the world’s largest drugmaker.

SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “What coverage do you MOST like and what would you like to see more of?” As for PLANSPONSOR magazine, cover stories and the Washington Update sections tied for MOST liked, with 22.7% of responding readers choosing each of them. This was followed by DC, DB and 403(b) Q&As, at 13.6%, and Insights, at 9.1%. As for PLANSPONSOR.com content, Compliance was the MOST liked (39.1%), followed by Data and Research (26.1%). Asked what they would like to see more coverage of, a majority of responding readers (63.6%) selected regulations and litigation. Half chose DC plan design. Basics articles about plan administration or investing issues was chosen by 31.8% of readers, while 27.3% would like more stories about plan sponsor experiences. Among the few readers who left comments about our content, a couple noted that lawsuits and their outcomes were very important to report. Most comments touted our content as a good resource. No Editor’s Choice this week. Thank you to all who participated in the survey. Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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