Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 18th, 2018
Benefits & Administration
A Retirement Draw Down Strategy Starts With Education
As more and more retirement plan participants are depending on defined contribution (DC) plans to save for a comfortable retirement, they not only must make decisions regarding saving and investment strategies, but they must also decide on a withdrawal strategy for retirement. Without a strategy, retirees my want to withdraw as much as possible to support their pre-retirement lifestyle; however, resources may fall short of maintaining this lifestyle, particularly with increased life expectancies. Education about how much income is needed, what expenses to expect and how to create an income stream are important, retirement industry sources say. Read more >
Verizon Pensioners Still Want to Recoup ERISA Protections
Back in February 2015, the pension risk transfer by Verizon of the assets of tens of thousands of former Bell Atlantic employees to Prudential grabbed a significant amount of retirement plan industry attention. The main worry of the retirees, as Jack Cohen, Association of BellTel Retirees chairman, told PLANSPONSOR at the time, was that their billions of dollars in income annuities would be less well-protected than they would be if they remained Employee Retirement Income Security Act (ERISA)-covered benefits. In a new conversation with Cohen, he says they are still concerned with trying to recoup at least some of the protections that they had under ERISA and that his association and others warned the Pension Benefit Guaranty Corporation (PBGC) that risk transfers would harm the insurance system. Read more >
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Those Close To and In Retirement Still Feeling Unprepared
The Society of Actuaries (SOA) ninth biennial Risks and Process of Retirement Survey identified an overall increase in consumers’ level of concern for their finances both prior to and during retirement in 2017. The survey revealed that inflation, health care and retirement costs rank as Americans’ top retirement concerns. A significant number of retirees and pre-retirees report that they feel unprepared to navigate financial shocks and unexpected expenses. Read more >
Millennials May Have Wrong Expectations About Retirement
One-third of Millennials say they plan to save $200,000 or less to be comfortable in retirement; they only expect to live to age 81; and very few feel they will end up in an assisted living facility, according to a survey. Read more >
Market Mirror

Wednesday, the Dow climbed 322.79 points (1.25%) to 26,115.65, the NASDAQ gained 74.59 points (1.03%) to finish at 7,298.28, and the S&P 500 closed 26.14 points (0.94%) higher at 2,802.56. The Russell 2000 was up 13.69 points (0.87%) at 1,586.66, and the Wilshire 5000 increased 264.84 points (0.92%) to 29,047.16.

 

The price of the 10-year Treasury note was down 11/32, increasing its yield to 2.577%. The price of the 30-year Treasury bond decreased 12/32, bringing its yield up to 2.848%.

Compliance
University of Chicago 403(b) Suit Gets Claims Added Back
What the University of Chicago may have seen as a small win in the lawsuit alleging fiduciary violations of the Employee Retirement Income Security Act (ERISA) in the administration of its 403(b) plans was short-lived, based on a new federal district court decision. A federal judge had dismissed claims related to one of the university’s plans, but a new complaint, and a new plaintiff, bring back those claims. Read more >
Small Talk

ON THIS DATE: In 1778, English navigator Captain James Cook discovered the Hawaiian Islands, which he called the “Sandwich Islands.” In 1896, the x-ray machine was exhibited for the first time. In 1919, the World War I Peace Congress opened in Versailles, France. In 1939, Louis Armstrong and his orchestra recorded “Jeepers Creepers.” In 1957, the first, non-stop, around-the-world, jet flight came to an end at Riverside, California. The plane was refueled in mid-flight by huge aerial tankers. In 1958, Willie O’Ree made his NHL debut with the Boston Bruins. He was the first black player to enter the league. In 1991, Eastern Airlines shut down after 62 years in business due to financial problems. In 1993, the Martin Luther King Jr. holiday was observed in all 50 U.S. states for the first time. In 1995, the “yahoo.com” domain was created.

SURVEY SAYS: In April, PLANSPONSOR magazine will celebrate its 25th birthday. This week, I’d like to know, which retirement industry development over the past 25 years do you think has been the most effective for improving retirement outcomes and which do you think has been the least effective? You may respond to this week’s 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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