Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 19th, 2016
Benefits & Administration
Reasons Behind DB Plan Cost-Cutting Trends
What is driving DB plan sponsors to freeze their plans or change accounting methods, and is there anything that can be done about ballooning costs for these plans?Read more >
Employers Can Expect Health Costs Four Times Inflation
The 2016 medical trend rate in North America is estimated at 5.8%, while the annual general inflation rate is 1.5%, according to an Aon Hewitt report. “We expect medical costs to continue to escalate around the world due to global population aging, overall declining health, poor lifestyle habits particularly in emerging countries, continued cost shifting from social programs and an increase in utilization of employer-sponsored health plans,” says Wil Gaitan, senior vice president and global consulting actuary at Aon Hewitt.Read more >
MOST READ ARTICLES
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2020 Recordkeeping Survey
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The NQDC Market
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CARES Act Considerations: CRDs, RMDs, Taxes and More
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2020 Best in Class DC Providers
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FRIDAY FUN - February 26, 2021
Products, Deals and People
Retirement Industry People Moves
Aon Hewitt adds to investment consulting team; The Retirement Advantage acquires a TPA; and more.Read more >
Pension Buyout Guide Weighs Lump-Sum vs. Annuities
A new guide from the Consumer Financial Protection Bureau charts the complex twists and turns involved in a pension buyout—especially the trade-offs individuals face between lump sums and lifetime payouts.Read more >
Sponsored message from MetLife
Stable Value vs. Money Market Funds
Stable value solutions and illustrations of historical risk/return comparisons of the Met Managed GIC against money market funds.Read more >
RFP Request
The Orange County Employees Retirement System (OCERS) in Santa Ana, California has posted its request for proposals (RFP) for a five-year General Investment Consultant engagement on its Web site at www.ocers.org. The bid deadline is February 29. A pre-bid teleconference will be conducted on January 26. Bidders must register their interest to receive further information, by sending a formal request for the RFP document to RFP4GIC@ocers.org.
Economic Events

The Producer Price Index (PPI) for final demand decreased 0.2% in December 2015, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices increased 0.3% in November and fell 0.4% in October. On an unadjusted basis, the final demand index fell 1.0% in 2015, after rising 0.9% in 2014.

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for November 2015, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,313.5 billion, down 0.2% from October 2015 and down 2.8% from November 2014.

Advance estimates of U.S. retail and food services sales for December 2015, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $448.1 billion, a decrease of 0.1% from the previous month, and 2.2% above December 2014. Total sales for the 12 months of 2015 were up 2.1% from 2014.

THE ECONOMIC WEEK AHEAD: Tomorrow, the Bureau of Labor Statistics will reveal the consumer price index for December 2015, and the Census Bureau will report about housing starts in December. Thursday, the Department of Labor will issue its initial claims report, and Friday, the National Association of Realtors will report about existing home sales for December.
Market Mirror

Major U.S. stock indices tumbled again Friday, with news reports saying U.S. stocks have posted their worst 10-day calendar start in history. The Dow plunged 390.97 points (2.39%) to 15,988.08, the NASDAQ fell 126.59 points (2.74%) to 4,488.42, and the S&P 500 shed 41.51 points (2.16%) to finish at 1,880.33. The Russell 2000 closed 17.92 points (1.75%) lower at 1,007.74, and the Wilshire 5000 plummeted 415.04 points (2.11%) to 19,221.58.

On the NYSE, 3.1 billion shares changed hands, and on the NASDAQ, 2.7 billion shares traded, with declining issues outnumbering advancing issues nearly 5 to 1 on both exchanges.

The price of the 10-year Treasury note increased 15/32, bringing its yield down to 2.038%. The price of the 30-year Treasury bond climbed 1 18/32, decreasing its yield to 2.815%.

WEEK’S WORTH: For the week ending January 15, the Dow was down 2.19%, the NASDAQ lost 3.34%, and the S&P 500 decreased 2.20%. The Russell 2000 fell 3.68%, and the Wilshire 5000 finished 2.46% lower.
Compliance
SCOTUS Passes on ERISA Plan Lawsuit Venue Case
A lack of circuit court conflict has the Supreme Court passing on an important question related to qualified retirement plans: Can venue restriction clauses be enforced under the spirit of ERISA?Read more >
Barry’s Pickings Online
Barry’s Pickings Online: The Punishment of the Innocent
Michael Barry, president of the Plan Advisory Services Group, questions the logic of the complaint against Intel, accusing plan fiduciaries of breaching their Employee Retirement Income Security Act (ERISA) duty of prudence by investing target-date fund (TDF) assets in hedge funds and private equity, and contends that litigation could discourage innovation in defined contribution (DC) plan investing.Read more >
Small Talk
ON THIS DATE: In 1793, King Louis XVI was tried by the French Convention, found guilty of treason and sentenced to the guillotine. In 1825, Ezra Daggett and Thomas Kensett of New York City patented a canning process to preserve salmon, oysters and lobsters. In 1861, Georgia seceded from the Union. In 1883, Thomas Edison’s first village electric lighting system using overhead wires began operation in Roselle, New Jersey. In 1907, the first film reviews appeared in “Variety” magazine. In 1915, George Claude, of Paris, France, patented the neon discharge tube for use in advertising signs. In 1937, Howard Hughes set a transcontinental air record. He flew from Los Angeles to New York City in 7 hours, 28 minutes and 25 seconds. In 1944, the U.S. federal government relinquished control of the nation’s railroads after the settlement of a wage dispute. In 1949, the salary of the President of the United States was increased from $75,000 to $100,000 with an additional $50,000 expense allowance for each year in office. In 1953, 68% of all TV sets in the U.S. were tuned to CBS-TV, as Lucy Ricardo, of “I Love Lucy,” gave birth to a baby boy. In 1955, U.S. President Eisenhower allowed a filmed news conference to be used on television (and in movie newsreels) for the first time. In 1981, the U.S. and Iran signed an agreement paving the way for the release of 52 Americans held hostage for more than 14 months and for arrangements to unfreeze Iranian assets and to resolve all claims against Iran. In 2013, in Scottsdale, Arizona, the original Batmobile for the TV series “Batman” sold at auction for $4.6 million. It was the first of six Batmobiles produced for the show.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “What award have you been given that you value the most?” More than 96% of respondents have been given an award for something they’ve accomplished, and 3.4% have not. For 14.3% of respondents their most valued award was related to sports, for 25% it was related to work, and for 14.3% it was related to community efforts. For 10.7%, their most valued award was related to arts, and for 10.7%, it was related to academics. One-quarter of respondents chose “other,” and those categories included family and parenting, military service and human resources. Many respondents agreed to share what was the award they received that is their most valued. In verbatim comments, readers shared what makes awards special and several expressed dismay at the new trend of giving out “participation” awards. Editor’s Choice goes to the reader who said: “I really think that many people/organizations consider an award as beating out another when in reality it means that you have achieved something in your quest to reach your goal(s).” Much thanks to all who participated in our survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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