Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 19th, 2018
Benefits & Administration
Study Proposes a “Simple” Strategy for Retirement Income
A new retirement study by the Stanford Center on Longevity, conducted in conjunction with the Society of Actuaries, “Optimizing Retirement Income by Integrating Retirement Plans, IRAs, and Home Equity,” presents a framework of analyses and methods that plan sponsors, financial advisers, and retirees can use to compare and assess strategies for developing lifetime retirement income. A strategy that enables delaying Social Security until age 70 and uses the Internal Revenue Service (IRS) required minimum distribution (RMD) to calculate income from savings produces a reasonable tradeoff among various retirement income goals for middle-income retirees, the researchers note. “We’re not suggesting things that take a lot of expense—the strategy uses existing tools plan sponsors have as well as existing capabilities of providers,” Steve Vernon, a research scholar at the Stanford Center on Longevity, tells PLANSPONSOR.Read more >
2017 DC Survey: Plan Benchmarking
By using the 2017 PLANSPONSOR DC Survey, retirement plan sponsors can compare different metrics of their plan to the averages in their industries.Read more >
Products, Deals and People
Investment Products and Services Launches
American Century releases first exchange-traded funds (ETFs), and Putnam reveals two environmental, social and governance (ESG) fund offerings.Read more >
2021 DC Plan Benchmarking Survey
Working Past Age 65 May Seem Like a Great Idea …
2022 Retirement Industry Trends to Follow
TRIVIAL PURSUITS: Residents of the Island of Misfit Toys
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
Economic Events

Privately-owned housing starts in December 2017 were at a seasonally adjusted annual rate of 1,192,000, the Census Bureau announced. This is 8.2% below the revised November estimate of 1,299,000 and is 6.0% below the December 2016 rate of 1,268,000. Single-family housing starts in December were at a rate of 836,000; this is 11.8% below the revised November figure of 948,000. The December rate for units in buildings with five units or more was 352,000. An estimated 1,202,100 housing units were started in 2017. This is 2.4% above the 2016 figure of 1,173,800.

In the week ending January 13, the advance figure for seasonally adjusted initial claims for unemployment insurance was 220,000, a decrease of 41,000 from the previous week’s unrevised level of 261,000, the Labor Department reported. This is the lowest level for initial claims since February 24, 1973 when it was 218,000. The four-week moving average was 244,500, a decrease of 6,250 from the previous week’s unrevised average of 250,750.

The average interest rate for a 15-year fixed-rate mortgage is 4.04%, up from 3.99% one week ago, according to Freddie Mac. The average interest rate for a 30-year fixed-rate mortgage is 3.49%, up from 3.44%.

Market Mirror

Thursday, the Dow lost 97.84 points (0.37%) to finish at 26,017.81, the NASDAQ was down 2.23 points (0.03%) at 7,296.05, and the S&P 500 decreased 4.53 points (0.16%) to 2,798.03. The Russell 2000 fell 9.93 points (0.63%) to 1,576.73, and the Wilshire 5000 closed 62.39 points (0.21%) lower at 28,984.77.

The price of the 10-year Treasury note was down 8/32, increasing its yield to 2.616%. The price of the 30-year Treasury bond fell 25/32, bringing its yield up to 2.896%.

Participants Made Record-Low Number of Trades in 2017
Part of the very light trading activity can be explained by the prevalence of target-date funds (TDFs), the largest asset class in the Alight Solutions 401(k) index.Read more >
NYC Pension Fossil Fuel Divestment Sparks ‘Modern ESG’ Investing Debate
The end of 2017 and the first few weeks of 2018 brought a renewal in the longstanding debate surrounding the merits of environmental, social and governance (ESG) investing programs enacted by public and private pension plans. Case in point is the series of sharply written, dueling reports in which experts from the American Council for Capital Formation (ACCF) and CalPERS debate the proper role of environmentally and socially conscious investments—and whether the massive California public pension fund has grown too political in its actions. On the East Coast the debate has fired up as well, prompted by New York City Mayor Bill de Blasio, Comptroller Scott Stringer and other trustees of the city’s $189 billion pension funds.Read more >
Small Talk

ON THIS DATE: 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 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 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 1955, U.S. President Dwight 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 2006, NASA’s New Horizons spacecraft was launched. The mission was the first to investigate Pluto. 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: We have a decent number of response to our survey this week, but we want more. 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? Responses to the survey will be included in the February/March edition of PLANSPONSOR magazine.Read more >

And now it’s time for FRIDAY FILES!


You never know what’s under the leaf pile.Read more >
You think it’s been cold where you are? In the Yakutia region of Russia, temperatures hit minus 67 degrees Celsius (minus 88.6 degrees Fahrenheit) in some areas. The Associated Press reports that students routinely go to school even in minus 40 degrees. But school was canceled Tuesday throughout the region and police ordered parents to keep their children inside. On social media, women posted pictures of their frozen eyelashes. [pic]Read more >
In Santa Ana, Calfiornia, a speeding car soared off a median divider and into a second-floor dental office. The vehicle lodged there as cops and rescuers arrived to extinguish a small fire and help extract one of the occupants, the Orange County Fire Authority noted in a series of tweets. Another car occupant exited unassisted. Both had minor injuries. Authorities say the driver had been using drugs. [pic]Read more >

In New Jersey, better think before taking that drink prior to flying a drone. New Jersey Governor Chris Christie signed a law making it illegal to fly an unmanned drone aircraft after too many drinks, a spokesman said on the Republican’s last day in office. The law prohibits flying a drone with a blood alcohol content of 0.08% or higher, the same as for driving a vehicle, or while drugged. Violators face up to six months in jail, a $1,000 fine or both. The measure also bars flying a drone near a prison or in pursuit of wildlife.


In Prince William County, Virginia, a woman exited a 7-Eleven convenience store when two men, one with a handgun, approached and demanded her vehicle. According to the Associated Press, police say the woman struck one man with her bag before her 22-year-old daughter threw her hot chocolate toward both men, who then fled on foot.


In Seymour, Connecticut, a man walked into a bank and handed the teller a note. “This is a robbery, give me 5,000 nobody gets shot,” it read, according to the Valley Independent. The teller gave $500 cash to the man. But, it didn’t take long for detectives to find him after discovering the note he left at the bank was written on the back of his girlfriend’s pay stub. They went to the girlfriend’s home address and caught the man as he was trying to leave.


Have a great weekend!

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Editorial: Alison Cooke Mintzer


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