Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 2nd, 2018

Editor’s Note: In this edition of NewsDash, we present the most read stories of 2017.
Benefits & Administration
Americans Lack Awareness of HSA Benefits
As America’s health insurance industry struggles through a state of uncertainty and Americans face rising health care costs, employers are turning to various strategies to help employees cover medical expenses. One increasingly popular option is the health savings account (HSA), available to employees with high deductible health plans (HDHP). These products help people save and invest for current and future medical expenses. However, new research by Fidelity Investments suggests many Americans are unaware of the various benefits HSAs can offer. Read more >
Social Security Reform Should Consider Life Expectancy Gap
Researchers found that for those born in 1960, there is a $130,000 gap in benefits between the highest and lowest socioeconomic groups. Read more >
Older Workers Unable to Retire Cost Employers $50,000 a Year
Because many employers are unaware of the cost of having older workers unable to retire, or think they cannot calculate it, Prudential Financial has done the analysis and published its findings in the report, “Why Employers Should Care About the Cost of Delayed Retirements.” For each individual who cannot retire, the cost averages an extra $50,000 a year, representing the difference between the salary of an older worker and hiring a younger person, according to Prudential. Read more >
MOST READ ARTICLES
1
Retirement Industry People Moves
2
HSA Amendment Bills Moved to U.S. House
3
2017 Recordkeeping Survey
4
Proposed Bill Would Allow Employers to Provide Side-Car Emergency Savings Accounts
5
Missing Inaction
Products, Deals and People
Fidelity Launches Personal Retirement Score
Fidelity Investments has introduced a new, personal Retirement Score. As Fidelity puts it, “Every individual’s retirement vision is unique, and every ‘someday’ starts with a plan. One of the first steps to creating a plan is to know where you stand on the retirement preparedness spectrum and whether you are on track to meet your goals.” Read more >
Blackstone to Acquire Aon Hewitt’s Benefits and HR Administration Platform
Private equity funds affiliated with Blackstone, an investment firm, have entered into a definitive agreement to acquire Aon plc’s technology-enabled benefits and human resources administrative platform, currently part of Aon Hewitt. According to the announcement, the business is the largest benefits administration platform in the United States, and a leading services provider for cloud-based HR management systems. It serves approximately 15% of the U.S. working population across more than 1,400 companies. Aon and the new, stand-alone company—now called Alight Solutions—will continue to work together on behalf of shared clients and prospects. Read more >
Economic Events

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about construction spending for November. Thursday, the Labor Department will issue its initial claims report. Friday, the Bureau of Labor Statistics will reveal the unemployment rate for December and the Census Bureau will report about factory orders for November.

Market Mirror

Friday, the Dow dropped 118.29 points (0.48%) to finish at 24,719.22, the NASDAQ closed 46.77 points (0.67%) lower at 6,903.39, and the S&P 500 decreased 13.93 points (0.52%) to 2,673.61. The Russell 2000 fell by 13.41 points (0.87%) to 1535.51, and the Wilshire 5000 dropped 126.78 points (0.45%) to 27,794.17.  

 

The price of the 10-year Treasury note increased 7/32, lowering its yield to 2.410%. The price of the 30-year Treasury bond was up 8/32, decreasing its yield to 2.743%.

 

WEEK’S WORTH: For the week ending December 29, the Dow finished 0.14% lower, the NASDAQ was down 0.81%, and the S&P 500 decreased 0.36%. The Russell 2000 lost 0.48%, and the Wilshire 5000 was down 0.25%.

Compliance
401(k) Nondiscrimination Tests Explained
Even though nondiscrimination testing is likely performed by a plan’s recordkeeper or third-party administrator (TPA), plan sponsors need to understand the basics of the tests, including the types of contributions that are tested, the methods used and the consequences of failing. Read more >
Aon Hewitt Targeted in Kickback Lawsuit Filed by Caterpillar Plan
The latest example of Employee Retirement Income Security Act (ERISA) industry litigation targets Aon Hewitt for, in the words of plaintiffs, permitting excessive fees to be paid and then taking kickbacks. The central claims in the proposed class action suggest plaintiffs feel they overpaid significantly for the services provided by Financial Engines, with the excess payments essentially amounting to kickbacks returned to Aon Hewitt Financial Advisors, Hewitt Financial Services and Hewitt Associates. Read more >
TIAA Faces Suit Over 403(b) Plan Participant Loans
A new lawsuit argues the practices used by the Teachers Investment and Annuity Association (TIAA) to credit portions of interest payments made by participants on loans taken from their own retirement accounts back to the firm—rather than to the borrowing participant—violate the Employee Retirement Income Security Act (ERISA). Read more >
Halt of Fiduciary Rule Could Mean More Work for Plan Sponsors
Industry experts have opined that if the Department of Labor (DOL) fiduciary rule is rolled back, it would actually put more pressure, not less, on plan sponsors to ensure they are meeting their own required duties. Read more >
Small Talk

ON THIS DATE: In 1788, Georgia became the 4th state to ratify the U.S. Constitution. In 1842, in Fairmount, Pennsylvania, the first wire suspension bridge was opened to traffic. In 1882, the Standard Oil Trust agreement was completed and dated. The document transferred the stock and property of more than 40 companies into the control of nine trustees lead by John D. Rockefeller. This was the first example of what became known as a holding company. In 1890, Alice Sanger became the first female White House staffer. In 1892, Ellis Island opened as America’s first federal immigration center. Annie Moore, at age 15, became the first person to pass through. In 1910, the first junior high school in the United States opened. McKinley School in Berkeley, California, housed seventh and eighth grade students. In 1929, the United States and Canada reached an agreement on joint action to preserve Niagara Falls. In 1935, Bruno Richard Hauptmann went on trial for the kidnap-murder of Charles Lindbergh’s baby. Hauptmann was found guilty and executed. In 1965, “Broadway” Joe Namath signed the richest rookie contract ($400,000) in the history of pro football. In 1971, in the U.S., a federally imposed ban on television cigarette advertisements went into effect. In 1974, U.S. President Richard M. Nixon signed a bill requiring all states to lower the maximum speed limit to 55 MPH. The law was intended to conserve gasoline supplies during an embargo imposed by Arab oil-producing countries. In 1983, the musical “Annie” closed on Broadway at the Uris Theatre after 2,377 performances.

 

 

TRIVIAL PURSUITS: Not this week.

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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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