Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 22nd, 2018
Benefits & Administration
Unbundled Plans Gained Significant Ground in 2017
The proportion of defined contribution (DC) plans that at least partially bundle their services fell dramatically from 53.8% in 2016 to 44.0% in 2017, a continuation of the unbundling trend, according to Callan’s 2018 DC Survey. Today, just 8.8% of “mega plans” with assets greater than $1 billion utilize a fully bundled structure. The research also found most DC plans—including both ERISA-governed plans and those voluntarily seeking to follow the Employee Retirement Income Security Act (ERISA)—seek to be in compliance with ERISA section 404(c).Read more >
Fiduciary Questions Still Stymie In-Plan Income for Many Sponsors
According to Callan’s 2018 DC survey, most DC plan sponsors (79.6%) have taken steps in the recent past to prevent plan leakage, but they have met only moderate success. Some of the more common strategies observed by Callan researchers included offering partial distributions and encouraging rollovers in from other qualified plans, which tied for the most common strategies cited by plan sponsors, both at 56%. Tied to the leakage challenge, Callan reports two-thirds of plans now offer a retirement income solution to employees. Of those that offer in-plan guaranteed income products, 60% are government plans, suggesting corporate America is still somewhat hesitant to turn DC plans into pension-like vehicles for retirees. Plan sponsors cite a number of reasons for being unlikely to offer an annuity-type product in the near term, with top reasons including the belief that it is unnecessary or not a priority, and being uncomfortable or unclear about the fiduciary implications.Read more >
New Financial Audit Rule Increases Requirements for Plan Sponsors
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
Participants Missing the Full Match Remains a Big Problem
2021 Recordkeeping Survey
Parties in Church Plan Lawsuit Finally Get Preliminary Approval of Settlement
Webcast Event
In a very special forum—free and exclusively for plan sponsors—the editors of PLANSPONSOR and PLANADVISER magazines invite you to join industry experts tomorrow as they discuss 2018 retirement trends and regulatory updates.Read more >
2017 DC Survey: Plan Benchmarking
PLANSPONSOR’s 2017 DC Survey found a steady increase over the years in plans offering a Roth deferral feature. While the offering of plan loans remained steady, nearly three in ten DC plan sponsors now offer post-separation loan repayments. The survey found other interesting trends.Read more >
Products, Deals and People
Wolters Kluwer Releases Guide About Tax Reform Effects
A white paper unpacks aspects of the new law that will affect a wide range of retirement, benefits and payroll professionals.Read more >
Retirement Industry People Moves
WEX Health and dailyVest form collaboration for health savings account (HSA) consumers, and FIA promotes consultants and analysts within the firm.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Wednesday, the National Association of Realtors will report about existing home sales in December. Thursday, the Department of Labor will issue its initial claims report, and the Census Bureau will report about new home sales in December. Friday, the Census Bureau will report about durable goods orders for December.
Market Mirror

Friday, the Dow was up 53.91 points (0.21%) at 26,071.72, the NASDAQ closed 40.33 points (0.55%) higher at 7,336.38, and the S&P 500 increased 12.27 points (0.44%) to 2,810.30. The Russell 2000 climbed 20.90 points (1.33%) to 1,597.63, and the Wilshire 5000 gained 167.42 points (0.58%) to finish at 29,152.19.


The price of the 10-year Treasury note was down 9/32, increasing its yield to 2.660%. The price of the 30-year Treasury bond decreased 19/32, bringing its yield up to 2.933%.


WEEK’S WORTH: For the week ending January 19, the Dow climbed 1.04%, the NASDAQ gained 1.04%, and the S&P 500 finished 0.86% higher. The Russell 2000 was up 0.36%, and the Wilshire 5000 increased 0.81%.
Industry Voices
5 Actions to Elevate Your Defined Contribution Plan in 2018
Toni Brown, senior vice president, Retirement Strategy, Capital Group, says a plan sponsor with a clearly defined objective for its defined contribution (DC) plan will be better positioned to make all subsequent decisions. Brown’s team identified five actions plan sponsors can take in 2018 to truly elevate their DC plans.Read more >
From the Magazine
Choosing The Right Adviser
Getting independent expert investment help can be key to satisfying a retirement plan committee’s fiduciary duties with respect to selecting the plan’s investment options. Investment help may be in the form of a nondiscretionary 3(21) investment adviser or a discretionary 3(38) investment manager. In their last column, attorneys with Drinker, Biddle & Reath discussed the factors to consider when deciding on which type of expert to use. Once that decision has been made, the next question is how do you select the appropriate provider?Read more >
Small Talk
ON THIS DATE: In 1874, a patent was issued to Samuel W. Francis for the spork. In 1879, James Shields began a term as a U.S. Senator from Missouri. He had previously served Illinois and Minnesota. He was the first Senator to serve three states. In 1889, the Columbia Phonograph Company was formed in Washington, D.C. In 1895, the National Association of Manufacturers was organized in Cincinnati, Ohio. In 1901, Queen Victoria of England died after reigning for nearly 64 years. Edward VII, her son, succeeded her. In 1903, the Hay-Herrán Treaty was signed by United States Secretary of State John M. Hay and Colombian Chargé Dr. Tomás Herrán. The treaty granted the United States rights to the land proposed for the Panama Canal. In 1947, KTLA, Channel 5, in Hollywood, California, began operation as the first commercial television station west of the Mississippi River. In 1961, Wilma Rudolph, set a world indoor record in the women’s 60-yard dash. She ran the race in 6.9 seconds. In 1968, “Rowan & Martin’s Laugh-In”, debuted on NBC TV. In 1970, the first regularly scheduled commercial flight of the Boeing 747 began in New York City and ended in London about 6 1/2 hours later. In 1973, Joe Frazier lost the first fight of his professional career to George Foreman. He had been the undefeated heavyweight world champion since February 16, 1970, when he knocked out Jimmy Ellis. In 1984, Apple introduced the Macintosh during the third quarter of Super Bowl XVIII. In 1997, the U.S. Senate confirmed Madeleine Albright as the first female secretary of state. In 1998, Theodore Kaczynski pled guilty to federal charges for his role as the Unabomber. He agreed to life in prison without parole. In 2002, Kmart Corp. filed for Chapter 11 bankruptcy making it the largest retailer in history to seek legal protection from its creditors.
SURVEY SAYS RESPONSES: In April, PLANSPONSOR magazine will celebrate its 25th birthday. Last week, I asked NewsDash readers, “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?” The No. 1 pick for developments in the retirement industry respondents think has been THE MOST effective for improving retirement outcomes is the adoption of automatic enrollment for defined contribution (DC) plans (48.9%). This is followed by the increase in the move to daily valuation of retirement plans from monthly, quarterly, annual, and the focus on financial wellness education, each chosen by 10.6% of respondents. As for developments in the retirement industry respondents think has been THE LEAST effective for improving retirement outcomes, the top selection was increase in move from defined benefit (DB) plans to DC plans (45.6%), followed by increase in pension transfers to insurance companies (17.4%) and increased focus on retirement income options by regulators (10.9%). In verbatim responses, some readers elaborated on why they chose what they did for the MOST effective retirement industry development, and some elaborated on why they selected what they did for the LEAST effective. Many thanks to those who left birthday wishes. Editor’s Choice goes to the reader who said: “Many positives in last 5 years, more awareness. Enjoy this publication.” A big thank you to all who responded to the survey!Read more >
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Editorial: Alison Cooke Mintzer


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