Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 23rd, 2018
Investing
TDFs Have Improved Participant Diversification
Jeff Kletti, head of investments at Wells Fargo Institutional Retirement and Trust, sat down recently with PLANSPONSOR to offer an inside look at trends and challenges taking shape within the company’s sizable defined contribution (DC) plan book of business. Among various topics, the conversation focused in large part on plan sponsors’ embrace of passive target-date funds (TDFs), and how this trend includes some important points of subtlety that go beyond “active versus passive.” Kletti also took time to highlight the way retirement plan participants have, tied to the popularity of automatic enrollment into target-date funds, significantly improved the diversification of their retirement accounts. Read more >
Greater Use of Passive Funds Built Directly on TDF Popularity
Looking at the asset flow data provided by Wells Fargo, there is very little money going into passive standalone funds defined contribution plan sponsors are adding to their plans. Jeff Kletti, head of investments at Wells Fargo Institutional Retirement and Trust, says a number of factors are behind this—first that the investment lineup changes have been additions to plan menus, rather than replacement-reroutes, or “mappings,” as the DC industry parlance goes. “That approach, of actively mapping participants out of active options into passive options, is still rare on our platform at this stage,” Kletti confirms. “So, the point is, that these active-versus-passive trends are playing out with more subtlety than it might first appear. Virtually all of the ongoing flows into passive funds in our book of business have been coming from within the target-date fund context, not from stand-alone index funds.” Read more >
MOST READ ARTICLES
1
House Committee Advances Bill to Establish Union Pension Lifeline Program
2
The Senate Math That Could Block SECURE Act
3
Open MEPs Not for Every Plan Sponsor
4
Adidas Sued Over Excessive Fees for 401(k) Participants
5
Employers Encouraged to Offer Multi-Dimensional Wellness Programs
From the Magazine
Future Shock
The first article in our new Behavioral Finance department in PLANSPONSOR magazine discusses how Millennials prioritize short-term financial goals over retirement saving, and what can be done to address this. Read more >
Market Mirror

Yesterday, the Dow increased 142.88 points (0.55%) to 26,214.60, the NASDAQ climbed 71.65 points (0.98%) to 7,408.03, and the S&P 500 closed 22.7 points (0.81%) higher at 2,832.97. The Russell 2000 was up 7.54 points (0.47%) at 1,605.16, and the Wilshire 5000 gained 240.48 points (0.82%) to finish at 29,392.67.

 

The price of the 10-year Treasury note was unchanged, with its yield at 2.660%. The price of the 30-year Treasury bond was up 8/32, decreasing its yield to 2.922%.

Benefits & Administration
Many DC Plan Sponsors Reduced Fees in 2017
Following their most recent fee review about four in ten defined contribution plan sponsors (40.5%) reduced fees, according to the 2018 Callan Defined Contribution Trends Survey. Callan says this is a notable increase from prior years (31.6% did so in the prior year’s survey). The survey also finds a drop in revenue sharing used to pay plan fees, and that half of DC plan sponsors plan to renegotiate fees with providers in 2018. Read more >
Compliance
Third Complaint Against NYU 403(b) Plan Adds Adviser as Defendant
Participants in New York University’s (NYU) retirement plans have filed a Third Amended Complaint, for the first time naming Cammack LaRhette Advisors as a defendant in the lawsuit. The new complaint says Cammack LaRhette Advisors—now known as Cammack Retirement Group—has served as investment adviser to the plans since 2009. The plaintiffs contend Cammack is a fiduciary to the plan because it rendered investment advice for a fee. Allegations against Cammack contend it gave “flawed advice” to plan fiduciaries regarding investments, which Cammack denies. Read more >
Small Talk

ON THIS DATE: In 1789, Georgetown College was established as the first Catholic college in the U.S. In 1845, the U.S. Congress decided all national elections would be held on the first Tuesday after the first Monday in November. In 1849, English-born Elizabeth Blackwell became the first woman in America to receive medical degree. It was from the Medical Institution of Geneva, New York. In 1907, Charles Curtis, of Kansas, began serving in the United States Senate. He was the first American Indian to become a U.S. Senator. He resigned in March of 1929 to become U.S. President Herbert Hoover’s Vice President. In 1943, Duke Ellington and his band played for a black-tie crowd at Carnegie Hall in New York City for the first time. In 1964, ratification of the 24th Amendment to the U.S. Constitution was completed. This amendment eliminated the poll tax in federal elections. In 1971, in Prospect Creek Camp, Alaska, the lowest temperature ever recorded in the U.S. was reported as minus 80 degrees. In 1973, U.S. President Nixon announced that an accord had been reached to end the Vietnam War. In 1989, surrealist artist Salvador Dali died in Spain at age 84.

TRIVIAL PURSUITS: What is the English word for the central walkway in a church, down which a bride walks? Read more >
Share the news with a friend! Pass the NewsDash along and tell your friends/associates they can sign up for their own copy. Read more >

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

Subscribe to NEWSDash, click here .

To unsubscribe, click here.

BrightScope / CIO / FWW / Investor Economics / LiquidMetrix / Market Metrics / Matrix Solutions / PLANADVISER / Plan For Life / PLANSPONSOR / Simfund