Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 9th, 2018
Benefits & Administration
Tax Reform Fuels DB Plan Accelerated Funding
Since, under tax reform, the corporate tax rate will be lower in the future than what had previously been in effect, more voluntary defined benefit (DB) plan contribution activity is expected, according to Michael A. Moran, managing director and chief pension strategist with Goldman Sachs Asset Management (GSAM). In addition, he says changes to repatriation rules under tax reform may make foreign cash more accessible for U.S. multi-nationals, which may enable them to continue to make voluntary contributions in the future. Increased contribution activity leads to higher funded ratios which may be a catalyst for more de-risking activities, according to Moran. However, a borrow-to fund strategy might not be as compelling as before. Read more >
Investing
J.P. Morgan Warns Long-Term Investment Outlook Is Muted
J.P. Morgan Asset Management’s updated global market growth assumptions for 2018, penned by Anne Lester, head of U.S. retirement solutions for global asset management solutions, and Dan Oldroyd, portfolio manager and head of target-date strategies, warns that many market participants are likely pleased with year-to-date results from their retirement accounts, but the outlook for market returns over the next 10 to 15 years “remains less than inspiring.” They say, “Saving more is the most obvious and effective way to improve retirement outcomes.” Read more >
MOST READ ARTICLES
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Financial Wellness Programs Boost Engagement and Loyalty
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4
$280K Is What a Couple Retiring This Year Will Need to Cover Health Care
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Hearing Witnesses Lay Out How Multiemployer Pensions Got Where They Are
Mercer Offers Focus Tips for E&F Investment Committees
Among tips Mercer suggests is evaluating litigation vulnerability at a time when lawsuits against higher education 403(b) plan sponsors are higher than ever. Read more >
Market Mirror

Yesterday, the Dow was down 12.87 points (0.05%) at 25,283.00, the NASDAQ closed 20.83 points (0.29%) higher at 7,157.39, and the S&P 500 was up 4.56 points (0.17%) at 2,747.71. The Russell 2000 increased by 1.80 points (0.12%) to 1,561.81, and the Wilshire 5000 gained 62.97 points (0.22%) to finish at 28,503.52.

 

The price of the U.S. Treasury note was down 1/32, increasing its yield to 2.480%. The price of the 30-year Treasury bond decreased 3/32, bringing its yield up to 2.813%.

Compliance
Bill Intends to Offer More Explicit Safe Harbor for Selecting Annuity Providers
U.S. Representatives Tim Walberg, R-Michigan, and Lisa Blunt Rochester, D-Delaware, introduced H.R. 4604, the Increasing Access to a Secure Retirement Act. The bipartisan bill clarifies and strengthens existing rules to make it easier for retirement plan sponsors to provide guaranteed lifetime income products as part of their employee benefits. It intends to amend the Employee Retirement Income Security Act (ERISA) and lays out specific criteria for selecting an annuity benefit provider. Read more >
Retirement Funds Among Targets of Securities Fraud
Brokers serving retirement plans and other institutional investors were accused of routing orders for equities to an offshore affiliate in Bermuda that “executed them on a riskless basis and opportunistically boosted profits by adding a mark-up or mark-down on the price of a security.” Read more >
Small Talk

ON THIS DATE: In 1793, Jean-Pierre Blanchard made the first successful balloon flight in the U.S. In 1788, Connecticut became the 5th state to join the United States. In 1848, the first commercial bank was established in San Francisco. In 1861, the state of Mississippi seceded from the United States. In 1894, the New England Telephone and Telegraph Company put the first battery-operated switchboard into operation in Lexington, Massachusetts. In 1936, the United States Army adopted use of the semi-automatic rifle. In 1951, the United Nations headquarters officially opened in New York City. In 1991, U.S. secretary of state James Baker and Iraqi foreign minister Aziz met for 61/2 hours in Geneva, but failed to reach any agreement that would forestall war in the Persian Gulf. In 2002, the U.S. Justice Department announced it was pursuing a criminal investigation of Enron Corp. The company had filed for bankruptcy on December 2, 2001. In 2006, Matthew Broderick and Nathan Lane received stars on the Hollywood Walk of Fame in a dual ceremony. In 2007, Steve Jobs, Apple Inc.’s CEO, announced the first generation iPhone.

TRIVIAL PURSUITS: Watching a marathon of one of my favorite shows on New Year’s Day, I learned an interesting tidbit. Who holds the most Emmy awards for drama writing? Read more >
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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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