Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 18th, 2016
Compliance
Target Corporation Faces 401(k) Stock Drop Lawsuit
A proposed class action lawsuit filed by a participant in Target Corporation’s 401(k) plan alleges the company violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by continuing to allow participants to invest in the company stock fund when it was no longer prudent. In the complaint, the plaintiff suggests several actions Target could have taken when it knew or should have known its stock price was artificially inflated.Read more >
Fidelity’s Use of Float Income Not Improper
An appellate court ruled that the float income incurred when making distributions to retirement plan participants are not plan assets.Read more >
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Another Schlichter Suit Targets Sponsor and Providers
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Participants Are Saving More With ‘TDF-Plus’ Strategies
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The NQDC Market
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Products, Deals and People
Retirement Industry People Moves
EPIC Advisors names director of client service, and PSCA names new directors.Read more >
Economic Events

The U.S. Census Bureau announced that the combined value of distributive trade sales and manufacturers’ shipments for May, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,291.8 billion, up 0.2% from April, but down 1.4% from May 2015.

Advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $457.0 billion, an increase of 0.6% from the previous month, and 2.7% above June 2015. Total sales for the April through June period were up 2.6% from the same period a year ago. The April to May percent change was revised from up 0.5% to up 0.2%.

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% in June, the same increase as in May, according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.2% in June, the same increase as in May.

Real average hourly earnings decreased 0.2% in June, seasonally adjusted. Average hourly earnings increased 0.1%, and CPI-U increased 0.2%. Real average weekly earnings decreased 0.1% over the month.

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing starts for June. Thursday, the Labor Department will release its initial claims report and the National Association of Realtors will report about existing home sales for June.
Sponsored message from Alger
Alger: Conversations With Tomorrow
The Future of Big Data: Bigger and Smarter.Read more >
Market Mirror

Major U.S. stock indices were little changed Friday. The Dow increased 10.14 points (0.05%) to 18,516.55, the NASDAQ decreased 4.47 points (0.09%) to 5,029.59, and the S&P 500 was down 2.15 points (0.10%) at 2,161.60. The Russell 2000 closed 3.13 points (0.26%) higher at 1,205.30, and the Wilshire 5000 was up 3.05 points (0.01%) at 22,388.88.

On the NYSE, 3.1 billion shares traded, and on the NASDAQ, 2.7 billion shares changed hands, with a slight lead for advancing issues on both exchanges.

The price of the 10-year Treasury note was down11/32, increasing its yield to 1.573%. The price of the 30-year Treasury bond decreased 19/32, bringing its yield up to 2.279%.

WEEK’S WORTH: For the week ending July 15, the Dow gained 2.04%, the NASDAQ was up 1.47%, and the S&P 500 increased 1.49%. The Russell 2000 gained 2.37%, and the Wilshire 5000 finished 1.58% higher.
From the Magazine
PS Coach: Safe Harbor IRAs
In 2004, the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) was amended to include a safe harbor regulation providing the means for a plan sponsor to remove former employees’ small balance accounts—i.e., more than $1,000 and less than or equal to $5,000—from its retirement plan. The strategy: creating an automatic rollover from a participant’s account to an individual retirement account (IRA). What must plan sponsors keep in mind when searching for an appropriate IRA provider?Read more >
Investing
Plan Sponsors Drive Change in Multi-Asset-Class Solutions
Protecting portfolios from “debilitating large-scale losses” and adjusting for the likelihood of rising interest rates remain primary goals of large-scale institutional investors, according to new research from Cerulli Associates. The other most frequently cited goals of institutional investors, including corporate and public retirement plans, will sound familiar to engaged plan sponsors, including “achieving lower asset volatility,” “capturing investments with low or no correlation in returns,” and “raising risk-adjusted returns.” Cerulli finds these factors are driving greater interest and demand for “multi-asset-class solutions strategies,” both on the equity and fixed-income sides of the portfolio.Read more >
Small Talk
ON THIS DATE: In 1927, Ty Cobb set a major league baseball record by getting his 4,000th career hit. He hit 4,191 before he retired in 1928. In 1932, the U.S. and Canada signed a treaty to develop the St. Lawrence Seaway. In 1936, the first Oscar Meyer Wienermobile rolled out of General Body Company’s factory in Chicago. In 1947, U.S. President Truman signed the Presidential Succession Act, which placed the Speaker of the House and the Senate President Pro Tempore next in the line of succession after the vice president. In 1985, Jack Nicklaus II, at age 23 years old, made his playing debut on the pro golf tour at the Quad Cities Open in Coal Valley, Illinois.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “Do you have a Smartphone, how many apps have you downloaded on it, and what is your MOST favorite app and why?” More than 80% of responding readers indicated they have a Smartphone, and 19.6% do not. Ask how many apps they have downloaded on their Smartphones, 8.7% said less than five, 21.7% chose “five to 10,” 8.7% said 11 to 20, and 34.8% chose “more than 20.” Thirteen percent of respondents indicated they’ve downloaded too many to count, and 13% have downloaded none. Repeats in the most favorite apps list included Starbucks, Weather Bug, Kindle, Facebook, FitBit and Google Maps. Most readers favorite apps fell into the weather, music, fitness and games categories. Among those who left general comments about Smartphone apps, quite a few said they loved them or were helpful, but many expressed how they lead people to disconnect and miss out on life. Some are new to using apps and still learning, like the reader who said his/her son downloads all his/her apps and the son says no one older than 45 should be allowed to own a Smartphone. Editor’s Choice goes to the reader who said: “What did we ever do before smartphones? Oh yeah I remember, we called back later when someone wasn’t home, and we played board games with people face-to-face.” Thanks to everyone who responded to the survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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