Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 25th, 2017
Benefits & Administration
Women at retirement age, those between the ages of 60 and 75, understand the components of retirement income far less well than men of the same age, although even men don’t grasp the topic very well, the RICP Retirement Income Literacy Survey from The American College of Financial Services found. Only 18% of women passed the quiz, compared to 35% of men. Read more >
Aon Divests Company Stock from 401(k)
In a Form 11-K filing with the Securities and Exchange Commission (SEC), Aon plc announced the divestment of company stock from the Aon Savings Plan. According to the filing, effective April 1, the Aon Stock Fund was discontinued as an active investment option in the plan. After March 31, participants were not able to contribute or transfer any savings into the Aon Stock Fund. Read more >
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ESOPs Still a Significant Share of Retirement Plans
As of 2014, the most recent year for which data is available, there were 6,717 employee stock ownership plans (ESOPs) in the United States, holding total assets of more than $1.3 trillion, according the National Center for Employee Ownership (NCEO). Since 2010, an average of 229 new ESOPs have been created each year, the NCEO finds. Read more >
Tax Changes Could Entice Small Businesses to Offer Retirement Plans
A significant amount of small businesses lack a retirement plan; however, a new study by LPL Financial suggests certain tax-incentive adjustments could encourage them to change that. Read more >
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Economic Events

Existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors. Only the Midwest saw an increase in sales last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8% to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7% above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Market Mirror

Yesterday, the Dow closed 66.90 points (0.31%) lower at 21,513.17, the NASDAQ closed 23.05 points (0.36%) higher at 6,410.81, and the S&P 500 was down 2.63 points (0.11%) at 2,469.91. The Russell 2000 was up 9.24 points (0.65%) at 1,438.05, and the Wilshire 5000 increased 54.26 points (0.21%) to 25,766.20.

The price of the 10-year Treasury note was down 6/32, increasing its yield to 2.258%. The price of the 30-year Treasury bond decreased 18/32, bringing its yield up to 2.836%.

Compliance
Comments Favor Further Delay of Fiduciary Rule
Friday July 21st marked 15 days since the publication of a Department of Labor (DOL) request for information pertaining to its ongoing expansion and strengthening of the fiduciary standard under the Employee Retirement Income Security Act (ERISA). The short comment period, as laid out in the text of the RFI, applied to Question 1, relating strictly to the idea of delaying the January 1, 2018, applicability date of certain provisions of the expanded fiduciary rule. Many of the public comments submitted so far regarding Question 1 clearly favor further delay in the applicability date for the more laborious requirements of the DOL rulemaking. Read more >
Investing
Delaying the Department of Labor’s (DOL’s) fiduciary rule any further will cost retirement plan savers $7.3 billion over the next 30 years, the Economic Policy Institute maintains. Delays that the Trump administration has already instituted will already cost retirement plan savers $7.6 billion over the next 30 years, according to the Institute. Read more >
Management Change Has No Impact on Fund Performance
Management changes have no effect on fund performance, according to research by Morningstar. The firm says the outflow typically associated with management change is an investor flaw rather than a reflection of the fund’s management style and underlining principles. Morningstar points out that management changes rarely result in changes to the fundamentals of the fund and how it is actually run. The firm embarked on its latest research in following the “catastrophic outflows” associated with “highly publicized management changes—most notably, Bill Gross of PIMCO or Greg Serrurier of Dodge & Cox.” Read more >
Small Talk

ON THIS DATE: In 1805, Aaron Burr visited New Orleans with plans to establish a new country, with New Orleans as the capital city. In 1850, in Worcester, Massachusetts, Harvard and Yale University freshmen met in the first intercollegiate billiards match. In 1850, gold was discovered in the Rogue River in Oregon. In 1861, the Crittenden Resolution, which called for the American Civil War to be fought to preserve the Union and not for slavery, was passed by the U.S. Congress. In 1866, Ulysses S. Grant was named General of the Army. He was the first American officer to hold the rank. In 1868, Congress passed an act creating the Wyoming Territory. In 1941, the U.S. government froze all Japanese and Chinese assets. In 1946, the U.S. detonated an atomic bomb at Bikini Atoll in the Pacific. It was the first underwater test of the device. In 1946, Dean Martin and Jerry Lewis staged their first show as a team at Club 500 in Atlantic City. In 1952, Puerto Rico became a self-governing commonwealth of the U.S. In 1998, the USS Harry S. Truman was commissioned and put into service by the U.S. Navy. In 1999, Lance Armstrong won the Tour de France. He was only the second American to win the race. In 2010, WikiLeaks leaked to the public more than 90,000 internal reports involving the U.S.-led War in Afghanistan from 2004 to 2010.

TRIVIAL PURSUITS: Until the late 1700s, George Washington officially celebrated his birthday on February 11, not February 22. Why did George Washington’s birth date change? 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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