Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 26th, 2017
Benefits & Administration
In a new report, “Design Matters,” the Defined Contribution Institutional Investment Association (DCIIA) analyzes what is working in defined contribution (DC) plans and if additional legislation could strengthen them further. DCIIA concludes that plans have the tools they need to get workers prepared for retirement—they just need to use them more vigorously. Read more >
Investment Manager and Recordkeeper Changes Driven by Fees
The desire to reduce
fees is the top reason DC plan sponsors cite for contemplating changes in
investment managers and recordkeepers, according to findings from Retirement
Planscape, an annual Cogent Reports study by Market Strategies International.
The report also found sponsors are looking to award new investment business to
managers they are already working with to add more investment options to
strengthen bargaining power, and the top DC plan recordkeepers are facing some
competition. Read more >
MOST READ ARTICLES
1
J.P. Morgan Agrees to Settle Stable Value Funds Suit
2
SECURE Act Passes House, Bringing Calls for Senate Collaboration
3
Individuals, Employers and Government All Play a Part in Retirement Readiness
4
Participant Loans: A Fiduciary Storm Brewing?
5
What to Know About Financial Audits Filed with Form 5500s
Scrutinizing Plan Fees Can Save Sponsors, Participants Money
Advisers have the
ability to reduce a retirement plan’s fees by as much as 50%, says Julie Ward,
vice president, consulting at NFP’s retirement division in Aliso Viejo,
California. Nathan Boxx, a financial adviser at Fort Pitt Capital Group in
Pittsburgh, Pennsylvania, agrees, but thinks there is the potential for even
greater reductions: “In my experience, particularly for plans that have not
been looked at for a number of years, you can take overall expenses from 4% all
the way down to 1% to 2%, making this a significant savings because these plans
were not properly managed or given good advice from their previous adviser.
However, even making a one basis point savings over a 20-year period can be the
difference between a participant retiring at age 65 or 70.” Read more >
DC Plan Sponsors Feel Responsible for Retirement Readiness
Defined contribution plan sponsors are beginning to understand the importance of running their plans in a robust manner to get people prepared to retire with adequate income, J.P. Morgan says in a new report, “Progress Never Stops: How plan sponsors are sharpening their focus to strengthen plans and improve outcomes.” Sixty-one percent of employers now analyze the percentage of their employees on track to replace 80% or more of their final salary in retirement, up from 44% in 2013. Read more >
Economic Events

The
Conference Board Consumer Confidence Index, which had declined marginally in
June (a downward revision), improved in July. The Index now stands at 121.1
(1985=100), up from 117.3 in June. The Present Situation Index increased from
143.9 to 147.8, while the Expectations Index rose from 99.6 last month to
103.3.

Market Mirror

Tuesday,
the Dow gained 100.26 points (0.47%) to finish at 21,613.43, the NASDAQ
increased by 1.37 (0.02%) to 6,412.17, and the S&P 500 closed 7.17 points
(0.29%) higher at 2,477.08. The Russell 2000 climbed 12.33 points (0.86%) to
1,450.38, and the Wilshire 5000 was up 39.98 points (0.16%) at 25,806.19.

The
price of the 10-year Treasury note decreased 21/32, bringing its yield up to
2.331%. The price of the 30-year Treasury bond fell 1 15/32, increasing its
yield to 2.908%.

Compliance
The Governmental Accounting Standards Board (GASB) has issued an Exposure Draft of a proposed Implementation Guide that contains questions and answers about the GASB’s new standards for accounting and financial reporting for postemployment benefits other than pensions. Those benefits (primarily retiree health care) are referred to as other postemployment benefits (OPEB). Read more >
Trustee Found Liable for Diversification Failures
The U.S. Secretary of
Labor filed a civil complaint against Ditch Witch Equipment of Tennessee Inc.,
an underground utility construction equipment company, and Aubrey Needham,
trustee of the company’s profit-sharing plan during the relevant time period. The
lawsuit alleges that Needham “acted imprudently when he authorized the
investment of plan assets, primarily on margin, in stock warrants and
derivative securities without conducting any due diligence or consideration of
the investments’ impact on the plan’s level of diversification, liquidity needs
or funding objectives.” Read more >
Ask the Experts
Effect of the Supreme Court Ruling on Church Plans
“Does the Supreme Court ruling about the
definition of church plan mean it may be possible for such organizations to
continue to maintain church plans that are not subject to the Employee
Retirement Income Security Act (ERISA) as they have in the past, or is there
more to come on this subject?”
Read more >
Small Talk
Professionals
surveyed by staffing firm OfficeTeam said they squander an average of 56
minutes per day, or the equivalent of nearly five hours a week, using their
mobile device for non-work activities in the office. In contrast, senior
managers estimate their staff members spend 39 minutes each day on their cell
phones during business hours. Workers also admitted to clocking 42 minutes a
day on personal tasks. Read more >

ON THIS DATE: In 1775, a postal system was established
by the 2nd Continental Congress of the United States. The first Postmaster
General was Benjamin Franklin. In 1788, New York became the 11th state to
ratify the U.S. Constitution. In 1881,
Thomas Edison and Patrick Kenny executed a patent application for a facsimile
telegraph (U.S. Pat. 479,184). In 1947,
U.S. President Harry Truman signed The National Security Act. The act created
the National Security Council, the Department of Defense, the Central
Intelligence Agency and the Joint Chiefs of Staff. In 1948, U.S. President Harry Truman signed executive orders that
prohibited discrimination in the U.S. armed forces and federal employment. In 1998, AT&T and British
Telecommunications PLC announced they were forming a joint venture to combine
international operations and develop a new Internet system.

 

 

WEDNESDAY
WISDOM:
“Blessed is the man, who having nothing to say, abstains from giving
wordy evidence of the fact.”
—George Eliot, English novelist

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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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