Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 31st, 2018
Benefits & Administration
TIAA Finds Retirement Plan Leakage Offsets Automatic Enrollment Benefits
With benefits from kick starting retirement savings to fostering participant engagement, automatic enrollment has proven itself to be an important plan feature. Yet, this does not acquit it from including its own set of drawbacks. A recent TIAA survey examined the utilization of outstanding loans and withdrawals in accordance to automatic enrollment, otherwise known as “leakage” and found that “among households under the age of 55, each dollar contributed to a 401(k) plan or similar tax-advantaged retirement account is offset by approximately 40 cents in pre-retirement taxable withdrawals.” Read more >
Will Employees Contribute More to HSAs?
Legislation passed by the House would nearly double statutory limits on annual contributions to HSAs those with employee-only health coverage—from $3,450 to $6,550—and, those with family coverage could contribute even more—a new total of $13,300 ($6,400 more than the current $6,900 limit for HSA account holders with family coverage).  Account holders older than 55 can contribute an additional $1,000 regardless of their health coverage level. The Employee Benefit Research Institute (EBRI) asked the question, “Would these limit increases prompt additional funding into HSAs?” Read more >
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Market Mirror

Yesterday, the Dow was down 144.23 points (0.57%) at 25,306.83, the NASDAQ fell 107.42 points (1.39%) to 7,630.00, and the S&P 500 decreased 16.22 points (0.58%) to 2,802.60. The Russell 2000 closed 10.21 points (0.61%) lower at 1,653.13, and the Wilshire 5000 lost 191.09 points (0.65%) to finish at 29,130.65.

 

The price of the 10-year Treasury note was down 5/32, increasing its yield to 2.974%. The price of the 30-year Treasury bond decreased 14/32, binging its yield up to 3.104%.

Sponsored message from Schwab Retirement Plan Services, Inc.
Three Key Insights to Consider for Building Confidence and Improving Outcomes
Insights on how using increased levels of guidance and advice may help build better outcomes for your employees. Read more >
Compliance
PBGC Offers Resource for Practitioner Questions
One interesting question addressed is whether spinning off a separate plan during the plan year is a way to reduce Pension Benefit Guaranty Corporation (PBGC) premiums. Read more >
‘Sua Sponte’ Leave Granted to Amend Pioneer Money Market Complaint
First, the court finds that defendants’ opposition to plaintiffs’ motion for class certification lacks merit. Therefore, on the arguments presented by the parties, the court says “it appears class certification is appropriate.” “But the parties’ arguments also reveal a serious defect in plaintiff’s ability to serve as an adequate class representative, namely, he has no standing to seek prospective equitable relief on behalf of those who continue to participate in the retirement plan,” the decision states. “After considering various ways of handling the situation, the court deems it most appropriate to reserve ruling on the matter of class certification and sua sponte grant plaintiff leave to amend so that plaintiff has an opportunity to attempt to cure the defect.” Read more >
From the Magazine
Opportunities Knock
Sponsors of defined contribution (DC) plans can turn to a few simple plan design features—all typically underutilized—that can increase participants’ retirement readiness. Read more >
Small Talk

ON THIS DATE: In 1498, Christopher Columbus, on his third voyage to the Western Hemisphere, arrived at the island of Trinidad. In 1792, the cornerstone of the U.S. Mint in Philadelphia was laid. It was the first building to be used only as a U.S. government building. In 1928, MGM’s Leo the Lion roared for the first time. He introduced MGM’s first talking picture, “White Shadows on the South Seas.” In 1948, President Harry Truman helped dedicate New York International Airport (later John F. Kennedy International Airport) at Idlewild Field. In 1955, Marilyn Bell of Toronto, Canada, at age 17, became the youngest person to swim the English Channel. In 1961, the first tie in All-Star Game major league baseball history was recorded when it was stopped in the 9th inning due to rain at Boston’s Fenway Park. In 1964, the American space probe Ranger 7 transmitted pictures of the moon’s surface. In 1971, men rode in a vehicle on the moon for the first time in a lunar rover vehicle (LRV). In 1989, the Game Boy handheld video game device was released in the U.S. In 1991, President George H.W. Bush and Soviet President Mikhail Gorbachev signed the Strategic Arms Reduction Treaty. In 1995, the Walt Disney Company agreed to acquire Capital Cities/ABC in a $19 billion deal.

TRIVIAL PURSUITS: There’s actually a strong connection between salami and a favorite pizza topping—pepperoni. So, what is salami? 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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