Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 6th, 2017
Benefits & Administration
General Mills is freezing its U.S. defined benefit (DB) pension plans, according to a recently filed 10-K with the Securities and Exchange Commission (SEC). The company will freeze the pay and service amounts used to calculate pension benefits for active employees who participate in the United States DB plans as of December 31, 2027. Read more >
The Move to Online Participant Communications May Not Be Best
In an effort to find out how workers understand financial communications regarding retirement savings plans, and how participant knowledge can affect asset-allocation decisions, TIAA conducted research about how specific media communications (print vs. online, graphical vs. text), affects a worker’s comprehension of financial material. The research found most participants tended to skim through online material, whereas those who read written content gained a thorough, enhanced understanding. Read more >
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Industry Voices
Barry’s Pickings Online: Untangling the State Auto-IRA/ERISA Mess
Michael Barry, president of the Plan Advisory Services Group, discusses what may be confusion among lawmakers about state-run plans for private-sector workers. Read more >
Market Mirror

Wednesday, the Dow increased by 1.10 (0.01%) to 21,478.17, the NASDAQ closed 40.80 points (0.67%) higher at 6,150.86, and the S&P 500 increased 3.53 points (0.15%) to 2,432.54. The Russell 2000 was down 6.54 points (0.46%) at 1,420.14, and the Wilshire 5000 was up 20.25 points (0.08%) at 25,305.33.

The price of the 10-year Treasury note was up 6/32, decreasing its yield to 2.329%. The price of the 30-year Treasury bond increased 11/32, bringing its yield down to 2.851%.

Compliance
The Internal Revenue Service (IRS) has issued Notice 2017-37, which contains the Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Contribution Plans for 2017. The 2017 cumulative list includes provisions for Roth conversions, using lifetime income products in target-date funds (TDFs) and the use of qualified longevity annuity contracts (QLACs), among other things. Read more >
DOL Brief Defends Fiduciary Rule Despite Ongoing Review
The U.S. Department of Labor (DOL) has submitted a lengthy new brief in the consolidated lawsuit filed by investment and insurance industry trade groups against the Obama-era fiduciary rule expansion, which took effect in transitional form in early June. Long-term, DOL staff is concerned about maintaining the department’s broad litigation and enforcement capabilities in the retirement plan services marketplace. Read more >
ERISA Suit Questions Money Market Performance, Recordkeeping Fees
Employees of Pioneer Natural Resources have filed an Employee Retirement Income Security Act (ERISA) lawsuit against their employer, alleging a variety of fiduciary breaches in the management of its 401(k) plan. Because revenue-sharing payments are asset based in the plan, plaintiffs argue, “they bear no relation to a reasonable recordkeeping fee and can provide excessive compensation.” Read more >
Connecticut Passes Conflict-of-Interest Rule for Non-ERISA 403(b)s
On June 27, Connecticut Governor Dannell Malloy passed an act requiring service providers to 403(b)s not subject to the Employee Retirement Income Security Act (ERISA) to disclose conflicts-of-interest. Non-ERISA plans are not subject to the Department of Labor (DOL) fiduciary rule. Read more >
Small Talk

ON THIS DATE: In 1699, Captain William Kidd, the pirate, was captured in Boston and deported back to England. In 1777, British forces captured Fort Ticonderoga during the American Revolution. In 1885, Louis Pasteur successfully tested his anti-rabies vaccine. The child used in the test later became the director of the Pasteur Institute. In 1919, a British dirigible landed in New York at Roosevelt Field. It completed the first crossing of the Atlantic Ocean by an airship. In 1923, the Union of Soviet Socialist Republics (USSR) was established. In 1933, the first All-Star baseball game was held in Chicago. The American League beat the National League 4-2. In 1942, diarist Anne Frank and her family took refuge from the Nazis in Amsterdam. In 1945, U.S. President Harry Truman signed an order creating the Medal of Freedom. In 1948, Frieda Hennok became the first woman to serve as the commissioner of the Federal Communications Commission. In 1957, Althea Gibson won the Wimbledon women’s singles tennis title. She was the first black athlete to win the event. In 1981, the Dupont Company announced an agreement to purchase Conoco, Inc. (Continental Oil Co.) for $7 billion. At the time it was the largest merger in corporate history. In 1983, the U.S. Supreme Court ruled that retirement plans could not pay women smaller monthly payments solely because of their gender. In 1989, the U.S. Army destroyed its last Pershing 1-A missiles at an ammunition plant in Karnack, Texas. The dismantling was under the terms of the 1987 Intermediate-range Nuclear Forces Treaty. In 1997, the Mars Pathfinder released Sojourner, a robot rover on the surface of Mars.

SURVEY SAYS: Retirement plan sponsors’, providers’ and regulators’ concerns about ensuring lifetime retirement income for employees has increased over the years. This week, I’d like to know, do you own an annuity, and do you think individuals can have retirement income that lasts throughout retirement without owning an annuity? You may respond to this week’s survey by 6 p.m. Pacific time today. 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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