Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 11th, 2018
Benefits & Administration
Without Bold Action, Social Security Woes on the Horizon
The Social Security Board of Trustees on Tuesday released its annual report on the long-term financial stability of the Social Security trust funds, finding the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds are projected to become depleted in 2034, with 79% of benefits payable at that time. Like others commenting on the new figures, Rob Fishbein, vice president and corporate counsel at Prudential Financial, says it’s not quite time to hit the panic button, “but it is time to take very seriously the challenges pre-retirees face.” Clearly, there may be more of a gap in guaranteed lifetime income for today’s workers than for their parents, he warns. Read more >
Interest Rates Temper DB Funded Status Improvements in May
“The pattern of improvement paused last month owing to a dip in discount rates, but aggregate funded status remains near a four-year high as the long bull market continues to persist,” says Matt McDaniel, a partner in Mercer’s US Wealth business. Read more >
Products, Deals and People
Retirement Industry People Moves
Barrow Hanley Expands New Bank Loan Team; Aviva Appoints Institutional Sales Head; ABG Expands into Mid-Atlantic Region; and more. Read more >
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Economic Events

April sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading-day differences but not for price changes, were $493.3 billion, up 0.8% from the revised March level and up 7.8% from the April 2017 level, the Census Bureau reported. The February to March percent change was unrevised from the Monthly Wholesale Annual Revision Report and is up 0.4%.

 

Employer costs for civilian workers averaged $24.77 per hour worked for wages and salaries and $11.55 for benefits in March, according to the Bureau of Labor Statistics. Health insurance was the largest employer benefit cost at $3.03, accounting for 8.3% of total compensation costs.

 

THE ECONOMIC WEEK AHEAD: Tomorrow, the Bureau of Labor Statistics will reveal the consumer price index for May, and Wednesday, it will reveal the producer price index for May. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about retail sales for May and business trade for April.

Market Mirror

Friday, the Dow closed 75.12 points (0.30%) higher at 25,316.53, the NASDAQ gained 10.44 points (0.14%) to close at 7,645.51, and the S&P 500 Index was up 8.66 points (0.31%) at 2,779.03. The Russell 2000 increased 4.72 points (0.28%) to 1,672.49, and the Wilshire 5000 gained 90.43 points (0.31%) to finish at 28,987.28.

 

The price of the 10-year Treasury note was down 7/32, increasing its yield to 2.949%. The price of the 30-year Treasury bond decreased 14/32, bringing its yield up to 3.090%.

 

WEEK’S WORTH: For the week ending June 8, the Dow climbed 2.77%, the NASDAQ was up 1.21%, and the S&P 500 finished 1.62% higher. The Russell 2000 increased 1.49%, and the Wilshire 5000 gained 1.71%.

From the Magazine
Index Fund Usage Increases in 401(k)s
Brightscope proprietary research about the percentage of plans offering index funds and the percentage of plan assets in index funds. Read more >
Investing
Signs of Annuity Market Stabilization After DOL Fiduciary Rule Derailment
The Insured Retirement Institute (IRI) has published final first quarter 2018 sales results for the U.S. annuity industry, based on data shared by Beacon Research and Morningstar, Inc. Commenting on the new data, Cathy Weatherford, IRI president and CEO, says she sees pretty clear evidence that annuity sales will strengthen in the years ahead, despite recent regulatory challenges causing marketplace disruption. “Our research shows that American consumers planning for, and living in, retirement need and desire solutions that can provide them with income they cannot outlive, and that can help protect the financial assets they’ve worked so hard to build,” she adds. Read more >
Small Talk

ON THIS DATE: In 1770 Captain James Cook discovered the Great Barrier Reef off of Australia when he ran aground. In 1776, in America, the Continental Congress formed a committee to draft a Declaration of Independence from Britain. In 1895, Charles E. Duryea received the first U.S. patent granted to an American inventor for a gasoline-driven automobile. In 1919, Sir Barton became the first horse to capture the Triple Crown when he won the Belmont Stakes in New York City. In 1927, Charles A. Lindberg was presented the first Distinguished Flying Cross. In 1936, the Presbyterian Church of America was formed in Philadelphia, Pennsylvania. In 1963, Dr. Martin Luther King, Jr. was arrested in Florida for trying to integrate restaurants. In 1963, Alabama Governor George Wallace allowed two black students to enroll at the University of Alabama. In 1972, Hank Aaron tied the National League record for 14 grand-slam home runs in a career. In 1987, Margaret Thatcher became the first British prime minister in 160 years to win a third consecutive term of office. In 1990, the U.S. Supreme Court struck down a law that would prohibit the desecration of the American Flag.

SURVEY SAYS RESPONSES: Law week, I asked NewsDash readers, “What books or other publications do you plan to read this summer?” The reader looking forward to recommendations from the survey may be a little disappointed. Many responding readers listed genres instead of specific books—mysteries, spy novels, self-help, and true crime. Some only cited certain authors—Lee Childs, Nevada Barr, Tami Hoag, David Baldacci, Alice Hoffman and Phillipa Gregory. There were some specific books mentioned, though. In verbatim comments left by readers, some talk about the benefits of reading, some discuss how they read (books on CD, Kindle, actual books). A couple mentioned why they read not just during the summer. Editor’s Choice goes to the reader who said: “Need fun reading that teaches me.” A big thank you to all who participated in the survey! 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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