Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 20th, 2016
Benefits & Administration
Sixty percent of Millennials have less than $10,000 saved for retirement, and that’s roughly the same amount Baby Boomers have. Fifty-eight percent of Millennials are saving for retirement, and 38% know how much they will need, according to a survey by Ramsey Solutions.Read more >
Thirty-seven percent of U.S. parents say their children’s education is more important than their own retirement savings, according to a survey by HSBC Group. Sixty percent of U.S. parents would go into debt to fund their child’s college education, and 58% say that, while the expense makes it more difficult to keep up with other financial commitments, it is more important.Read more >
Automatic enrollment is not being embraced by a majority of employers. Only 41% of large companies (those with 500 employees or more) offer automatic enrollment, compared with just 28% of small companies (100 through 499 employees) and 18% of micro companies (10 through 99 employees). However, 71% of employees would like to be auto-enrolled into their plan. A new report from the Transamerica Center for Retirement Studies reviews the retirement plan landscape.Read more >
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PSNC 2016: Pension Plan De-Risking
Speakers featured on the Pension Plan De-Risking panel on the second day of the PLANSPONSOR National Conference all stressed there is no one-size fits all solution when it comes to de-risking defined benefit (DB) plans. As explained by Rob Massa, director of retirement at Ascende, an EPIC company, “there are so many different variables to consider that it becomes difficult to give general advice about de-risking. It gets very detailed and complicated pretty much right from the start.”Read more >
PSNC 2016: The Intersection of Health Care and Retirement
How can plan sponsors’ benefits programs address health and retirement plan benefits all at once? Chris Luongo, vice president, strategy, investment and marketing at ADP Retirement Services, said, “There is no one solution to the problem.” “Deciding which benefits to prioritize needs to be an overall strategy of an organization—every benefit has a symbiotic relationship with another,” according to J. Brian Coleman, vice president of total rewards and human resources (HR) shared services for Dawn Food Products.Read more >
Products, Deals and People
Fidelity launched an interactive money checkup that analyzes the diverse needs of individuals and provides guidance so they can easily take action. The money checkup guides people through a series of questions—from their age and salary to their savings and debt. It asks about their financial goals and then highlights the areas where they need help.Read more >
Economic Events

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,164,000, the Census Bureau reported. This is 0.3% below the revised April estimate of 1,167,000, but is 9.5% above the May 2015 rate of 1,063,000. Single-family housing starts in May were at a rate of 764,000; this is 0.3% above the revised April figure of 762,000. The May rate for units in buildings with five units or more was 396,000.

THE ECONOMIC WEEK AHEAD: Wednesday, the National Association of Realtors will report about existing home sales for May. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about new home sales for May. Friday, the Census Bureau will report about durable goods orders for May.
Market Mirror

Friday, the Dow lost 57.94 points (0.33%) to finish at 17,675.16, the NASDAQ closed 44.58 points (0.92%) lower at 4,800.34, and the S&P 500 decreased 6.77 points (0.33%) to 2,071.22. The Russell 2000 was down 3.50 points (0.30%) at 1,144.69, and the Wilshire 5000 fell 59.67 points (0.28%) to 21,431.14.

On the NYSE, 3.1 billion shares changed hands, with 3 advancing issues for every 2 declining issues. On the NASDAQ, 2.7 billion shares traded with a 1.4 to 1 ratio of decliners to advancers.

The yield of the 10-year Treasury note was 1.611%. The yield of the 30-year Treasury bond was 2.423%.

WEEK’S WORTH: For the week ending June 17, the Dow was down 1.06%, the NASDAQ fell 1.92%, and the S&P 500 decreased 1.19%. The Russell 2000 lost 1.65%, and the Wilshire 5000 was down finished 1.19% lower.
Compliance
Noting that it has been 10 years since the passage of the Pension Protection Act (PPA), State Street Global Advisors (SSGA) last week held meetings with key members of the Senate Finance and Health, Education, Labor & Pensions committees to discuss drafting a new bill to make retirement plans mandatory among all private sector businesses with 100 or more employees.Read more >
PSNC 2016: Washington Insights
The 2016 PLANSPONSOR National Conference discussion of legislative, regulatory and judicial developments in the retirement plan industry was strongly focused on litigation. Which makes sense, as David Levine, principal with Groom Law Group, Chartered, explained that Washington and the courts are intertwined. “Laws are passed, then plaintiffs’ lawyers search for issues,” he said. “Laws create avenues for compliance, enforcement and litigation.” And there is more Employee Retirement Income Security Act (ERISA) litigation than there’s ever been, added Jamie Fleckner, a partner with Goodwin Proctor LLP. Levine, Fleckner and Lisa Barton, a partner at Morgan, Lewis & Brockius LLP, discussed the types of litigation ongoing and what plan sponsors should keep in mind.Read more >
PSNC 2016: Fiduciary Rule Fundamentals
The final Department of Labor Fiduciary rule is out, so what do plan sponsors need to know? And, what can they do right now to prepare? Speaking at the 2016 PLANSPONSOR National Conference, Steven Wilkes, of counsel, the Wagner Law Group, discussed the rule’s implications for plan sponsors.Read more >
PSNC 2016: DOL and IRS Audits
The IRS has announced a new strategy for retirement plan compliance efforts. What should plan sponsors do to prepare for their next compliance check questionnaire?Read more >
Investing
PSNC 2016: Understanding Stable Value
The use of stable value funds within defined contribution plans has evolved substantially in recent years and decades, with more changes right around the corner.Read more >
Small Talk
ON THIS DATE: In 1782, the U.S. Congress approved the Great Seal of the United States. In 1837, Queen Victoria ascended the British throne following the death of her uncle, King William IV. In 1863, West Virginia became the 35th state to join the U.S. In 1863, the National Bank of Philadelphia became the first bank to receive a charter from the U.S. Congress. In 1941, the U.S. Army Air Forces was established, replacing the Army Air Corps. In 1947, Benjamin “Bugsy” Siegel was murdered in Beverly Hills at the order of mob associates angered over the soaring costs of his project, the Flamingo resort in Las Vegas. In 1950, Willie Mays graduated from high school and immediately signed with the New York Giants. In 1955, the AFL and CIO agreed to combine names and a merge into a single group. In 1963, the United States and Soviet Union signed an agreement to set up a hot line communication link between the two countries. In 1967, Muhammad Ali was convicted in Houston of violating Selective Service laws by refusing to be drafted. The U.S. Supreme Court later overturned the conviction. In 1977, the Trans-Alaska Pipeline began operation. In 1983, the U.S. Supreme Court ruled that employers must treat male and female workers equally in providing health benefits for their spouses. In 1997, the tobacco industry agreed to a massive settlement in exchange for major relief from mounting lawsuits and legal bills. In 2001, Barry Bonds (San Francisco Giants) hit his 38th home run of the season. The home run broke the major league baseball record for homers before the midseason All-Star break. In 2002, the U.S. Supreme Court ruled that the execution of mentally challenged murderers was unconstitutionally cruel.
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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