Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 21st, 2018
Benefits & Administration
PSNC 2018: Developments in Participant Advice
From the recent fiduciary rule hold to modern, advanced technology, panelists examine how participant advice has widely grown in the past years. Read more >
Health Meets Wealth
According to Nathan Voris, managing director for business strategy at Schwab Retirement Plan Services, and Michael Kane, managing director of Plan Sponsor Consultants, there is an increased recognition among employers that employees’ stress about debt and finances can be just as detrimental to physical health and job performance as a serious illness. During a panel discussion at the 2018 PLANSPONSOR National Conference, Voris and Kane explained that the vast majority of retirement plan officials they speak with feel financial stress is significantly impacting participants’ daily lives, diminishing their ability to plan effectively for retirement and resulting in a lack of productivity. Read more >
Pension Risk Transfer Options
The transferring of risk, or de-risking, from defined benefit (DB) plans has become a focus of pension plan providers over the past few years. Risk transfer or de-risking transactions addressing pension plan risks can include several options: the purchase of annuities from an insurance company that transfers liabilities for some or all plan participants (removing the risks cited above with respect to that liability from the plan sponsor); the payment of lump sums to pension plan participants that satisfy the liability of the plan for those participants (either through a one-time offer or a permanent plan feature); and the restructuring of plan investments to reduce risk to the plan sponsor. At the 2018 PLANSPONSOR National Conference, David Hinderstein, president, Strategic Retirement Group, Inc., in White Plains, New York said, “Many pension plans are frozen and these plan sponsors have been waiting for something to happen. They are hoping and hope has become expensive.” Read more >
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Economic Events

Existing-home sales fell back for the second straight month in May, as only the Northeast region saw an uptick in activity, according to the National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.4% to a seasonally adjusted annual rate of 5.43 million in May from downwardly revised 5.45 million in April. With last month’s decline, sales are now 3.0% below a year ago and have fallen year-over-year for three straight months.

Market Mirror

Wednesday, the Dow was down 42.41 points (0.17%) at 24,657.80, the NASDAQ gained 55.93 points (0.72%) to finish at 7,781.52, and the S&P 500 was up 4.73 points (0.17%) at 2,767.32. The Russell 2000 climbed 13.54 points (0.80%) to 1,706.99, and the Wilshire 5000 increased 78.41 points (0.27%) to 29,024.90.

 

The price of the 10-year Treasury note decreased 10/32, bringing its yield up to 2.935%. The price of the 30-year Treasury bond fell 25/32, increasing its yield to 3.073%.

Compliance
DOL Finalizes Regulations to Extend Small Business Access to Health Plans
The Department of Labor (DOL) has finalized regulations to expand the opportunity to offer employment-based health insurance to small businesses through Small Business Health Plans, also known as Association Health Plans (AHPs). While some employer groups have applauded the regulation for helping more employees gain access to health care coverage, other groups have expressed fear that it will increase pricing on Affordable Care Act (ACA) market exchanges by taking a number of consumers out of the pool. New York Attorney General Barbara D. Underwood and Massachusetts Attorney General Maura Healey announced they would sue the Trump administration over the regulation. Read more >
Investing
PSNC 2018: Investment Lineup Construction and Design
There are a number of investment vehicles to consider when drafting a plan menu that best suits the plan’s participants. Read more >
DC Plan Participants Largely Stuck With Investments in May
The Alight Solutions 401(k) Index shows that in May, a mere 0.14% of defined contribution (DC) plan balances were traded. On average, 0.014% of balances were traded each day. There were 13 days favoring fixed income, representing 59% of the trades, and nine days favoring equities, representing 41% of the trades. There was only one day when trades were above normal. Read more >
401(k) Participants Tend to Hold Lower Cost Mutual Funds
The expense ratios 401(k) plan participants incur for investing in mutual funds have declined substantially since 2000, Investment Company Institute data shows. Read more >
Small Talk

ON THIS DATE: In 1788, the U.S. Constitution went into effect when New Hampshire became the ninth state to ratify it. In 1834, Cyrus McCormick patented the first practical mechanical reaper for farming. His invention allowed farmers to more than double their crop size. In 1893, the Ferris Wheel was introduced at the World’s Columbian Exposition in Chicago. In 1939, Lou Gehrig quit baseball due to illness. In 1945, Pan Am announced an 88-hour round-the-world flight at a cost of $700. In 2004, SpaceShipOne, designed by Burt Rutan and piloted by Mike Melvill, reached 328,491 feet above Earth in a 90 minute flight. The height is about 400 feet above the distance scientists consider to be the boundary of space.

SURVEY SAYS: My eldest son works four 10-hour days rather than five 8-hour days per week. While the long days can be exhausting and not leave time for much else, it provides him with three days off and one during the week to schedule appointments so as not to miss work. This week, I’d like to know, would you rather work five 8-hour days or four 10-hour days? 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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