Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 22nd, 2017
Benefits & Administration
Analysis Finds DC Plan Health Improving
Using some best practices, plan sponsors have moved the needle toward more plan participants taking action to reach an 80% income replacement goal, Wells Fargo data shows. The firm has issued a report identifying those best practices. Read more >
Products, Deals and People
BMO Releases DC Plan Benchmarking Report
Compiling results from leading industry surveys, BMO Global Asset Management has created a report filled with data about defined contribution (DC) plans to help plan sponsors benchmark their plans. The aim is to help sponsors see how their plan compares to other companies in their industry. Read more >
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Principal Announces Key Platform Decisions in Wells Fargo Integration
Economic Events

Existing-home sales rebounded in May following a notable decline in April, and low inventory levels helped propel the median sales price to a new high while pushing down the median days a home is on the market to a new low, according to the National Association of Realtors. All major regions except for the Midwest saw an increase in sales last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1% to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April. Last month’s sales pace is 2.7% above a year ago and is the third highest over the past year.

Market Mirror

Wednesday, the Dow lost 57.11 points (0.27%) to finish at 21,410.03, the NASDAQ closed 45.92 points (0.74%) higher at 6,233.95, and the S&P 500 decreased by 1.42 (0.06%) to 2,435.61. The Russell 2000 was down 3.71 points (0.26%) at 1,399.25, and the Wilshire 5000 closed 21.12 points (0.08%) lower at 25,271.32.

The price of the 10-year Treasury note was down 2/32, increasing its yield to 2.165%. The price of the 30-year Treasury bond was up 6/32, decreasing its yield to 2.731%.

Compliance
Sponsor Admits Embezzlement of Plan Dollars
The Department of Labor’s Employee Benefits Security Administration (EBSA) has secured a judgement and consent order against Andrea Lynn McCarthy and Lisa Hall, and the Truss Systems LLC Profit Sharing Plan, for violations of the Employee Retirement Income Security Act (ERISA). In addition to restoring $111,624 from the profit sharing plan McCarthy improperly withdrew, the new resolution orders the defendants to pay $25,253 and pre-judgment interest to reflect the lost earnings and post judgment interest for which McCarthy and Hall are jointly and severally liable. Read more >
Bipartisan Bill Seeks Middle-Ground Retirement Solutions
For small-business employees yearning to grow retirement savings, the Retirement Security Act may just be the solution needed to carry them towards a sustainable future, according to its sponsors. U.S. Senator and the Chairman of the Senate Aging Committee Susan Collins (R-Maine), along with Senator Bill Nelson (D-Florida), recently introduced the legislation. They say it is aimed at encouraging small businesses to offer retirement plans to more workers, while also establishing a positive savings mindset among employees. Read more >
Court Rules for Putnam in Excessive Fee Suit
A federal district court has entered judgment for Putnam Investments and its 401(k) plan’s committees in a case alleging self-dealing in its investment fund lineup for the plan and excessive fees for lack of monitoring and replacing investments. The court ultimately found that since plaintiffs did not establish a case in which a particular fiduciary breach caused a loss to the plan, their arguments fail. Read more >
Small Talk

ON THIS DATE: In 1611, English explorer Henry Hudson, his son and several other people were set adrift in present-day Hudson Bay by mutineers. In 1807, British seamen board the USS Chesapeake, a provocation leading to the War of 1812. In 1868, Arkansas was re-admitted to the Union. In 1870, the U.S. Congress created the Department of Justice. In 1933, Germany became a one political party country when Hitler banned parties other than the Nazis. In 1944, U.S. President Franklin Roosevelt signed the “GI Bill of Rights” to provide broad benefits for veterans of the war. In 1945, during World War II, the battle for Okinawa officially ended after 81 days. In 1970, U.S. President Richard Nixon signed an extension of the Voting Rights Act of 1965. It required that the voting age in the United States to be 18. In 1974, in Chicago, the Sears Tower Skydeck opened. In 1990, Checkpoint Charlie was dismantled in Berlin.

SURVEY SAYS: Several investment managers are reporting that market return expectations going forward will be much lower than in the past—some as low as 3% to 4%. This week, I’d like to know, how likely would you be to pick a 2.5% guaranteed rate of return over the returns you would potentially receive in your plan over the years? You may respond to the survey by 6 p.m. Pacific time today. Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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