Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 29th, 2016
Benefits & Administration
An analysis of large employers on the Benefitfocus Platform found health savings account (HSA) contributions are lowest among participants who need them most. For example, manufacturing employers were the highest users of high-deductible health plans (HDHPs), but manufacturing employees contribute the least to HSAs.Read more >
PPG has entered into an agreement with both Metropolitan Life Insurance Company (MetLife) and Massachusetts Mutual Life Insurance Company (MassMutual) to provide annuity benefits to approximately 13,400 retirees in PPG’s defined benefit (DB) pension plans, representing pension obligations of $1.6 billion. PPG, a Fortune 200 company, is a global manufacturer of paints, coatings, optical products, specialty materials, glass and fiber glass, with operations in nearly 70 countries around the world.Read more >
MOST READ ARTICLES
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2021 DC Plan Benchmarking Survey
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Working Past Age 65 May Seem Like a Great Idea …
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2022 Retirement Industry Trends to Follow
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TRIVIAL PURSUITS: Residents of the Island of Misfit Toys
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TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
Analysis Finds Concerning Differences in Retirement Income Calculators
Corporate Insight analyzed the retirement calculators of 12 financial institutions—six of them retirement plan recordkeepers and six not—and despite inputting the same data points for each, found exceptionally different results. The monthly income projections ranged from a high of $6,013 to a low of $3,772, a 60% spread, and the differences between the monthly income goals were even wider. “While the inputs and assumptions were disconcerting, the action steps suggested, or lack thereof, were equally alarming,” Corporate Insight says.Read more >
Many Small Businesses Adopting DC Plan Design Best Practices
One-sixth of small business plans served by Vanguard have adopted automatic enrollment, and most chose to reenroll participants in a qualified default investment alternative (QDIA) at conversion onto the Vanguard small business plan platform.Read more >
PLANSPONSOR Research
Although the online information for our 2016 Recordkeeping Survey provides a wealth of information, it contains only a small portion of each provider’s answers to the survey. To purchase an Excel spreadsheet that contains the full dataset of responses from all 60 providers, please contact Michelle Judkins at mjudkins@assetinternational.com. To learn how to participate in the 2017 PLANSPONSOR Recordkeeping Survey, contact Brian O’Keefe at bokeefe@assetinternational.com.Read more >
Ask the Experts
Delaying RMDs When Switching to Controlled Employer
“I work with the retirement plan of a private university that sponsors an Employee Retirement Income Security Act (ERISA) 403(b) plan. We have a professor who, as part of a program to ease the transition of faculty from active employment to retirement, will no longer work for the university itself but a separate foundation that is controlled by the university. She is older than 70 ½ and wishes to continue delaying her required minimum distributions, and our plan document permits her to delay such distribution until the later of 70 ½ or retirement. My question is, is the professor considered to be retired for minimum distribution purposes even though she is still employed by an entity controlled by the university, or can she still delay her RMD?”Read more >
Economic Events
The Conference Board Consumer Confidence Index, which had decreased in May, improved in June. The Index now stands at 98.0 (1985=100), up from 92.4 in May. The Present Situation Index increased from 113.2 to 118.3, while the Expectations Index rose from 78.5 to 84.5 in June.
Market Mirror

Tuesday, major U.S. stock indices reversed some of the losses experienced since the Brexit vote. The Dow gained 269.48 points (1.57%) to finish at 17,409.42, the NASDAQ closed 97.42 points (2.12%) higher at 4,691.87, and the S&P 500 increased 35.49 points (1.77%) to 2,036.03. The Russell 2000 was up 17.64 points (1.62%) at 1,107.29, and the Wilshire 5000 climbed 373.74 points (1.81%) to 21,045.11.                

On the NYSE, 3.1 billion shares traded, with a more than 5 to 1 lead for advancers. On the NASDAQ, 2.7 billion shares changed hands, with advancing issues outnumbering declining issues more than 3 to1.

The price of the 10-year Treasury note decreased 10/32, bringing its yield up to 1.469%. The price of the 30-year Treasury bond was down 8/32, increasing its yield to 2.275%.
Compliance
Firm Targeted by DOL Over Inaccurate ESOP Valuations
The U.S. Department of Labor (DOL) filed a lawsuit to restore nearly $6 million in losses to the Triple T Transport Employee Stock Ownership Plan (ESOP). The company is accused by DOL of violating  the Employee Retirement Income Security Act (ERISA) by authorizing the plan to purchase 80% of the company’s stock for $17.46 million in January 2011, “an amount at least $5.9 million higher than the stock’s fair market value.”Read more >
Industry Groups, Washington Coming Together on Retirement Security
Anne Lester, a portfolio manager and head of retirement solutions for J.P. Morgan Asset Management, attended an event hosted by the Aspen Institute, marking the upcoming 10-year anniversary of the debate and passage of the Pension Protection Act (PPA). PLANSPONSOR spoke with her shortly after the event to test her optimism about the potential for any new retirement-related legislation to continue the progress made post-PPA.Read more >
Investing
Listed equity real estate investment trusts (REITs) were the best-performing asset class in pension plans between 1998 and 2014, according to a study by pension research firm CEM Benchmarking, sponsored by the National Association of Real Estate Investment Trusts (NAREIT). Listed equity REITs outperformed all other 11 assets in the study, generating average annual net returns of 11.95%. Average annual investment costs of 0.51%, the lowest of any of the alternative or real estate asset groups, contributed to REITs’ net return performance.Read more >
Small Talk
Where you choose to retire can make a huge difference in your quality of life. Kiplinger Online Editor Stacy Rapacon compiled lists of the 10 States Where You Will Want to Retire and 15 Worst States for Retirement. States were measured on factors such as cost of living, average income for age 65 and older households, average health care costs for retired couples and tax friendliness for retirees.Read more >

ON THIS DATE: In 1652, Massachusetts declared itself an independent commonwealth. In 1776, the Virginia constitution was adopted and Patrick Henry was made governor. In 1888, Professor Frederick Treves performed the first appendectomy in England. In 1925, Marvin Pipkin filed for a patent for the frosted electric light bulb. In 1941, Joe DiMaggio got a base hit in his 42nd consecutive game, breaking George Sisler’s record from 1922. In 1950, U.S. President Harry S. Truman authorized a sea blockade of Korea. In 1953, the Federal Highway Act authorized the construction of 42,500 miles of freeway from coast to coast. In 1972, The U.S. Supreme Court ruled that the death penalty could constitute “cruel and unusual punishment.” The ruling prompted states to revise their capital punishment laws. In 1995, the shuttle Atlantis and the Russian space station Mir docked, forming the largest man-made satellite ever to orbit the Earth. In 2000, in Santa Rosa, California, the official groundbreaking ceremony took place for the Charles M. Schulz Museum.

 

WEDNESDAY WISDOM: “Don’t brood. Get on with living and loving. You don’t have forever.”—Leo Buscaglia, American author and motivational speaker
Share the good news with a friend! Pass the NewsDash along—and tell your friends/associates they can sign up for their own copy.Read more >

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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