Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 30th, 2016
Benefits & Administration
A Simple Rule for Spending Down Retirement Savings
Evan Inglis, a fellow of the Society of Actuaries, and senior vice president in the Institutional Solutions group at Nuveen Asset Management, based in Chicago, says a 3% spending rule, rather than the traditional 4% rule, recognizes the lower level of returns we are likely to experience in coming years due to low interest rates and other factors such as demographic trends. However, after advising different people and thinking about his own retirement, Inglis tells PLANSPONSOR he realized that as people got older, the ability to spend without worrying about depleting savings increases. So, in an essay written for the Society of Actuaries, he puts forth the “feel-free” spending rule.Read more >
2022 Recordkeeping Survey
Defined Benefit Plans May Have New Life
TRIVIAL PURSUITS: How Many States Are in More Than One Time Zone?
TRIVIAL PURSUITS: Which are the most northern, southern, eastern and western U.S. States?
TRIVIAL PURSUITS: Meaning and Origin of the Idiom “Watershed Moment?”
Wells Fargo Finds Diversification Has Improved in DC Plans
Over the past five years, the number of participants in defined contribution (DC) plans administered by Wells Fargo that satisfied the minimum investment diversification goal has increased 26.2%. Younger and less tenured employees are more likely to satisfy Wells Fargo’s defined minimum diversification goal.Read more >
Long-Term Care, Inflation Worry Pre-Retirees
Financial concerns worry both pre-retirees and retirees, although they weigh more heavily on the minds of pre-retirees, according to a survey by the Society of Actuaries. Sixty-nine percent of pre-retirees, those workers age 45 and older, are worried about long-term care and inflation, followed by paying for health care (67%). The survey shows a disconnect between what people think they will do in retirement to manage risks, compared to what approaches retirees actually used.Read more >
Products, Deals and People
Why Aren’t There More ETFs in DC Plans?
Bob Ward, chief revenue officer for Vertical Management Systems, tells PLANSPONSOR that from an attribute standpoint, exchange-traded funds (ETFs) “make all the sense in the world” for defined contribution plans. “They are inexpensive, have no sales or service fees, and no surrender penalties, so, considering the [Department of Labor] regulations, it would seem these would become popular,” he says. The issue is with how they are handled on recordkeeping platforms.Read more >
Rayonier Advanced Materials is looking for a recordkeeper and custodian to consolidate administration for its defined benefit plan, defined contribution plans, stock incentive plan and foundation & legal resource trust, with combined assets of approximately $445 million.Read more >
Market Mirror

Yesterday, the Dow gained 284.96 points (1.64%) to finish at 17,694.68, the NASDAQ closed 87.38 points (1.86%) higher at 4,779.25, and the S&P 500 increased 34.56 points (1.70%) to 2,070.65. The Russell 2000 was up 24.32 points (2.20%) at 1,131.61, and the Wilshire 5000 climbed 372.42 points (1.77%) to 21,417.53.

On the NYSE, 3.1 billion shares changed hands, with advancing issues outnumbering declining issues nearly 6 to 1. On the NASDAQ, 2.7 billion shares traded, with a more than 3 to 1 lead for advancers.

The price of the 10-year Treasury note decreased 14/32, bringing its yield up to 1.514%. The price of the 30-year Treasury bond fell 30/32, increasing its yield to 2.315%.
Aegon and Transamerica Settle ERISA Self-Dealing Suit
Under the terms of a proposed lawsuit settlement, Transamerica will have to make structural changes in the way it runs its own retirement savings plan, including changing how fees are calculated. The settlement comes out of class-action litigation filed early last year in which fiduciaries at Transamerica’s parent company, Aegon, were accused of self-dealing via the company’s retirement plan offered to its own employees. A participant sued Aegon USA, some of its subsidiaries and trustees of the plan, alleging they violated the Employee Retirement Income Security Act’s (ERISA’s) requirement to act for the best interest of plan participants.Read more >
From the Magazine
Minding the Gap
“Whatever does not get measured does not get managed,” the adage says. Adviser James Brewer thinks plan sponsors should remember that, should they doubt the usefulness of doing retirement savings gap analyses.Read more >
Small Talk
ON THIS DATE: In 1841, the Erie Railroad rolled out its first passenger train. In 1859, Charles Blondin became the first person to cross Niagara Falls on a tightrope. In 1921, U.S. President Warren G. Harding appointed former President William Howard Taft chief justice of the United States. In 1936, Margaret Mitchell’s book, “Gone with the Wind,” was published. In 1950, U.S. President Harry Truman ordered U.S. troops into Korea and authorized the draft. In 1953, the first Corvette rolled off the Chevrolet assembly line in Flint, Michigan. It sold for $3,250. In 1958, the U.S. Congress passed a law authorizing the admission of Alaska as the 49th state in the Union. In 1971, the 26th Amendment to the U.S. Constitution was ratified when Ohio became the 38th state to approve it. The amendment lowered the minimum voting age to 18. In 1994, the U.S. Figure Skating Association stripped Tonya Harding of the 1994 national championship and banned her from the organization for life for an attack on rival Nancy Kerrigan. In 1998, officials confirmed that the remains of a Vietnam War serviceman buried in the Tomb of the Unknowns at Arlington National Cemetery were identified as those of Air Force pilot Michael J. Blassie. In 2000, U.S. President Bill Clinton signed the E-Signature bill to give the same legal validity to an electronic signature as a signature in pen and ink.
SURVEY SAYS:  The 10th anniversary of the passage of the Pension Protection Act (PPA) is coming up. Though it’s called the Pension Protection Act, it included provisions about both defined benefit (DB) and defined contribution (DC) plans intended to improve retirement security for participants in all types of plans. This week, I’d like to know, do you think the PPA has succeeded in improving the retirement security picture, what provisions helped the most, and where did the PPA fall short? 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


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