Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
June 7th, 2016
Benefits & Administration
Plan Sponsor Toolbox Includes ‘Nudge Economics’
“Employees around the world are bearing the risk and responsibility of managing their retirement, and we must do more to help ensure they aren’t going to outlive their money,” says Jim McCaughan, CEO of Principal Global Investors. A new white paper published by CREATE-Research and Principal Financial Group, “Financial Literacy: Smoothing the path to improved retirement savings,” suggests it is essential for the long-term success of the defined contribution (DC) retirement plan system, both in the U.S. and globally, for plan sponsors to practice ”nudge economics,” subtly but consistently pushing employees into participating in carefully designed savings plans. Researchers point to a need for more auto-education.Read more >
‘Hybrid’ Income Strategy Best for Retirement
Research from TIAA Institute suggests the insurance value of a GLWB may be overstated relative to the typical cost of purchasing the GLWB guarantee, and a systematic withdrawal strategy is too risky for retirees.Read more >
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2021 Recordkeeping Survey
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Giving Employees the Financial Wellness Help They Want
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DOL Clears Up Timing for Lifetime Income Illustrations
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Factors That Can Cut the Cost of Fiduciary Liability Insurance
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2020 Recordkeeping Survey
Participants Not Overreacting to Market Swings
Examining seven periods of extreme market volatility over a period of seven years, T. Rowe Price found that very few retirement plan investors moved out of stocks into cash or money market funds, and this was even more true among those with 100% of their portfolio in a target-date fund (TDF).Read more >
70% of Employees Not Price Shopping for Health Care
Seventy percent of employees do not compare prices before shopping for medical services or pharmaceutical drugs, according to a May 2016 HealthMine survey of 750 consumers enrolled in wellness programs. Despite growing industry and consumer awareness that medical procedure costs vary widely by location and provider, only 29% of health benefit plan sponsors offer a price comparison tool, respondents reported.Read more >
Sponsored message from Vanguard
Retirement: From the mind of the TDF investor
Edward Dinucci, William Lee Norton, Michael Pan, and John Croke
This paper presents key findings from Vanguard’s target-date fund investor survey. The analysis focuses on investor’s anticipated uses of retirement savings.Read more >
Market Mirror

Stocks closed at a new high for the year after a speech by Federal Reserve Chair Janet Yellen raised doubts over an interest rate hike this month, the Associated Press reports. Stock gains were led by energy companies as prices for oil and gas climbed. The Dow gained 113.27 points (0.64%) to finish at 17,920.33, the NASDAQ increased 26.20 points (0.53%) to 4,968.71, and the S&P 500 was up 10.89 points (0.52%) at 2,110.02. The Russell 2000 climbed 12.73 points (1.09%) to 1,176.87, and the Wilshire 5000 closed 123.57 points (0.57%) higher at 21,865.88.

On the NYSE, 3.1 billion shares traded, and on the NASDAQ, 2.7 billion shares changed hands, with advancing issues outnumbering declining issues more than 2 to 1 on both exchanges.

The price of the 10-year Treasury note decreased 10/32, bringing its yield up to 1.733%. The price of the 30-year Treasury bond fell 29/32, increasing its yield to 2.553%.
Compliance
IRS Weighs In on Tax Treatment of Wellness Incentives
A memorandum from the Office of Chief Counsel of the IRS says cash rewards for participating in wellness programs should be included in an employee’s gross income.Read more >
Small Talk
ON THIS DATE: In 1775, the United Colonies changed their name to the United States. In 1903, Professor Pierre Curie revealed the discovery of Polonium. In 1929, the sovereign state of Vatican City came into existence as copies of the Lateran Treaty were exchanged in Rome. In 1942, the Battle of Midway ended. The sea and air battle lasted 4 days. Japan lost four carriers, a cruiser, and 292 aircraft, and suffered 2,500 casualties. The U.S. lost the Yorktown, the destroyer USS Hammann, 145 aircraft, and suffered 307 casualties. In 1955, “The $64,000 Question” premiered. In 1966, Sony Corporation unveiled its brand new consumer home videotape recorder. The black and white only unit sold for $995. In 1968, Legoland Billund opend in Billund, Denmark. It was the original Legoland park. In 1976, “The NBC Nightly News”, with John Chancellor and David Brinkley, aired for the first time.
TRIVIAL PURSUITS: Think you know which U.S. states are the most northern, southern, eastern and western? Some answers may surprise you.Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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