Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 10th, 2017
Benefits & Administration
Eager for Guaranteed Income, But Don't Know Much About It
Sixty-one percent of Americans between the ages of 55 and 75 believe having guaranteed income to supplement Social Security is a smart and sound benefit, Greenwald & Associates and CANNEX found in a survey of 1,105 people. More than three-quarters (81%) of Americans older than 50 think it is important to protect their portfolio against significant investment losses. However, only 33% are highly familiar with annuities, and even fewer are familiar with annuities that guarantee income for life. Read more >
ESPPs a Useful Stopgap for 401(k) Loans, Fidelity Says
After examining the trading activity of 365,000 workers who purchase company stock through an employee stock purchase program (ESPP) over the past three years, Fidelity Investments concluded that many sold their shares at a profit. “Employees often use these plans as a savings vehicle alongside their 401(k), but money from an ESPP can be used to address short-term expenses and financial needs—and help workers avoid the need to tap their 401(k),” says Mark Haggerty, head of stock plan services at Fidelity.  Read more >
Defined Benefit Plans May Have New Life
Ask the Experts
Can an Alternate Payee Designate a Beneficiary?
Data and Research
Retirement Plan Provider Technology Investments Show Success
Products, Deals and People
Registered investment advisory (RIA) firm Merit Financial Group launched its Worksite Financial Wellness platform, offering financial wellness education, coaching and training resources. “Plan sponsors, plan advisers, benefits consultants and other professionals supporting retirement plans are … actively seeking a partner who can work flexibly with plan sponsors or their service providers to provide, on a turnkey basis, the financial wellness education and coaching that plan participants increasingly demand and need,” says Rick Kent, president and founder of Merit Financial Group.   Read more >
Betterment for Business’ 401(k) service will soon be available in the ADP Marketplace. According to the firms, the integration “represents ADP’s first-ever API integration, allowing for a full, secure, and seamless integration between Betterment’s 401(k) services and ADP’s payroll service.” The firms suggest other benefits will include “seamless and efficient” exchange of information between providers and “easier collection and more accurate census data including eligibility tracking and plan entry dates.”  Read more >
Sponsored message from Morgan Stanley
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Economic Events
In the week ending March 4, the advance figure for seasonally adjusted initial claims for unemployment insurance was 243,000, an increase of 20,000 from the previous week’s unrevised level of 223,000, the Labor Department reported. The four-week moving average was 236,500, an increase of 2,250 from the previous week’s unrevised average of 234,250.

The average interest rate for a 30-year fixed-rate mortgage is 4.21%, up from 4.10% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.42%, up from 3.32%. 

Market Mirror

Thursday, the Dow gained 2.46 points (0.01%) to finish at 20,858.19, the NASDAQ closed 1.26 points (0.02%) higher at 5,838.81, and the S&P 500 was up 1.89 points (0.08%) at 2,364.87. The Russell 2000 decreased 5.92 points (0.43%) to 1,360.11, and the Wilshire 5000 fell 4.05 points (0.02%) to 24,559.47.

On the NYSE, 3.1 billion shares changed hands with a ratio of 2.3 for declining issues to advancing issues, and on the NASDAQ, 3 billion shares traded, with declining issues outnumbering advancing issues 1.4 to 1.

The price of the 10-year Treasury note was down 12/32, increasing its yield to 2.607%. The price of the 30-year Treasury bond decreased 24/32, bringing its yield up to 3.189%. 

Third Participant Challenges JP Morgan 401(k)
The 401(k) retirement plan offered to employees of JP Morgan Chase Bank is now the target of a third Employee Retirement Income Security Act (ERISA) lawsuit. Plaintiffs assert that various conflicts of interest were permitted to exist within the plan ecosystem, and that the plan’s fiduciaries breached their fiduciary duties of loyalty and prudence by continuing to select and retain “unduly expensive core funds and target-date funds [TDFs].”  Read more >
Can President Trump’s Economic Plans Boost Real Assets in DC Space?
During his first address to a joint session of Congress, President Donald Trump referred to a proposed $1 trillion spending plan to revamp America’s infrastructure. The measure will be immensely difficult to implement even with Republicans fully controlling Congress. But if the president prevails, experts agree his infrastructure spending proposal and other pro-growth economic strategies could have a positive effect on real assets if they are successfully implemented; defined contribution (DC) and defined benefit (DB) plans may be able to take advantage.   Read more >
Pension Plans Strain Largest U.S. Cities
A new survey report from S&P Global Ratings, “Pension Pressures Will Weigh On 15 Largest U.S. Cities’ Budgets,” shows many plans across the country are lowering assumed long-term rates of return in light of global economic headwinds, which further contributes to declining funded ratios and puts a strain on cities’ credit ratings. At a high level the pension systems examined have a median net pension liability per capita which exceeds median debt per capita. They also have “high fixed costs” pegged to the pension and other post-employment benefits, and debt service expenditures are in excess of 20% of expenditures.   Read more >
401(k) plan trading activity was relatively light among DC plan investors during February, according to data provided by Aon Hewitt. When investors made new contributions, equities were favored, with 66.7% of contributions going to equities, up from 66.1% in January.  Read more >
Small Talk

ON THIS DATE: In 1776, “Common Sense” by Thomas Paine was published. In 1864, Ulysses S. Grant became commander of the Union armies in the U.S. Civil War with the rank of lieutenant general, a grade especially revived by Congress for him. In 1876, Alexander Graham Bell made the first successful call with the telephone (“Mr. Watson, come here, I want you”). In 1893, New Me State University canceled its first graduation ceremony – because the only graduate was robbed and killed the night before. In 1964, the first Ford Mustang was produced (though not released to the public until April 16). In 2000, the NASDAQ hit an intra-day high of 5132.52, and then closed at an all-time high of 5048.62.  


And now it’s time for FRIDAY FILES!


In a scene perhaps reminiscent of the Wizard of Oz, in Odessa, Texas, Adan Salcido, 36, was arrested after police say he rode out of Target on a stolen bicycle, along with four other items he had not paid for. CBS 7 reports that in addition to the charge of theft of property with at least two prior convictions, police learned Salcido had four prior convictions for theft in Ector County, and was charged and arrested accordingly.


A man in New Jersey tried to take advantage of the housing market by renting the same house to three different people while turning the keys over to only one of them–a house he didn’t even own, according to The report says Keith Boyce, 54, of Ocean Gate, New Jersey, collected $9,200 in prepaid rent and security deposits from two people who thought they were going to move in, said Ocean County Prosecutor Joseph Coronato. The house was owned by someone else and in foreclosure. Boyce plead guilty to theft and failure to file a state tax return.


In the United Kingdom, police are on the hunt for a man who tried to rob a fish and chip shop with a banana. In Atherton, Greater Manchester a few weeks ago a bandit demanded money while holding what he tried to pass off as a gun inside a bag. However, one of the workers “noticed the object inside his bag was quite bendy,” according to news. Unsurprisingly, he exited without getting any cash.


In Port Everglades, Florida, a couple was in for a rather large surprise when they realized a cruise ship was headed towards their $2.3 million dollar home. The 122,000-ton ship, named Equinox, had apparently only stopped just 100 feet away from the house’s waterfront patio before turning back, one of the homeowners told WPLG-10. Cruise Law News explained the ship was supposed to turn east at the front of the property and out back towards the Atlantic, after an unrelated fuel leakage had blocked the ship from stopping at its original Port Everglades dock. Royal Caribbean Cruises, the owner of Equinox, denied the ship ever touched the patio surface, and the video has since been turned over to Coast Guards for investigation.


In Cleveland, Ohio, a carjacking suspect thought he was having a good run, accused of three armed carjackings in a 10-day period. Damari Wayne, 18, stole three cars at gunpoint between Feb. 11 through Feb. 21, according to a report on Unfortunately for him, the stealing of the third car didn’t quite go as planned. Once Wayne and his 17-year-old accomplice jumped in the car, their plans to speed off were foiled by the stick shift. Even with the original driver of the car trying to explain how to use the gears, they had no luck. Wayne and his accomplice took the man’s cell phone and ran off, and were caught by police shortly thereafter. 

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Editorial: Alison Cooke Mintzer


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