Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 13th, 2018
Benefits & Administration
Study Reveals Employer Innovations in Health Coverage
“With the total average annual cost of health care benefits exceeding $12,000 per employee, employers know all too well that rising health care costs threaten their ability to compete in the global marketplace,” a report from Mercer in collaboration with the American Benefits Council says. “Employers are working incredibly hard to slow cost growth while still ensuring employees and their families have access to high-quality care.” Mercer has identified four areas where it believes change is most needed to create a more rational health care marketplace, called the “Vitals for Change.” Read more >
Long-Term Care Needs Not Included in Future Financial Plans for Many
While 56% of Americans say that saving for long-term care (LTC) is one of their top financial priorities, 73% have not planned for their LTC needs, Northwestern Mutual learned in a survey. The study also revealed that while 53% of respondents said they planned to become caregivers, many are unprepared for the financial implications of taking on such a role. Read more >
Sponsors Using TDFs, Auto Enroll to Boost Savings
Retirement plan sponsors are using a range of plan features and a diverse mix of investment options to encourage savings. Large plans have ramped up their target-date fund (TDF) offerings and most plans are automatically enrolling participants, offering employer contributions and making loans available, according to a report created by BrightScope, a Strategic Insight company, and the Investment Company Institute (ICI). “One of the strengths of the 401(k) system is that it allows employers to customize their plans to meet the needs of their unique workforce,” says Sarah Holden, ICI’s senior director of retirement and investor research. Read more >
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Decline in Self-Insured Health Plan Enrollment Masks Growth Among Small Companies
Between 2015 and 2016, the percentage of enrollees in self-insured health plans fell from 60% to 57.8%, according to an analysis from the Employee Benefit Research Institute (EBRI), using data from the Medical Expenditure Panel Survey Insurance Component (MEPS-IC). However, the percentage of all private-sector establishments offering health plans at least one of which is self-insured has continued a growth trend that started in 2000, EBRI notes. The increase has been ongoing among small and mid-sized employers. Read more >
Market Mirror

Yesterday, the Dow closed 157.13 points (0.62%) lower at 25,178.61, the NASDAQ gained 27.52 points (0.36%) to finish at 7,588.33, and the S&P 500 was down 3.55 points (0.13%) at 2,783.02. The Russell 2000 increased 3.91 points (0.25%) to 1,601.06, and the Wilshire 5000 was up 4.33 points (0.02%) at 28,863.88.

 

The price of the 10-year Treasury note was up 8/32, decreasing its yield to 2.865%. The price of the 30-year Treasury bond increased 24/32, bringing its yield down to 3.122%.

Compliance
IRS Expands Audit Guidance for RMDs to 403(b) Plans
A memo says examiners should not challenge a 403(b) plan for violation of the RMD standards for the failure to commence or make a distribution to a participant or beneficiary to whom a payment is due, if the plan sponsor has taken certain steps. Read more >
From the Magazine
Behavioral Finance: Future Shock
More than one in three American workers today are Millennials, or adults ages 18 through 34. In 2015, this group surpassed Generation X to become the largest share of the U.S. work force, according to a Pew Research Center analysis of U.S. Census Bureau data. A survey by BMO Wealth Management finds only 10% of Millennials consider retirement planning a current priority. Meanwhile, 37% say retirement is “too far away to address as a main goal,” particularly in light of more pressing financial responsibilities such as saving for a first home or car purchase. Fully 22% of respondents would prefer to pay off their accumulated debts first, before they start to save for retirement. Stephen Williams, senior vice president of wealth planning at BMO Wealth Management, in Chicago, calls the survey results troubling. Read more >
Small Talk

ON THIS DATE: In 1639, Harvard University was named for clergyman John Harvard. In 1777, the U.S. Congress ordered its European envoys to appeal to high-ranking foreign officers to send troops to reinforce the American army. In 1781, Sir William Herschel discovered the planet Uranus. In 1852, the New York “Lantern” newspaper published the first “Uncle Sam cartoon”. It was drawn by Frank Henry Bellew. In 1865, Confederate President Jefferson Davis signed a bill authorizing slaves to be used as soldiers for the Confederacy. In 1868, the U.S. Senate began the impeachment trial of President Andrew Johnson. In 1877, Chester Greenwood patented the earmuff. In 1884, Standard time was adopted throughout the U.S. In 1901, Andrew Carnegie announced that he was retiring from business and that he would spend the rest of his days giving away his fortune. His net worth was estimated at $300 million. In 1911, the U.S. Supreme Court approved corporate tax law. In 1925, a law in Tennessee prohibited the teaching of evolution. In 1930, it was announced that the planet Pluto had been discovered by scientist Clyde Tombaugh at the Lowell Observatory. In 1933, U.S. banks began to re-open after a “holiday” that had been declared by President Franklin Roosevelt. In 1935, three-thousand-year-old archives were found in Jerusalem confirming some biblical history. In 1942, Julia Flikke of the Nurse Corps became the first woman colonel in the U.S. Army. In 1951, the comic strip “Dennis the Menace” appeared for the first time in newspapers across the country. In 1969, the Apollo 9 astronauts returned to Earth after the conclusion of a mission that included the successful testing of the Lunar Module. In 1974, an embargo imposed by Arab oil-producing countries was lifted. In 1991, Exxon paid $1 billion in fines and for the clean-up of the Alaskan oil spill. In 2006, in New York City, the official start of construction of the National September 11 Memorial & Museum began. In 2012, after 244 years of publication, Encyclopædia Britannica announced it would discontinue its print edition.

 

 

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

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