Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 14th, 2019
Compliance
IBM Petitions Supreme Court to Consider Dudenhoeffer Pleading Standard
IBM has asked the U.S. Supreme Court to weigh in on a 2nd U.S. Circuit Court of Appeals decision which reversed the company’s District Court win in a lawsuit alleging imprudence in managing company stock investments in one of its retirement plans. Specifically, the Retirement Plans Committee of IBM and other defendants ask the court to answer “Whether Fifth Third’s ‘more harm than good’ pleading standard can be satisfied by generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time.” Read more >
Parties in Brown University 403(b) Suit Agree to Settle
The settlement agreement calls for a $3.5 million payment from Brown, as well as non-monetary relief. Read more >
Benefits & Administration
AAA Subsidiary Announces Student Loan Repayment Benefit for Its Employees
With the benefit tied to its 401(k) plan, CSAA says 60% of its employees are contributing to the 401(k) for the first time or were not taking full advantage of the company’s 6% match prior to the program. Read more >
MOST READ ARTICLES
1
IRS Issues Guidance About Uncashed Retirement Plan Distributions
2
Options for Providing Student Loan Repayment Benefits Increasing
3
Taking a ‘Calculated’ Approach to Retirement Readiness
4
Litigators Share What They Investigate for Filing TDF Lawsuits
5
Government Prosecutors Weigh In on Supreme Court IBM Case
Economic Events

Construction spending during January was estimated at a seasonally adjusted annual rate of $1,279.6 billion, 1.3% above the revised December estimate of $1,263.1 billion, the Census Bureau reported. The January figure is 0.3% above the January 2018 estimate of $1,276.3 billion.

New orders for manufactured durable goods in January increased $0.9 billion or 0.4% to $255.3 billion, the U.S. Census Bureau announced. This increase, up three consecutive months, followed a 1.3% December increase. Excluding transportation, new orders decreased 0.1%. Excluding defense, new orders increased 0.7%. Transportation equipment, up five of the last six months, drove the increase, $1.0 billion or 1.2% to $90.9 billion.

The Producer Price Index for final demand edged up 0.1% in February, as prices for final demand goods rose 0.4%, while the index for final demand services was unchanged, according to the Bureau of Labor Statistics. The final demand index increased 1.9% for the 12 months ended in February.

Market Mirror

Wednesday, the Dow closed 148.23 points (0.58%) higher at 25,702.89, the NASDAQ climbed 52.37 points (0.69%) to 7,643.41, and the S&P 500 gained 19.40 points (0.69%) to finish at 2,810.92. The Russell 2000 was up 6.05 points (0.39%) at 1,555.88, and the Wilshire 5000 increased 190.54 points (0.66%) to 29,095.63.

The price of the 10-year Treasury note was down 2/32, increasing its yield to 2.614%. The price of the 30-year Treasury bond decreased 12/32, bringing its yield up to 3.012%.

Investing
Cerulli Finds All Talk, No Action Regarding DC Plan ESG Investment Adoption
Cerulli Associates found fee sensitivity and the notion that environmental, social and governance (ESG) investing entails a trade-off in performance are two broadly applicable headwinds to ESG adoption. Read more >
Average SDBA Balances Fall to $246,153
The market volatility that occurred in the fourth quarter of 2018 weighed heavily on retirement plan participants’ self-directed brokerage accounts (SDBAs), with the average balance falling by 10.6% from the previous quarter to $246,153. Year-over-year, balances were down 6.3%. At 37%, mutual funds held the highest percentage of participant SDBA assets, on par with the fourth quarter of 2017. Read more >
Products, Deals and People
Cash Back Used Towards Retirement Savings?
With EvoShare, employees can spend as usual at over 10,000 participating businesses and receive up to 20% cash back toward a 401(k) or 403(b) plan, student loan, and/or 529 plan. Read more >
Small Talk

ON THIS DATE: In 1629, a Royal charter was granted to the Massachusetts Bay Colony. In 1794, Eli Whitney received a patent for his cotton gin. In 1900, U.S. currency went on the gold standard with the ratification of the Gold Standard Act. In 1914, Henry Ford announced the new continuous motion method to assemble cars. The process decreased the time to make a car from 12½ hours to 93 minutes. In 1951, U.N. forces recaptured Seoul for the second time during the Korean War. In 1964, a Dallas jury found Jack Ruby guilty of the murder of Lee Harvey Oswald, the man charged in the assassination of President John Kennedy. In 1995, astronaut Norman Thagard became the first American to enter space aboard a Russian rocket. In 1996, President Bill Clinton committed $100 million for an anti-terrorism pact with Israel to track down and root out Islamic militants.

SURVEY SAYS: Health savings accounts (HSAs) are now being touted as a way for saving for health care expenses in retirement, but is this feasible? A recent report found employees spend 90% of their HSA assets on current medical expenses, leaving little to save/invest for the long term. This week, I’d like to know, do you think it is feasible to expect employees to save in health savings accounts (HSAs) for the long term? 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 alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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