Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 25th, 2019
Benefits & Administration
Increasing Health Care Costs Have Implications for Retirement Savings
As much as people try to understand their financial needs in retirement, one unknown cost is health care. Despite the existence of Medicare insurance for seniors, it does not cover all costs and health care can be extremely expensive, particularly as one ages. For instance, according to the analysis “Healthcare Costs & Spend: Rising by Age, Gender, and Race” by registerednursing.org, by the time one reaches age 65, average health care costs are $11,300 per person, per year—nearly triple the annual average cost of those in their 20s and 30s. Read more >
Fourth Quarter Volatility Wipes Out DB Plans’ Funding Status Gains
Despite higher interest rates and significant contributions by pension plans, their funding status rose only 70 basis points last year, according to a new report from Goldman Sachs, “2018 Pension Review ‘First Take:’ Groundhog Day.” While some plans notably increased fixed-income allocations, likely linked to significant contribution activity and the intra-year rise in funded levels last year, other pension plans may not have been able to act before the volatility of the fourth quarter erased gains. Read more >
PLANSPONSOR Awards
Get to Know Our Plan Sponsor of the Year Finalists
Profiles are now online for PLANSPONSOR’s 2019 Plan Sponsor of the Year finalists in the Total Retirement Offering category. Read more >
MOST READ ARTICLES
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Principal Pledges Seamless Transition for Wells Fargo Recordkeeping Clients
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Study Suggests Reasons Most Physical Wellness Programs Don’t Work
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Lowe’s Defense Fails to Get ERISA Suit Dismissed
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Schwab Arbitration Ruling Leaves Unanswered Questions
5
Employer Health Benefit Costs to Rise 6.5% in 2020
Economic Events

Existing-home sales rebounded strongly in February, experiencing the largest month-over-month gain since December 2015, according to the National Association of Realtors. Three of the four major U.S. regions saw sales gains, while the Northeast remained unchanged from last month. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, shot up 11.8% from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales are down 1.8% from a year ago (5.61 million in February 2018).

 

January sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, were $499.8 billion, up 0.5% from the revised December level and up 2.7% from the January 2018 level. The November 2018 to December 2018 percent change was revised from the preliminary estimate of down 1.0% to down 0.9%.

 

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing starts for February, and the Conference Board will issue its Consumer Confidence Index for March. Thursday, the Labor Department will issue its initial claims report. Friday, the Census Bureau will report about new home sales for February.

Market Mirror

Friday, the Dow tumbled 460.19 points (1.77%) to 25,502.32, the NASDAQ gave up 196.29 points (2.50%) to close at 7,642.67, and the S&P 500 shed 54.17 points (1.90%) to finish at 2,800.71. The Russell 2000 was down 56.49 points (3.62%) at 1,505.92, and the Wilshire 5000 lost 620.69 points (2.10%) to close at 28,909.55.

 

The price of the 10-year Treasury note was up 27/32, lowering its yield to 2.436%, and the 30-year Treasury bond was up 20/32, lowering its yield to 2.869%.

 

WEEK’S WORTH: For the week ended March 22, the Dow was down 1.34%, the S&P 500 lost 0.77% and the NASDAQ declined by 0.60%. The Russell 2000 lost 3.07% and the Wilshire 5000 gave up 0.97%.

Products, Deals and People
Fidelity Workplace Giving Pairs Charity and Retirement
Fidelity Investments introduced the Fidelity Workplace Giving program, created to allow employers to integrate charitable giving into their current benefits program while offering employees a way to manage philanthropic activities. Explaining the firm’s thinking in launching this new solution, Kevin Barry, president of workplace investing at Fidelity Investments, points to data showing employees are increasingly interested in working for organizations that are socially responsible and offer benefits such as volunteer opportunities or charitable giving programs. Read more >
Retirement Industry People Moves
Schroders adds promotions and hires to distribution team; Niles Lankford Group rebrands to Latitude; and Franklin Templeton names IPM for emerging markets team. Read more >
Small Talk

ON THIS DATE: In 1609, Henry Hudson left on an exploration for Dutch East India Co. In 1865, during the American Civil War, Confederate forces captured Fort Stedman in Virginia. In 1911, in New York City, 146 women were killed in fire at the Triangle Shirtwaist Company in New York City. The owners of the company were indicted on manslaughter charges because some of the employees had been behind locked doors in the factory. In 1954, RCA manufactured its first color TV set and began mass production. In 1965, Martin Luther King Jr. led a group of 25,000 to the state capital in Montgomery, Alabama. In 1966, the U.S. Supreme Court ruled that the “poll tax” was unconstitutional. In 1971, the Boston Patriots became the New England Patriots. In 1982, Wayne Gretzky became the first player in the NHL to score 200 points in a season. In 1983, Congress passed legislation to rescue the U.S. social security system from bankruptcy. In 1996, the U.S. issued a newly redesigned $100 bill for circulation.

SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “When do you usually file your income tax return?” Four in ten (40.9%) responding readers indicated they file their income tax return as soon as they have the information they need; 44.3% do so whenever they get to it, but before the April 15 deadline; 10.2% file their return on April 15; and 4.5% said they typically file for an extension. Many readers who chose to leave verbatim comments said they file early if expecting a refund and late if expecting to pay. Some said it is best to file early either way so you know your situation or just to get it over with. Several, like me, said they were surprised this year, but it wasn’t always due to tax reform. And, there were readers who expressed thoughts about refunds as interest-free loans to the government. Editor’s Choice goes to the reader who said, “Death and taxes, you can’t avoid them. But may you plan wisely so neither is a surprise.” Thanks to everyone who participated in the survey! Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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