Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
May 2nd, 2016
Benefits & Administration
The total savings rate for 401(k) savers hit a record level in Q1 2016, Fidelity reports. Its quarterly analysis of Fidelity-administered 401(k) and individual retirement accounts (IRAs) finds the total savings rate for 401(k) savers, which combines individual contributions plus employer contributions, reached 12.7% in Q1, topping the previous record high of 12.5% in Q1 2008. In addition, a record 13.6% of 401(k) investors increased their savings rate in Q1, an increase from the previous high of 12.9% in Q1 of 2015.Read more >
Employers Expand Ways to Get Financial Ed. to Employees
The International Foundation of Employee Benefit Plans (IFEBP) encourages the use of “workplace champions” to steer co-workers to retirement planning and financial wellness education.Read more >
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Products, Deals and People
Retirement Industry People Moves
Lincoln Retirement Plan Services Expands Product Team; TIAA Global Asset Management Unifies DCIO Team; Eng Rejoins AB in Custom DC Solutions, and more.Read more >
Economic Events
THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about construction spending for March, and Wednesday, it will report about factory orders for March. Thursday, the Labor Department will issue its initial claims report, and Friday, the Bureau of Labor Statistics will reveal the unemployment rate for April.
Market Mirror

Friday, the Dow lost 57.12 points (0.32%) to finish at 17,773.64, the NASDAQ closed 29.93 points (0.62%) lower at 4,775.36, and the S&P 500 decreased 10.50 points (0.51%) to 2,065.31. The Russell 2000 was down 9.55 points (0.84%) at 1,130.84, and the Wilshire 5000 fell 108.12 points (0.50%) to 21,377.59.

On the NYSE, 3.1 billion shares traded with 1.3 declining issues for every advancing issue. On the NASDAQ, 2.7 billion shares changed hands, with a near 2 to 1 lead for decliners.

The price of the 10 year Treasury note was down 3/32, bringing its yield up to 1.833%. The price of the 30-year Treasury bond was up 3/32, bringing its yield down to 2.677%.

WEEK’S WORTH: For the week ending April 29, the Dow finished 1.28% lower, the NASDAQ fell 2.67%, and the S&P 500 decreased 1.26%. The Russell 2000 lost 1.38%, and the Wilshire 5000 was down 1.13%.
Compliance
DOL Obtains $10M for Retirement Plans from Invesco
The agency contended Invesco Trust Co. failed to inform retirement plan investors of efforts to bolster the value of its Short-Term Investment Fund.Read more >
From the Magazine
The Plan Committee Brain
Employers should be aware of their reasons and philosophy for offering a defined contribution (DC) plan or they may risk unintended results. The plans have been referred to as both retirement plans and savings vehicles, and budgeting for each brings significantly different outcomes. The retirement plan committee can take a conservative viewpoint and design the plan with minimal employer costs and traditional plan design without much innovation or personalization; alternatively, it can choose a progressive stance, adopting innovative design features, alongside a robust participant offering and increased employer contributions.Read more >
Investing
The first quarter of 2016 marked the second consecutive gain for institutional asset owners after two consecutive losses beginning in the second quarter of 2015, with plan sponsors gaining approximately 0.7% at the median, according to data from the Northern Trust Universe. Corporate Employee Retirement Income Security Act (ERISA) plans had the best performance in the quarter with a return of 2.2% at the median. Northern Trust explains why.Read more >
Managed Accounts and TDFs Running Parallel
New research from Cerulli Associates argues managed accounts and target-date funds each have distinct roles to play on the retirement plan investment menu.Read more >
Small Talk
ON THIS DATE: In 1776, France and Spain agreed to donate arms to American rebels fighting the British. In 1863, Confederate Gen. Thomas “Stonewall” Jackson was wounded by his own men in the battle of Chancellorsville, Virginia. He died eight days later. In 1885, the magazine “Good Housekeeping” was first published. In 1890, the Oklahoma Territory was organized. In 1932, Jack Benny’s first radio show debuted on NBC Radio. In 1939, Lou Gehrig set a new major league baseball record when he played in his 2,130th game. The streak began on June 1, 1925. In 1970, student anti-war protesters at Ohio’s Kent State University burned down the campus ROTC building. The National Guard took control of the campus. In 1974, former U.S. Vice President Spiro T. Agnew was disbarred by the Maryland Court of Appeals. In 1994, Nelson Mandela claimed victory after South Africa’s first democratic elections.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, ”Have you obtained a retirement readiness gap analysis; how did it make you feel in terms of being prepared or on track for retirement; and did it motivate you to take certain savings actions?” Nearly all (91.9%) of respondents have obtained a retirement readiness gap analysis for themselves. Among those, one-quarter said it made them feel very prepared for retirement, and 36.1% indicated it made them feel somewhat prepared. However, 22.2% of respondents indicated the gap analysis made them feel somewhat behind in preparing for retirement, and 2.8% said it made them feel not prepared and not on track. As for motivation to take action, one-quarter of respondents increased their savings rate in response to the gap analysis, 22.2% changed investment options and 16.7% scheduled a one-on-one planning session with a retirement plan provider or adviser. Thoughts about gap analyses were mixed, with some saying the limited input and questionable projections make them unrealistic and others saying they are a helpful tool and result in better savings actions. There were also some who noted a gap analysis can be very discouraging. Editor’s Choice goes to the reader who said, “It appears that I will be a NewsDash reader for many more years!” A big thank you to everyone who participated in the survey!Read more >
Share the good news with a friend! Pass the NewsDash along—and tell your friends/associates they can sign up for their own copy.Read more >

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

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