Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 19th, 2015
Benefits & Administration
Confidence Not Reflective of Planning Efforts
More than 1.5 million people will retire every year from now until 2025, the LIMRA Secure Retirement Institute says in its latest research. The research found that just more than half of pre-retirees (ages 50 to 75 with at least $100,000 in household investable assets) are confident in their retirement security based on their self-assessed ability to manage finances (62%) and the expectation of living modestly in retirement (59%). However, study results published in the Institute’s new “2015 Retirement Income Reference Book” reveal only 20% actually have a formal retirement plan, and less than 40% have done basic planning activities. However, those numbers change when pre-retirees have an adviser.Read more >
Roth Conversions Helpful to Retirement Savings Strategy
There are benefits of converting pre-tax retirement plan accounts to a Roth account, but plan participants, and perhaps even sponsors, don’t understand them.Read more >
MOST READ ARTICLES
1
The DOL Has Begun Retirement Plan Cybersecurity Audits
2
2021 Target-Date Fund Survey
3
2020 Recordkeeping Survey
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Differences Between Safe Harbor and Traditional DC Plans
5
TRIVIAL PURSUITS: What do the M’s stand for in M&Ms?
Economic Events
Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,060,000, according to the Census Bureau. This is 11% below the revised September estimate of 1,191,000 and is 1.8% below the October 2014 rate of 1,079,000. Single-family housing starts in October were at a rate of 722,000; this is 2.4% below the revised September figure of 740,000. The October rate for units in buildings with five units or more was 327,000.
Market Mirror

Major U.S. stock indices had their biggest gain in four weeks as investors were encouraged by corporate deal news, according to the Associated Press. The Dow rose 247.66 points (1.42%) to 17,737.16, the NASDAQ climbed 89.19 points (1.79%) to 5,075.20, and the S&P 500 gained 34.41 points (1.68%) to finish at 2,084.85. The Russell 2000 increased 18.54 points (1.61%) to 1,171.74, and the Wilshire 5000 closed 337.26 points (1.58%) higher at 21,638.00.

On the NYSE, 3.2 billion shares traded, with advancing issues outnumbering declining issues more than 3 to 1. On the NASDAQ, 2.7 billion shares changed hands, with a more than 2 to 1 lead for advancers.

The price of the 10-year Treasury note decreased, bringing its yield up to 2.271%. The price of the 30-year Treasury bond increased 8/32, bringing its yield down to 3.044%.

Compliance
City’s Retirement Plan Claims Against Buck Dismissed
A U.S. district court has dismissed a lawsuit in which the city of Providence, Rhode Island, claimed a miscalculation by Buck Consultants caused it to miss out on cost savings for its pension plan by leading it to settle a lawsuit with a union and retirees. The city alleges that Buck overestimated the amount the city would save by suspending cost-of-living adjustments (COLAs) for the city’s pension plans, causing it to negotiate and approve a settlement with the unions representing police officers and firefighters, as well as the association representing retired police officers and firefighters, which it would not have agreed to had it known of Buck’s error. The city and the Providence Retired Police and Firefighters’ Association, Inc. were ordered into mediation in litigation concerning the constitutionality of a pension ordinance that would suspend COLAs for the pension plan as of January 1, 2013.Read more >
Will State Run Plans Help Close the Coverage Gap?
PLANSPONSOR caught up with David Levine, principal and ERISA specialist with Groom Law Group in Washington, D.C., a few days after the Department of Labor (DOL) published much-anticipated and increasingly controversial pieces of guidance to aid states with offering retirement planning solutions to private-sector workers who lack access to tax-qualified retirement plans at work. Levine discussed the challenges for, and potential positive outcomes from, DOL guidance about state-run retirement plans for the private sector.Read more >
From the Magazine
2015 PLANSPONSOR DC Survey
A year has passed since PLANSPONSOR’s last Defined Contribution (DC) Survey, and many of the things that were said last year can be repeated: Recordkeeping is a low-margin service, meaning consolidation in the defined contribution plan recordkeeping market continues, and the platform differentiators between such providers are becoming less distinct, making it tougher for plan sponsors to find the unique characteristics of a provider that would make it the best fit for a particular plan. One concern among those in the industry searching for providers—such as consultants and plan sponsors—is that, as mergers and acquisitions increase, the market will have fewer and fewer recordkeepers to bid on many plans.Read more >
Small Talk
ON THIS DATE: In 1863, U.S. President Lincoln delivered his Gettysburg Address as he dedicated a national cemetery at the site of the Civil War battlefield in Pennsylvania. In 1895, the “paper pencil” was patented by Frederick E. Blaisdell. In 1928, “Time” magazine presented its cover in color for the first time. The subject was Japanese Emperor Hirohito. In 1959, Ford Motor Co. announced it was ending the production of the unpopular Edsel. In 1969, Apollo 12 astronauts Charles Conrad and Alan Bean made man’s second landing on the moon. In 1984, Dwight Gooden of the New York Mets, became the youngest major-league pitcher, at age 20, to be named Rookie of the Year in the National League. In 2001, U.S. President George W. Bush signed the most comprehensive air security bill in U.S. history. In 2007, the Amazon Kindle was first released.
SURVEY SAYS: There has been much controversy in the news about stores opening for shoppers on Thanksgiving, but a recent survey indicates more people plan to shop that day than the day after (Black Friday). This week, I’d like to know, will you shop during the Thanksgiving holiday weekend, and how do you feel about stores opening for shoppers on Thanksgiving Day? You may respond to this survey by 6 p.m. Pacific time today.Read more >
Share the good news with a friend! Pass the Dash 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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