Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 2nd, 2015
PLANSPONSOR Awards
Three Days Left for Plan Sponsor of the Year Nominations!
We are now accepting nominations for the 2016 PLANSPONSOR Plan Sponsor of the Year awards. We are looking for plans of all types—pension (private and public), 401(k), 403(b), 457, public DC, etc.—and of all sizes. Nominations close November 4.Read more >
Products, Deals and People
Retirement Industry People Moves
New hires at Towers Watson and Commonfund, and TRA signs on to VMS recordkeeping and investment platform.Read more >
MOST READ ARTICLES
1
TRIVIAL PURSUITS: Residents of the Island of Misfit Toys
2
2021 Recordkeeping Survey
3
Federal Student Loan Forbearance Is Ending, but Many Employees Aren’t Prepared
4
Satisfying Electronic Disclosure Requirements for SPDs to New Hires
5
Federal Student Loan Forbearance Is Ending, but Many Employees Aren’t Prepared
Economic Events
THE ECONOMIC WEEK AHEAD: Today, the Census Bureau will report about construction spending in September, and tomorrow it will report about factory orders for September. Thursday, the Labor Department will issue its initial claims report. Friday, the Bureau of Labor Statistics will reveal the unemployment rate for October.
Market Mirror

The stock market drifted lower Friday but finished October with its biggest monthly gain in four years, the Associated Press reported. The Dow fell 92.26 points (0.52%) to 17,663.54, the NASDAQ closed 20.53 points (0.40%) lower at 5,053.75, and the S&P 500 decreased 7.20 points (0.34%) to 2,082.21. The Russell 2000 was down 3.76 points (0.32%) at 1,161.86, and the Wilshire 5000 lost 86.75 points (0.40%) to finish at 21,648.51.

On the NYSE, 3.2 billion shares traded, with a slight lead for advancers. On the NASDAQ, 2.7 billion shares changed hands, with 1.4 declining issues for every advancing issue.

The price of the 10-year Treasury note was up 9/32, decreasing its yield to 2.143%. The price of the 30-year Treasury bond increased, bringing its yield down to 2.925%.

WEEK’S WORTH: For the week ending October 30, the Dow was up 0.10%, the NASDAQ climbed 0.44%, and the S&P 500 gained 0.34%. The Russell 2000 slipped 0.36%, and the Wilshire 5000 increased 0.16%.

Compliance
EEOC Proposes Wellness Program Rule Under GINA
The U.S. Equal Employment Opportunity Commission (EEOC) issued a Notice of Proposed Rulemaking (NPRM) to amend the regulations implementing Title II of the Genetic Information Nondiscrimination Act (GINA) as they relate to employer wellness programs that are part of group health plans. The proposed rule would allow employers who offer wellness programs as part of group health plans to provide limited financial and other inducements (also called incentives) in exchange for an employee’s spouse providing information about his or her current or past health status.Read more >
Changes Employers Would See with Budget Bill
Inside the budget deal approved by Congress is a repeal of the automatic enrollment requirement of the Patient Protection and Affordable Care Act (ACA). It is employers that sponsor defined benefit (DB) retirement plans, however, that will see the most effects from the budget bill. The Bipartisan Budget Act of 2015 makes changes to mortality table rules and extends pension funding relief, but it’s not all good news.Read more >
Investing
Plan Sponsors Need Truth, not Jargon
There is lots of buzz in the retirement industry about smart beta, risk parity and responsible investing, but what do these terms actually mean? In an Investment Brief, Segal Rogerscasey’s CIO Tim Barron points out that the investment industry often wraps complicated constructs into simplistic jargon, which doesn’t benefit asset holders, including retirement plan sponsors. “Some concepts are complicated, and they need to understand them,” he tells PLANSPONSOR. “The industry uses jargon in the guise of simplification when the goal should be understanding.”Read more >
Where Pension Plans Parked Assets in 2014
Towers Watson’s analysis of 2014 fiscal year-end asset allocations takes a detailed look at pension disclosures in Fortune 1000 plan sponsors, divided into three categories: frozen pension plans, closed pension plans and open plans. Not surprisingly, Fortune 1000 companies with frozen pension plans went conservative in 2014, while open plans took a bit more risk. What were the investment allocations of plans for which funded status improved?Read more >
Small Talk
ON THIS DATE: In 1783, U.S. Gen. George Washington gave his “Farewell Address to the Army” near Princeton, New Jersey. In 1867, “Harpers Bazaar” magazine was founded. In 1889, North Dakota and South Dakota were admitted into the union as the 39th and 40th states. In 1920, the first commercial radio station in the U.S., KDKA of Pittsburgh, Pennsylvania, began regular broadcasting. In 1930, the DuPont Company announced the first synthetic rubber. It was named DuPrene. In 1948, Harry S. Truman defeated Thomas E. Dewey for the U.S. presidency. The Chicago Tribune published an early edition that had the headline “DEWEY DEFEATS TRUMAN.” The Truman victory surprised many polls and newspapers. In 1983, U.S. President Ronald Reagan signed a bill establishing a federal holiday on the third Monday of January in honor of civil rights leader Dr. Martin Luther King Jr. In 2003, in the U.S., the Episcopal Church diocese consecrated the church’s first openly gay bishop.
SURVEY SAYS RESPONSES: Last week, the Department of Labor (DOL) issued a piece of guidance about the use of environmental, social and governance (ESG) investing principals—what the Department prefers to call economically targeted investments (ETIs)—in retirement plans. A regular PLANSPONSOR contributor, Michael Barry, immediately offered his views about it. Last week, I asked NewsDash readers, “Do you think the DOL’s guidance is a positive or negative for retirement plan sponsors and participants, and what is your reaction to Michael Barry’s thoughts about it?” The majority (55%) of responding readers say the DOL’s guidance about economically targeted investing in retirement plans is a negative for both defined benefit (DB) and defined contribution (DC) plans and participants. One-quarter of respondents were neutral, saying it is neither a positive or negative.
Reaction to Michael Barry’s column was expressed by few, but all were vehement; they agree with him. One reader commented: “I agree that trustees should not be using other people’s money … to be influencing public policy.” General comments about economically targeted investing in retirement plans were vehement as well, and again, most see it negatively. However, there was some distinction between having a trustee decide such investments for a plan (as in DB plans) and offering choices to DC plan participants. “Sitting on a larger pile of money may be of small importance if the planet becomes unable to support life,” one reader said. Editor’s Choice goes to the reader who made this point: “This is not the reason people aren’t saving for retirement… We have a bigger problem on our hands!” Much appreciation to all those who responded to the survey!Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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