Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 21st, 2018
Benefits & Administration
Stakeholders Say Auto-Portability Complements Modern Plan Design
Earlier this month, the U.S. Department of Labor (DOL) issued a notice of a proposed exemption from certain prohibited transaction restrictions of the Employee Retirement Income Security Act (ERISA) to Retirement Clearinghouse (RCH) for use of its auto-portability solution. While limited to RCH’s offering, the still-preliminary move from DOL quickly gained attention in the retirement plan industry, wherein the wider topic of automatic account portability has been touted as a primary way to reduce leakage from tax-qualified retirement savings accounts. Read more >
Investing
Retirement Plans a Big Source of Mutual Fund Investing for Millennials
By comparison, the majority of mutual fund investing for Baby Boomers is outside of an employer-sponsored retirement plan, Investment Company Institute data shows. Read more >
Too Much Employer Stock Could Be a Bad Thing
According to a nationwide survey from Schwab Stock Plan Services, equity compensation accounts on average for nearly 30% of employees’ net worth, and almost three-quarters of employees surveyed also own company stock outside of their equity compensation plan. “Markets are uncertain, so participants should understand the risks of having too much of their net worth concentrated in company stock,” Marc McDonough, senior vice president, Schwab Workplace Financial Solutions, tells PLANSPONSOR. He suggests plan sponsors should, at a minimum, ensure that education is available for their employees and they know where to go with questions. Read more >
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Financially Well Employees Buoy the Bottom Line
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401(k) Plan Sponsors Enhancing Plan Design
Economic Events

Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,228,000, the Census Bureau reported. This is 1.5% above the revised September estimate of 1,210,000, but is 2.9% below the October 2017 rate of 1,265,000. Single‐family housing starts in October were at a rate of 865,000; this is 1.8% below the revised September figure of 881,000. The October rate for units in buildings with five units or more was 343,000.

Market Mirror

Tuesday, the Dow dropped 551.80 points (2.21%) to 24,465.64, the NASDAQ fell 119.65 points (1.70%) to 6,908.82, and the S&P 500 lost 48.84 points (1.82%) to finish at 2,641.89. The Russell 2000 closed 27.53 points (1.84%) lower at 1,469.01, and the Wilshire 5000 dropped 499.28 points (1.80%) to 27,202.98.

 

The price of the 10-year Treasury note was up 2/32, decreasing its yield to 3.063%. The price of the 30-year Treasury bond was up 2/32, decreasing its yield to 3.319%.

Sponsored message from OneAmerica
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Compliance
Health Care System Sued Over Retirement Plans’ Governmental Status
A lawsuit alleges a health care system in North Carolina falsely claims to be a governmental entity, allowing it to dodge Employee Retirement Income Security Act (ERISA) requirements and protections for its retirement and health plans. Read more >
Ask the Experts
403(b) Treatment of Payment to Employee After Retirement
“I work with a plan sponsor at a private high school. The school has a contractual agreement to pay a former administrator who retired last year $15,000 in 2018. Is the payment considered to be ‘compensation’ for retirement plan purposes, and is the plan sponsor thus obligated to withhold elective deferrals from this amount (the administrator was making elective deferrals to a 403(b) plan) and make the plan’s matching contribution with respect to those deferrals? The employee is a highly compensated employee if that makes a difference.” Read more >
Small Talk

ON THIS DATE: In 1620, the Mayflower reached Provincetown, Massachusetts. In 1783, the first successful flight was made in a hot air balloon. The pilots, Francois Pilatre de Rosier and Francois Laurent, Marquis d’Arlandes, flew for 25 minutes and 5½ miles over Paris. In 1789, North Carolina became the 12th state to ratify the U.S. Constitution. In 1877, Thomas A. Edison announced the invention of his phonograph. In 1922, Rebecca L. Felton of Georgia was sworn in as the first woman to serve as a member of the U.S. Senate. In 1929, Spanish surrealist Salvador Dali had his first art exhibit. In 1934, the New York Yankees purchased the contract of Joe DiMaggio from San Francisco of the Pacific Coast League. In 1962, President John Kennedy terminated the quarantine measures against Cuba. In 1980, an estimated 83 million viewers tuned in to find out “who shot J.R.” on the CBS prime-time soap opera “Dallas.” In 1993, the House of Representatives voted against making the District of Columbia the 51st state. In 1995, the Dow Jones Industrial Average closed above the 5,000-mark for the first time. In 2000, the Florida Supreme Court granted Al Gore’s request to keep the presidential recounts going. In 2001, Microsoft Corp. proposed giving $1 billion in computers, software, training and cash to more than 12,500 of the poorest schools in the U.S. The offer was intended as part of a deal to settle most of the company’s private antitrust lawsuits. In 2013, the Dow Jones Industrial Average closed above 16,000 for the first time.

 

 

WEDNESDAY WISDOM: “Happiness is not something ready made. It comes from your own actions.”—Dalai Lama

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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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