Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 30th, 2015
Editor’s Note
Today, we bring you a special edition of NewsDash, highlighting findings of our 2015 Defined Contribution Survey.
PLANSPONSOR 2015 DC Survey Insights
Insights: Happily Ever After
Our 2015 Defined Contribution (DC) Survey of plan sponsors shows more sponsors say they formally evaluate their provider annually, up to 64% from 30% in 2010—experts generally suggest every three years or so is sufficient. We’ve also seen a continued trend of long-tenured relationships with recordkeepers; 48% of plan sponsors have spent seven years or more with their providers. Some naysayers have suggested that these two data points are at odds—in other words, if plan sponsors really are reviewing their providers regularly, tenures should start to shorten. I don’t agree. In fact, I think there may be reasons that more frequent benchmarking can lead to longer provider tenures.Read more >
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2015 PLANSPONSOR Defined Contribution Survey
One concern among those in the defined contribution (DC) retirement plan industry searching for providers is that, as mergers and acquisitions increase, the market will have fewer and fewer recordkeepers to bid on many plans. “I’ve started to hear from consultants raising concerns that they’ve done requests for proposals [RFPs] and received only one bid back—and that’s been from the incumbent,” says Tim Rouse, executive director of The SPARK Institute, in Simsbury, Connecticut. “This isn’t so much about the mergers per se, but, as fees drop, recordkeepers are getting pickier, choosing clients because of the expense of the conversion to their platform, so in turn they take a pass on these RFPs.”Read more >
DC Survey Industry Stats
The annual PLANSPONSOR Defined Contribution Survey asks plan sponsors to rank the services they receive from their defined contribution plan recordkeeper—specifically, 13 participant services and 10 sponsor services. This year, not one of the participant or sponsor service categories saw increased satisfaction scores, reversing a two-year trend. In fact, a few categories showed significant declines in “top box” satisfaction—“Enrollment assistance” is down 19.6% from its 2014 score; “Loan/Withdrawal processing” fell 13.6%; and “Participant fee disclosure” dropped 10.2%, while “Form 5500 processing” is down 14%, and “Legislative/Regulatory updates” slipped 10.9%.Read more >
Economic Events

Sales of new single-family houses in October were at a seasonally adjusted annual rate of 495,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 10.7% above the revised September rate of 447,000 and is 4.9% above the October 2014 estimate of 472,000.

New orders for manufactured durable goods in October increased $6.9 billion or 3.0% to $239.0 billion, the U.S. Census Bureau announced. This increase, up following two consecutive monthly decreases, followed a 0.8% September decrease. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders increased 3.2%. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $6.1 billion or 8.0% to $82.1 billion. 

The average interest rate for a 30-year fixed-rate loan was 3.95% last week, down from 3.97% one week prior, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage was 3.18%, unchanged from the previous week.

In the week ending November 21, the advance figure for seasonally adjusted initial claims for unemployment insurance was 260,000, a decrease of 12,000 from the previous week’s revised level, the Labor Department reported. The four-week moving average was 271,000, unchanged from the previous week’s revised average.

ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about construction spending for October. Thursday, the Labor Department will issue its initial claims report, and the Census Bureau will report about factory orders for October. Friday, the Bureau of Labor Statistics will reveal the unemployment rate for November.

Market Mirror

Friday, the Dow was down 14.90 points (0.08%) at 17,798.49, the NASDAQ closed 11.38 points (0.22%) lower at 5,127.52, and the S&P 500 increased by 1.24 (0.06%) to 2,090.11. The Russell 2000 gained 4.36 points (0.36%) to finish at 1,202.37, and the Wilshire 5000 was up 19.47 points (0.09%) at 21,761.34.

On the NYSE, 3.1 billion shares changed hands, with 3 advancing issues for every 2 declining issues. On the NASDAQ, 2.6 billion shares traded, with 1.7 advancers for every decliner.

The yield on the 10-year Treasury note was 2.223%. The yield on the 30-year Treasury bond was 2.998%.

2015 DC Survey Rankings
DC Survey Top 5
Our DC Survey’s Net Recommendation/Promoter Score represents the percentage of respondents “very likely to recommend” the provider (i.e., to give it a score of 9 or 10 on a 10-point scale) minus the percentage of scores of 6 or below (i.e., “neutrals” and those “likely to recommend against”). See which providers ranked in the top five for each plan size category.Read more >
DC Survey Provider Listing
Want to see how your provider fared in the PLANSPONSOR 2015 DC Survey? You can filter results for a specific firm.Read more >
“Best in Class” Awards
“Best in Class” awards are based on the average rating received by a provider in our DC Survey in each of 23 service attributes, with the three highest-scoring providers earning Best in Class awards and those providers with an average score above the asset group’s benchmark score, also listed in each chart, being deemed Best in Class.Read more >
Small Talk
ON THIS DATE: In 1782, the United States and Britain signed preliminary peace articles in Paris, ending the Revolutionary War. In 1858, John Landis Mason received a patent for the first pepper shaker with a screw-on cap. In 1940, Lucille Ball and Cuban musician Desi Arnaz were married. In 1993, U.S. President Clinton signed into law the Brady Bill. The bill required a five-day waiting period for handgun purchases and background checks of prospective buyers.
SURVEY SAYS REWIND: It seems some things never change. Eleven years ago, we asked NewsDash readers why participants aren’t doing more to ensure they are prepared for retirement.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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