Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
November 5th, 2018
Benefits & Administration
Adjustments to Retirement Plan Websites Can Boost Deferrals
The Voya Behavioral Finance Institute for Innovation, in conjunction with Carnegie Mellon University, the University of London and UCLA, decided to conduct a study to determine if relatively simple adjustments to a retirement plan website would have an impact on participants. The findings reveal that the changes inspired participants to personalize their enrollment, to take advantage of the company match and to increase their savings. Read more >
Auto-IRAs Could Reduce Retirement Savings Shortfall by 16%
The Employee Benefit Research Institute (EBRI) estimates that the national retirement deficit, or retirement savings shortfall (RSS), is $4.13 trillion for households headed by those between the ages of 35 and 64. In an attempt to better understand the shortfall and to promote potential solutions, EBRI decided to look closer at the way a number of states have launched their own automatic retirement savings initiatives. According to EBRI, the first one to come online was OregonSaves. The results show the RSS could be reduced by up to 16% for the youngest individuals. Read more >
Products, Deals and People
Retirement Industry People Moves
Client engagement expert joins Transamerica; Ascensus acquires Pension Works for TPA division; Buckley replaces McNabb as Vanguard chairman; and more. Read more >
MOST READ ARTICLES
1
IRS Announces 2019 HSA Contribution Limits
2
IRS Proposes Amendments to Hardship Withdrawal Regulations
3
Retirement Industry People Moves
4
Crash Course on Social Security From AARP
5
Analysis Shows Impact of Financial Wellness Programs on Retirement Readiness
SafetyNet Offers ‘Cookie Jar’ for Emergency Savings
The financial wellness program rounds up debit card purchases and checking account transactions to the nearest dollar and stores the change in employees’ Cookie Jar savings accounts. Read more >
Economic Events

New orders for manufactured durable goods in September increased $2.0 billion or 0.8% to $262.1 billion, the U.S. Census Bureau announced. This increase, up three of the last four months, followed a 4.6% August increase. Excluding transportation, new orders increased 0.1%. Excluding defense, new orders decreased 0.6%. Transportation equipment, also up three of the last four months, led the increase, $1.8 billion or 1.9% to $97.4 billion.

 

Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7%, the Bureau of Labor Statistics revealed. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.

 

THE ECONOMIC WEEK AHEAD: Thursday, the Labor Department will issue its initial claims report. Friday, the Bureau of Labor Statistics will reveal the producer price index for October, and the Census Bureau will report about wholesale trade for September.

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Market Mirror

Friday, the Down closed 109.91 points (0.43%) lower at 25,270.83, the NASDAQ lost 77.06 points (1.04%) to finish at 7,356.99, and the S&P 500 was down by 17.31 points (0.63%) to end at 2,723.06. The Russell 2000 increased by 3.00 points (0.19%) to close at 1,547.98, and the Wilshire 5000 fell by 156.05 points (0.55%) to end at 28,177.01.

 

The price of the 10-year Treasury note was down by 22/32, increasing its yield to 3.217%. The price of the 30-year Treasury bond decreased by 1 16/31 to boost its yield to 3.461.

 

WEEK’S WORTH: For the week ending November 2, the Dow increased 2.36%, the S&P 500 gained 2.42%, and the NASDAQ was up by 2.65%. The Russell 2000 was up by 4.32%, and the Wilshire 5000 was up by 2.73%.

From the Magazine
Helping to Build Emergency Savings
Nearly 40% of Americans with 401(k) accounts have borrowed against them over the last five years, but implementing an emergency savings account can lessen this. Read more >
Small Talk

ON THIS DATE: In 1605, the “Gunpowder Plot” attempted by Guy Fawkes failed when he was captured before he could blow up the English Parliament. Guy Fawkes Day is celebrated every November 5th in Britain to celebrate his failure to blow up all the members of Parliament and King James I. In 1872, in the U.S., Susan B. Anthony was fined $100 for attempting to vote in the presidential election. She never paid the fine. In 1895, George B. Selden received the first U.S. patent for an automobile. He sold the rights for $200,000 four years later. In 1935, the game “Monopoly” was introduced by Parker Brothers Company. In 1940, President Franklin Roosevelt won an unprecedented third term in office. In 1946, John F. Kennedy was elected to the U.S. House of Representatives at the age of 29. In 1959, the American Football League was formed. In 1994, George Foreman, 45, became boxing’s oldest heavyweight champion when he knocked out Michael Moorer in the 10th round of their WBA fight in Las Vegas. In 1999, a 12-day conference on global warming, attended by delegates from 170 nations, ended in Bonn, Germany.

SURVEY SAYS: 40th Anniversary of the 401(k): In recognition of the 40th anniversary of the introduction of 401(k) plans, last week, I asked NewsDash readers, “Do you think 401(k) plans are sufficient for employees to obtain retirement security? Also, what changes to 401(k) plan laws and regulations do you think have helped them be more effective at helping employees obtain retirement security?” Nearly half (48.6%) said whether 401(k) plans are sufficient for employees to obtain retirement security depends on how employees use them. Thirty-five percent said 401(k)s are not sufficient for employees to obtain retirement security, and 16.2% said they are. The top-ranked changes to 401(k) plan laws and regulations respondents reported have helped 401(k)s be more effective at helping employees obtain retirement security are increasing contribution limits and establishment of indexed increases each year (78.4%), followed by addition of catch-up contributions for participants age 50 and older (73%) and sanctioning of automatic enrollment subject to certain requirements (67.6%). In verbatim comments, several responding readers said defined benefit plans are still needed (though one reader strongly disagreed), with one touting the cash balance plan design. Others expanded on why “it depends” in their responses to whether 401(k)s are sufficient, suggesting plan sponsors need to also contribute, employees need to start saving early and education about investing is insufficient or confusing for plan participants. Editor’s Choice goes to the reader who said: “The most efficient way to provide retirement income is still the defined benefit plan. We should stop the regulatory persecution of DB plans.” A big thank you to everyone who participated in the survey! Read more >
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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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