Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 16th, 2018

2019 Awards Nominations Are Open

The deadline for the 2019 Plan Adviser and Adviser Team of the Year award nominations is October 19. Read more >
Benefits & Administration
Goldman Sachs: Many Pensions Stand in PRT Goldilocks Zone
According to Goldman Sachs Asset Management’s new white paper, “Stars Aligning for Corporate Plans to Take De-Risking Actions,” almost 25% of U.S. corporate defined benefit (DB) plans are now in a fully funded or over-funded position. As the paper’s title indicates, this means many plan sponsors are in a great position to take further de-risking actions. If interest rates continue to rise, this may have a negative impact on equity valuations; consequently, according to Goldman Sachs research, the present period may represent a limited window for optimal pension risk transfer actions. Read more >
Cost-Shifting No Longer the Go-To Strategy for Reducing Health Benefit Costs
After plan design changes and vendor negotiations, 2019 medical and pharmacy plans premiums are expected to increase by 3.5%, the same percentage as 2018, according to an actuarial analysis by Aon plc. For 2018, the increase in employees’ contribution to the cost of their health plans was held to their lowest level over the last five years. Employers are increasingly looking to manage cost increases through means other than shifting cost onto employees. Read more >
Boomers More Confident in Their 401(k) Than Ever
Recognizing the fact that November will mark the 40th anniversary of the legislation that paved the way for 401(k) plans, Charles Schwab conducted a survey of Baby Boomers’ attitudes towards their 401(k) plans and found 75% said they believe their 401(k) plan is in better shape now than ever before. Only 16% expect to work in retirement due to needing the money. However, 20% said they do not understand the process for withdrawing money from their 401(k) in retirement. 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
Third Parties Help Small DB Plans With Administration
Larger defined benefit (DB) plans have access to liability hedging, overlay managers and derivatives to manage interest rate risk, and small plans want these capabilities but cannot afford the expense, says James Tamposi with Cerulli Associates. Read more >
Industry Voices
What If You Could Exit the 401(k) Business?
Liana Magner, with Mercer Investments, discusses a modern, professionally managed and outsourced alternative that, while not completely relieving plan sponsors of their fiduciary responsibilities in the eyes of regulators, removes pressure on company resources. Read more >
Economic Events

The combined value of distributive trade sales and manufacturers’ shipments for August, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,461.9 billion, up 0.5% from July and up 7.8% from August 2017, the Census Bureau reported.

 

Advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $509.0 billion, an increase of 0.1% from the previous month, and 4.7% above September 2017. Total sales for the July through September period were up 5.9% from the same period a year ago. Retail trade sales were up 0.4% from August, and 4.4% above last year. Gasoline Stations were up 11.4% from September 2017, while Nonstore Retailers were also up 11.4% from last year.

Market Mirror

Yesterday, the Dow was down 89.44 points (0.35%) at 25,250.55, the NASDAQ lost 66.15 points (0.88%) to finish at 7,430.74, and the S&P 500 was closed 16.34 points (0.59%) lower at 2,750.79. The Russell 2000 increased 6.44 points (0.42%) to 1,553.12, and the Wilshire 5000 decreased 123.52 points (0.43%) to 28,445.42.

 

The prices of the 10-year Treasury note and 30-year Treasury bond were each up 2/32, decreasing their yields to 3.154% and 3.335%, respectively.

Compliance
PBGC Posts 2019 Premium Rates
A table on the PBGC’s website shows that the flat-rate premium for single-employer plans has grown from $31 in 2007 to $80 in 2019, and the variable-rate premium has grown from $9 to $43. Read more >
Health Care Provider Accused of Excessive Fees in 403(b) and 401(k) Plans
A lawsuit alleges that the defendants failed to take advantage of the plans’ bargaining power by only offering actively managed retail mutual funds as investment options. Read more >
Small Talk

ON THIS DATE: In 1701, The Collegiate School was founded in Killingworth, Connecticut. The school later moved to New Haven and its name was changed to Yale College. In 1793, during the French Revolution, Queen Marie Antoinette was beheaded after being convicted of treason. In 1829, in Boston, the first modern hotel in America opened. The Tremont Hotel had 170 rooms that rented for $2 a day and included four meals. In 1847, “Jane Eyre” by Charlotte Bronte was first published in London. In 1928, Marvin Pipkin received a patent for the frosted electric light bulb. In 1943, Chicago’s new subway system was officially opened. In 1962, President John Kennedy was informed that there were missile bases in Cuba, beginning the Cuban missile crisis. In 1964, China detonated its first atomic bomb becoming the world’s fifth nuclear power. In 1967, NATO headquarters opened in Brussels. In 1995, the “Million Man March” took place in Washington, D.C. In 2000, it was announced that Chevron Corp. would be buying Texaco Inc. for $35 billion. The combined company was called Chevron Texaco Corp. and became the 4th largest oil company in the world. In 2002, the Arthur Andersen accounting firm was sentenced to five-years probation and fined $500,000 for obstructing a federal investigation of the energy company Enron.

TRIVIAL PURSUITS: Which animal has the largest eyes? Hint: It lives in the water. 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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