Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
October 26th, 2016
Benefits & Administration
Addressing the Most Serious DC Plan Leakage Problem
Addressing the issue of defined contribution (DC) retirement plan leakage has been a task on which players in the retirement industry have been working for years. There are already strict requirements for when a DC plan participant can take a hardship withdrawal, and recommendations have been made to reduce leakage from participant loans. However, hardship withdrawals and participant loans are not the biggest leakage problem DC plans have.Read more >
Products, Deals and People
Global Shares, a provider of stock plan administration recordkeeping services, software-as-a-service (SaaS) and financial reporting tools, has teamed up with Fidelity Investments multinational financial services corporation. Clients of Global Shares’ new equity compensation management platform will now be able to work with Fidelity to provide participant servicing and brokerage solutions.Read more >
MOST READ ARTICLES
1
2021 Recordkeeping Survey
2
2021 Plan Sponsor of the Year
3
Most DB Plan Sponsors Seeking an Exit
4
TRIVIAL PURSUITS: From where did the phrase ‘Beam me up, Scotty’ originate?
5
Mismanagement of ERISA Accounts
Ask the Experts
Stable Value Funds Versus Separate Accounts
“In reviewing our Employee Retirement Income Security Act (ERISA) 403(b) retirement plan, the written materials indicated that our stable value fund is a separate account, but the investment provider, an insurance company, has informed me that it is not, in fact an account that contains only the assets of our plan, which is what my understanding of what a separate account should be (at least based on my experience with a prior employer). So why is ‘separate’ not truly separate in this case?”Read more >
Economic Events
The Conference Board Consumer Confidence Index, which had increased in September, declined in October. The Index now stands at 98.6 (1985=100), down from 103.5 in September. The Present Situation Index decreased from 127.9 to 120.6, while the Expectations Index declined from 87.2 last month to 83.9.
Sponsored message from BlackRock
Long-term thinking in a low return world
Longer lives and lower returns could threaten retirement savings. Anne Ackerley, head of BlackRock’s U.S. & Canada Defined Contribution Group, on how to prepare DC participants.Read more >
Market Mirror

Tuesday, the Dow decreased 53.76 points (0.30%) to 18,169.27, the NASDAQ lost 26.43 points (0.50%) to finish at 5,283.40, and the S&P 500 closed 8/17 points (0.38%) lower at 2,143.16. The Russell 2000 fell 10.34 points (0.84%) to 1,216.10, and the Wilshire 5000 was down 109.72 points (0.49%) at 22,281.29.

On the NYSE, 3.1 billion shares changed hands, with 3 declining issues for every 2 advancing issues. On the NASDAQ, 2.9 billion shares traded, with a more than 2 to 1 lead for decliners.

The price of the 10-year Treasury note was up 2/32, decreasing its yield to 1.761%. The price of the 30-year Treasury bond increased 10/32, bringing its yield down to 2.504%.
Compliance
AARP Sues for Injunction of EEOC Wellness Program Rules
The AARP has filed a lawsuit alleging that the Equal Employment Opportunity Commission’s (EEOC)’s final wellness program rules under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) are arbitrary, capricious, an abuse of discretion, and not in accordance with law. The AARP is asking that the rules be invalidated.Read more >
Third Stock Drop Compliant Filed Against Wells Fargo
Another participant is suing Wells Fargo and its executives after losing money on company stock following revelations involving unethical sales practices within the organization’s consumer/retail banking divisions. Like the previous complaints, this one seeks class action status under the Employee Retirement Income Security Act (ERISA) and alleges that the executives within Wells Fargo who oversee the company’s retirement plan—and its offering of Wells Fargo stock to employees as an investment option—knew about the sales process failures well in advance of the public disclosures. Thus, according to the reasoning in the complaint, they should have dropped the company stock as an imprudent investment option—knowing the illegal sales processes would eventually and necessarily be disclosed and thereby correct the inflated stock price.Read more >
From the Magazine
Income-Generating Strategies
The next step in the transition from defined benefit (DB) to defined contribution (DC) retirement plans is for the latter to offer retirement income programs that retirees can use to convert their account balances to periodic retirement income, says the Stanford Center on Longevity and the Society of Actuaries Committee on Post-Retirement Needs and Risks in a new research paper. The report offers strategies to help plan sponsors, advisers and retirees achieve this and other specific retirement planning goals.Read more >
Small Talk
Slightly fewer workers this year say they have called in sick although they were feeling fine over the last 12 months, according to a CareerBuilder survey. Employees were asked to share the most dubious excuses employees have given for calling in sick. The ozone flattening an employee’s tires and an employee being hit by a duck were among them. The survey also revealed that some employees ratted themselves out on social media.Read more >

ON THIS DATE: In 1825, the Erie Canal opened in upstate New York. The 363-mile canal connects Lake Erie and the Hudson River. In 1858, H.E. Smith patented the rotary-motion washing machine. In 1881, the “Gunfight at the OK Corral” took place in Tombstone, Arizona. The fight was between Wyatt Earp, his two brothers and Doc Holiday and the Ike Clanton Gang. In 1942, the U.S. ship Hornet was sunk in the Battle of Santa Cruz during World War II. In 1944, during World War II, the Battle of Leyte Gulf ended. The battle was won by American forces and brought the end of the Pacific phase of World War II into sight. In 1949, U.S. President Harry Truman raised the minimum wage from 40 cents to 75 cents an hour. In 1962, the Soviet Union made an offer to end the Cuban Missile Crisis by taking their missile bases out of Cuba if the U.S. agreed to not invade Cuba and would remove Jupiter missiles in Turkey. In 1970, “Doonesbury,” the comic strip by Gary Trudeau, premiered in 28 newspapers across the U.S. In 1984, “Baby Fae” was given the heart of baboon after being born with a severe heart defect. She lived for 21 days with the animal heart. In 1990, Wayne Gretzky became the first NHL player to reach 2,000 points.

 

WEDNESDAY WISDOM: “Tough times never last, but tough people do.”—Robert H. Schuller, pastor and author
Share the good news with a friend! Pass the NewsDash 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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