Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
September 29th, 2017
Benefits & Administration
Considerations for Adopting a Safe-Harbor Plan Design
The deadline for adopting a new safe-harbor 401(k) plan is October 1, and while it’s not likely to be met for employers that have not already moved to adopt one, information about the plan design will help employers plan for future years.Read more >
Americans Have Mistaken Ideas About Paying for Long-Term Care
A survey conducted online by Harris Poll on behalf of OneAmerica asked adults how they would pay for assistance with daily living due to illness or injury, either at home or in a care facility, for an extended period of time (longer than 90 days), and more than half (55%) said they would use Medicare or health insurance. OneAmerica notes that in most cases, neither will pay for long-term assistance with daily activities. More education is needed to prepare people for paying medical expenses in retirement.Read more >
DB Plans Far From Being Eliminated
While headlines have stated the disappearance of defined benefit (DB) retirement plans, a report from Aon shows only 6% of U.S. corporate DB plan obligations have actually been settled since 2012. However, Aon’s study, covering 100 U.S. plan sponsors totaling nearly four million participants and $400 billion in assets, found the majority of plan sponsors are continuing to look at settlement strategies to opportunistically shrink the size of their pension plans.Read more >
MOST READ ARTICLES
1
IRS Announces 2020 Contribution and Benefit Limits
2
The Odds Are Split for Senate SECURE Act Passage This Year
3
Pension Risk Transfer Appetite Is Unabated
4
Congressional Leaders Want SECURE Act Passage in 2019
5
Why Americans Need the SECURE Act
Products, Deals and People
Investment Products and Services Launches
Hartford Funds expands fixed income ETF suite; Sage releases ESG Intermediate Credit Index; ICMA-RC opening investments to private sector.Read more >
Edukate Seeks to Merge Financial and Physical Wellness
Financial wellness program provider Edukate is collaborating with health and wellness company DHS Group to improve employee well-being by easing financial stress.Read more >
Sponsored message from Natixis
Helping Make Retirement More Personal
82% of plan participants surveyed, would like their personal values reflected in their investments. Now there’s a solution that meets this demand: Natixis Sustainable Future Funds, the industry’s first ESG-driven target date funds. 1836098.1.1 Read more >
Economic Events

In the week ending September 23, the advance figure for seasonally adjusted initial claims for unemployment insurance was 272,000, an increase of 12,000 from the previous week’s revised level of 260,000, the Labor Department reported. The four-week moving average was 277,750, an increase of 9,000 from the previous week’s unrevised average of 268,750. This is the highest level for this average since February 6, 2016 when it was 277,750.

The average interest rate for a 30-year fixed rate mortgage is 3.83%, unchanged from one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is also unchanged at 3.13%.

Market Mirror

Thursday, the Dow closed 40.49 points (0.18%) higher at 22,381.20, the NASDAQ was virtually unchanged at 6,453.45, and the S&P 500 increased 3.02 points (0.12%) to 2,510.06. The Russell 2000 gained 3.97 points (0.27%) to finish at 1,488.78, and the Wilshire 5000 was up 29.13 points (0.11%) at 26,143.87.

The price of the 10-year Treasury note was unchanged, with its yield at 2.311%. The price of the 30-year Treasury bond was down 3/32, increasing its yield to 2.869%.

Compliance
General Electric Charged With Self-Dealing in 401(k)
401(k) participants claim GE retained underperforming proprietary funds in the plan so that its asset management arm could earn significant profits.Read more >
Investing
Boutique Consultants Want to Serve More Mid-Sized Plans
The latest research from Cerulli Associates, “U.S. Defined Contribution Distribution 2017,” outlines the various challenges and opportunities faced by defined contribution investment only (DCIO) service providers, as well as those faced by “boutique retirement plan consultancies.” Speaking broadly, both groups are seeing strong and increasing demand for passive investment strategies from plan sponsors. Unfortunately, a lot of the passive momentum seems to be supported by the misunderstanding held by many plan sponsors that offering participants passive investment options absolves them of fiduciary responsibility.Read more >
Sponsors Search for New Strategies to Shrink Plan Costs
Cerulli’s latest report, “U.S. Defined Contribution Distribution 2017: Re-Evaluating the Use of CITs in DC Plans,” suggests that even “perennial cynics” are beginning to see the distribution opportunity collective investment trusts (CITs) present in the U.S. defined contribution (DC) plan market. According to Jessica Sclafani, associate director at Cerulli, asset managers that currently do not offer collective trusts or offer a limited number of investment strategies in a collective trust vehicle are “sharpening their pencils and evaluating where a collective trust vehicle may create an opportunity to offer more competitive pricing.”Read more >
Small Talk

ON THIS DATE: In 1789, a regular army was established by the U.S. War Department with several hundred men. In 1943, U.S. Gen. Dwight D. Eisenhower and Italian Marchal Pietro Badoglio signed an armistice aboard the British ship Nelson. In 1960, “My Three Sons” debuted on ABC-TV. In 1962, U.S. President John F. Kennedy nationalized the Mississippi National guard in response to city officials defying federal court orders. The orders had been to enroll James Meredith at the University of Mississippi. In 1963, “My Favorite Martian” premiered on CBS-TV. In 1983, “A Chorus Line” with performance number 3,389 became the longest running show on Broadway. In 1988, the space shuttle Discovery took off from Cape Canaveral in Florida. It was the first manned space flight since the Challenger disaster. In 1994, the House voted to end the practice of lobbyist buying meals and entertainment for members of Congress. In 2008, the Dow Industrial Average lost 777 points. It was the largest one-day decline to date. The drop came after the U.S. House of Representatives had voted down a $700 billion bank bailout plan.

 

And now it’s time for FRIDAY FILES!

The picture on this man’s shirt in his mugshot suggests he was experiencing déjà vu. [pic]Read more >
In Perth, Australia, a 23-year-old man was arrested by transit guards after he was filmed clinging to the back windscreen of a train which was moving 110kmph.Read more >
In Colorado Springs, Colorado, a raccoon participated in a police ride-along.Read more >

In Ketchikan, Alaska, new yellow-painted highway lines are crooked and the paint that’s been used by state transportation officials has stained cars, officials said. Among those affected was Ketchikan Gateway Borough Mayor David Landis, whose car ended up with yellow paint on it. “You come to expect having highway striping like that to be straight and have orderly looking lines and be professionally applied,” Landis said, according to The Ketchikan Daily News. “Something was clearly wrong with the equipment or the operation of that equipment to have so many things wrong all at once.” A Department of Transportation spokeswoman said the paint is “not drying as quickly as it should due to humidity in southeast Alaska.”

 

In Beddington, Maine, a forest fire was averted by a woman with a frying pan. Forest rangers say the woman used a frying pan to carry water back and forth between the flames and a nearby pond in a wooded area, WGME-TV reports.

 

In Preston, England, a man was referred to doctors for a nagging cough that had lasted more than a year. The doctors did a scan of his lungs and found an object they assumed was a tumor. However, during a bronchoscopy, they discovered the tumor was actually a tiny toy Playmobil traffic cone the patient had received as part of a gift when he was seven. According to The Guardian, the doctors said while kids commonly inhale small objects by accident, this case was unusual because the onset of symptoms occurred nearly 40 years later. To their knowledge, they said it was the first reported case of a tracheobronchial foreign body that was overlooked for 40 years. They hypothesize the patient’s airway somehow adapted to the presence of the plastic toy or was absorbed into the lining of the lung.

 

In Sterling, Connecticut, police saw a man strike a curb with his vehicle and break other laws. They pulled him over and he failed a sobriety test, and police found drugs in the car. Of course he was arrested, but the shirt he was wearing at the time of his mugshot was unfortunate. The Smoking Gun shows it was a green T-shirt that said, “Beer + Beer = Shenanigans.”

 

In Tampico, Mexico, it rained fish this week. Tamaulipas civil defense says in a brief statement that rain Tuesday in the coastal city of Tampico included fish. Photos posted on the agency’s Facebook page show four small fish in a bag and another on a sidewalk. According to the Associated Press, the U.S. Library of Congress says it’s a phenomenon that has been reported since ancient times. Scientists believe that tornadoes over water—known as waterspouts—could be responsible for sucking fish into the air where they are blown around until being released to the ground.

 

Have a great weekend!

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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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