Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
September 8th, 2017
Benefits & Administration
Americans Underestimate Long-Term Financial Needs
Despite being confident about their current financial situation, a large portion of Americans significantly underestimate the projected costs of living in retirement, according to a recent survey by independent adviser Financial Engines. The study found that 58% of respondents at least 65 years of age and 76% of those between the ages of 55 and 64 believe the average married couple retiring at age 65 would need between $50,000 and $200,000 for health care. Financial Engines estimates the actual figure is $266,000. Read more >
Saving for Retirement Not Feasible for Many Women
Saving for retirement is not economically feasible for 44% of middle-income women, MassMutual found in a survey. By comparison, this is the case for only 14% of men with annual household incomes of between $35,000 and $150,000. Thirty-nine percent of these women and 35% of these men say they do not feel very or at all financially secure, and 47% of women say they are not very or at all confident they will be financially secure in retirement. Read more >
Products, Deals and People
Partnership Creates Solutions for Gig Workers
In an effort to combat the insufficient benefits gig workers receive, Willis Towers Watson and Stride Health Inc. have teamed up to provide solutions for contingent workers, including contractors and part-time and seasonal employees. Read more >
MOST READ ARTICLES
1
The Senate Math That Could Block SECURE Act
2
House Committee Advances Bill to Establish Union Pension Lifeline Program
3
Open MEPs Not for Every Plan Sponsor
4
Driving Financial Wellness at Work
5
Pension Participants Claim ERISA Breaches in Dow DuPont Pension Transfer
Investment Products and Services Launches
Goldman Sachs Launches High Yield Corporate Bond ETF; Sage Advisory Introduces Custom Laddered Strategy; and Franklin Templeton Rolls Out Active Municipal Bond ETFs. Read more >
Economic Events

In the week ending September 2, the advance figure for seasonally adjusted initial claims for unemployment insurance was 298,000, an increase of 62,000 from the previous week’s unrevised level of 236,000, the Labor Department reported. This is the highest level for initial claims since April 18, 2015 when it was 298,000. The four-week moving average was 250,250, an increase of 13,500 from the previous week’s unrevised average of 236,750.

 

The average interest rate for a 30-year fixed-rate mortgage is 3.78%, down from 3.82% one week ago, according to Freddie Mac. The average interest rate for a 15-year fixed-rate mortgage is 3.08%, down from 3.12%.

Market Mirror

Thursday, the Dow decreased 22.86 points (0.10%) to 21,784.78, the NASDAQ was up 4.55 points (0.07%) at 6,397.87, and the S&P 500 was virtually unchanged at 2,465.10. The Russell 2000 decreased by 3.52 points (0.25%) to 1,398.67, and the Wilshire 5000 was down 19.45 points (0.08%) at 25,576.25.

 

The price of the 10-year Treasury note was up 3/32, decreasing its yield to 2.095%. The price of the 30-year Treasury bond increased 8/32, bringing its yield down to 2.710%.

Compliance
District Court Approves Class Certification in Deutsche Bank Challenge
A federal district court judge has granted class certification to a sizable group of Deutsche Bank employees who have filed an Employee Retirement Income Security Act (ERISA) challenge, alleging self-dealing in the company’s retirement plan benefit. The underlying allegations are that Deutsche Bank and other defendants violated their fiduciary duties by offering in the company 401(k) plan proprietary, high-cost investments that profited the bank. Read more >
Investing
DB Plan Sponsors Preparing for PRTs
The most common preparatory steps taken include an evaluation of the financial impact of a pension risk transfer (PRT); discussions with stakeholders; data review/cleanup; and, exploration of the PRT solutions. Read more >
For Some DB Plan Types IDL, Not LDI, Is the Answer
For two types of DB plans, investment-driven liabilities (IDL) is almost risk free for plan sponsors, and at the same time, provides more meaningful benefits to participants, John Lowell, an Atlanta-based partner with October Three, contends. Lowell explains there are two types of plans for which IDL is workable; variable annuity plans and market-return cash balance plans. According to Lowell, essentially what happens for either of these plan types, and what makes IDL fundamentally different from LDI, is rather than locking in a low rate of return, and taking a plan that’s underfunded and making sure it stays that way because it can’t catch up, plan sponsors can generate assets to create a higher rate of return and to the extent they do, will generate higher benefits. Read more >
Strategic Beta ETFs Deserve a Second, Careful Look
New research from Morningstar, dubbed “A Global Guide to Strategic-Beta Exchange-Traded Products,” offers a helpful overview—and a word of caution—about the strategic beta exchange-traded fund (ETF) landscape. Ben Johnson, Morningstar’s director of global ETF and passive strategies research, says one clear finding is that in the years to come, an increasingly crowded and competitive landscape will put pressure on fees. Strategic beta ETFs are an important asset class to consider, but the research also warns many of the products “aren’t as distinctive as they may first appear.” Read more >
Small Talk

ON THIS DATE: In 1565, a Spanish expedition established the first permanent European settlement in North America at present-day St. Augustine, Florida. In 1664, the Dutch surrendered New Amsterdam to the British, who then renamed it New York. In 1866, the first recorded birth of sextuplets took place in Chicago. In 1892, an early version of “The Pledge of Allegiance” appeared in “The Youth’s Companion.” In 1945, Bess Myerson of New York was crowned Miss America. She was the first Jewish contestant to win the title. In 1951, a peace treaty with Japan was signed by 48 other nations in San Francisco. In 1960, NASA’s Marshall Space Flight Center in Huntsville, Alabama, was dedicated by U.S. President Dwight D. Eisenhower. In 1971, in Washington, D.C., the John F. Kennedy Center for the Performing Arts was inaugurated. In 1973, Hank Aaron hit his 709th home run. In 1974, U.S. President Gerald Ford granted an unconditional pardon to former U.S. President Richard Nixon. In 2015, British researchers announced that evidence of a larger version of Stonehenge had been located about two miles from the Stonehenge location. There were 90 buried stones that had been found by ground-penetrating radar.

 

 

And now it’s time for FRIDAY FILES!

Did this weatherman really do what it looks like he did on live TV? Read more >
In New York City, a man crossing the street had his leg swallowed by a sinkhole after the road abruptly gave way beneath him. The man sat in the crosswalk in Brooklyn until firefighters arrived to free him. Read more >
In Melbourne, Australia, a cyclist noticed a Google Street View car and decided to take his few seconds of fame. He followed the car doing a dance moved called “dabbing.” Read more >

Somewhere in California, a UPS driver left a package for the renter of a fifth-floor apartment. He propped the tall, rectangular package up under the renter’s doorknob. When the renter tried to get out, he was trapped. He had to call maintenance to get out. On a tweet, the man noted that it was not only an inconvenience, but a hazard in case of an emergency, since he was five floors up.

 

In Corona, California, a woman was eating an organic salad when she noticed a tiny frog. She screamed, jumped up, and went to the bathroom to upchuck. Meanwhile, her husband discovered the frog was still alive. After rinsing the dressing off the frog, the husband rubbed its belly and roused it from its stiff state. They felt weird about dumping the frog somewhere, so they put it in an old aquarium in their home and named it “Lucky.”

 

In Bristol, England, a man and woman went on a date and afterwards to the man’s apartment to watch a show. The woman went to use the bathroom and came back with a panicked look. According to the Huffington Post, the woman admitted she had taken a poo and the toilet wouldn’t flush, so she reached into the toilet, grabbed the poo, wrapped it in tissue paper and threw it out the window. But, it gets worse. The man suggested going outside to properly dispose of the poo. However, the man’s bathroom window opens into an 18-inch gap that is separated from the outside world by another non-opening double glazed window. He reached for a hammer to smash the window, but the woman climbed into it head first to retrieve the poo. She did that successfully, but then discovered she was trapped. Firefighters were called, and they freed the woman in 15 minutes. The man told the Daily Star he was still open to seeing her again.

 

In Rotorua, New Zealand, a man reported his car stolen. A man who purchased the car from a website came forward concerned that he had bought a stolen car. Upon further investigation, it was discovered that the man who reported the car stolen had sold it the day before to purchase more al.cohol, but could not remember it.

 

Have a great, and safe, weekend everyone!

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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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