PLANSPONSOR Weekend Newsdash
Week ending June 2nd, 2017
Happy Friday, PLANSPONSOR readers! An analysis this week contends that continuing public pension reforms could ultimately hurt the economy, while another found investors who leave investments alone—such as those in target-date funds (TDFs) offered by defined contribution (DC) retirement plans—get better investment returns than do-it-yourself investors who try to time the market. While there is much media coverage about Millennials and Baby Boomers, sometimes Generation X gets left out, but an article this week discusses how to help Gen X with their unique financial wellness needs. Also, providers weigh in about how technology is changing participant communications and why DC plan sponsors should not fear adoption of collective investment trusts (CITs). All this and more in this edition of PLANSPONSOR Weekend!
Editor's choice
Continuing Public Pension Reforms Could Hurt the Economy
In the wake of the financial crisis of 2008, public pension plans made several reforms, including benefit cuts, and increases in the age and tenure required to claim benefits. And, some state and local governments have contemplated moving to a defined contribution (DC) plan structure. A report from the National Conference on Public Employee Retirement Systems (NCPERS) suggests that if these reforms continue, it will result in economic losses. Read more >
Automatic Savings Plans Drive Better Investment Returns
In the U.S., TDFs have consistently had positive gaps from state returns because U.S. investors contribute to their 401(k) savings with every paycheck, and TDFs reduce bad market timing decisions. Read more >
Helping Gen X With Financial Wellness
While Millennials and Baby Boomers get much attention, it could be argued that Generation X is the most in need of financial wellness help. For Gen Xers, according to Larisa Terkeltaub, senior director of LearnVest at Work, aside from credit card and student loan debt and saving for emergencies and retirement, there’s an additional layer when it comes to prioritizing competing goals.  Read more >
Technology Reshaping Participant Communications
A new study finds plan providers are turning to cloud-based technology and other solutions to enhance targeted communications toward different age groups. Read more >
Plan Sponsors Should Not Have Concerns About Adopting CITs
The lower cost of collective investment trusts (CITs) is attracting the attention of plan sponsors, retirement executives say. Compared to mutual funds, CITs are priced 10 to 30 basis points lower, according to a DST white paper, “Collective Investment Trusts—A Perfect Storm.” While some plan sponsors may worry that CITs have a tracking error against their benchmarks, it is typically quite small and can sometimes be smaller than the tracking error found in a mutual fund, because CITs are designed exclusively for retirement plans, says Jeffrey McConnell, chief investment officer at Graystone Consulting in Purchase, New York. Read more >
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AT&T Sued Over Calculation of Early Retirement Benefits

The plaintiffs say the plan’s terms reduce benefits using “Early Retirement Factors” and “Joint and Survivor Annuity Factors” which result in plan participants receiving less than the actuarial equivalent of their vested accrued benefit, as required by ERISA.

Congressional Leaders Want SECURE Act Passage in 2019

Based on the conversations industry advocates are having in Washington, none of the leadership in the Senate or the House opposes passage of the SECURE Act.

New Lawsuit Highlights Importance of Cybersecurity for Retirement Plans

A former 401(k) plan participant is suing the plan sponsor and plan providers after unauthorized distributions were made from her account.

IRS Releases 2019-2020 Priority Guidance Plan

The IRS invites public comments and suggestions about guidance.

DC Plans 3.0 Will Really be Tailored to Individual Situations

Bob Collie, head of research at the Thinking Ahead Institute, tells PLANSPONSOR version 3.0 will be customized by “hyper-customization and integrated whole-of-life wealth management” that takes into account all of a person’s savings.

Editorial: Alison Cooke Mintzer


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