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March 8, 2017
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Many Americans Think They Are Failing at Retirement Savings
Vanguard Suggests Best Plan Designs for Retiring and Retired Participants
State Run IRA Plans Targeted By Senate Resolutions
Connecticut Bill Targets 403(b) Provider Conflicts
Growing Plan Sponsor Interest in Pension Risk Transfer
Benefits & Administration
Many Americans Think They Are Failing at Retirement Savings :

More than half, 52%, of American workers do not think they are saving enough for retirement, according to a survey of 700 employed investors by Investopedia. That number jumps to 58% among novice investors. On the other hand, expert investors are seven times more likely to be ahead of their goals, Investopedia found. More than three-quarters (78%) of those who feel they are behind on their retirement savings contribute to a workplace retirement plan.

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Vanguard Suggests Best Plan Designs for Retiring and Retired Participants :
Vanguard has five recommendations based on allowing retirees to keep their money in the plan and create income streams. “Creating a DC plan that serves as a destination for employees beyond their retirement milestone is not a simple decision, but it’s certainly an important one,” says Martha King, managing director of Vanguard Institutional Investor Group. Read more »
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Sponsored message from Vanguard

A different kind of target-date investor 

Cynthia Pagliaro and Stephen Utkus 

Roughly 1/3rd of plan participants in target-date funds at Vanguard are "mixed" target date investors. There are concerns that mixed investors are misusing all-in -one funds and take on added risk through overlapping securities.

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Market Mirror

Yesterday, the Dow was down 29.58 points (0.14%) at 20,924.76, the NASDAQ lost 15.25 points (0.26%) to finish at 5,833.93, and the S&P 500 dropped 6.92 points (0.29%) to 2,368.39. The Russell 2000 lost 9.55 points (0.69%) to 1,374.69, and the Wilshire 5000 closed 89.58 points (0.36%) lower at 24,638.00.

On the NYSE, 3.5 billion shares traded, with 2.3 declining issues for every 1 advancing issue. On the NASDAQ, 2.8 billion shares changed hands, with a 2 to 1 ratio of decliners to advancers.

The price of the 10-year Treasury note decreased 4/32, bringing its yield up to 2.514%. The price of the 30-year Treasury bond fell 8/32, increasing its yield to 3.118%.

Compliance
State Run IRA Plans Targeted By Senate Resolutions:

Senator Orrin Hatch, R-Utah, known for his work on pension and retirement issues, introduced a joint resolution in the Senate aimed at dialing back Department of Labor (DOL) rules adopted under former President Barack Obama, which encourage states to set up defined contribution (DC) payroll deduction retirement plans for private sector workers. The language is similar to that which was introduced in the House in February. 

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Connecticut Bill Targets 403(b) Provider Conflicts:
A bill introduced in the Connecticut State Legislature is aimed at implementing a state-based rule making process that will require any person who enters into a service contract or agreement with a 403(b) retirement plan and “reasonably expects to receive $1,000 or more in compensation, direct or indirect, in connection with the provision of such services,” to disclose to a fiduciary of the plan “any conflict of interest such person has with such retirement plan.” Read more »
Investing
Growing Plan Sponsor Interest in Pension Risk Transfer:

Eight out of 10 employers are interested in pension risk transfer (PRT), and defined benefit (DB) plan sponsors have become increasingly interested in these products since 2014, according to a new study by the LIMRA Secure Retirement Institute. The same report found that four in 10 DB plan sponsors reported being “very interested” in PRT products, representing a 10% spike in interest compared to data gathered from an Institute study in 2014. 

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In a recent paper, GMO concludes that dynamic investment allocations paired with higher-than-typical deferral rates can result in significantly better outcomes for participants—and that these are the two most important factors when selecting a TDF. GMO examined several variables considered when selecting a target-date fund—including active versus passive, level of risk, dynamic versus predetermined glidepaths and custom versus off-the shelf—and how these factors would have resulted in outcomes for the 40-year period between 1975 and 2015. Read more »
Small Talk

ON THIS DATE: In 1853, the first bronze statue of Andrew Jackson was unveiled in Washington, D.C. In 1880, U.S. President Rutherford B. Hayes declared that the United States would have jurisdiction over any canal built across the isthmus of Panama. In 1894, a dog license law was enacted in the state of New York. It was the first animal control law in the U.S. In 1945, Phyllis Mae Daley received a commission in the U.S. Navy Nurse Corps. She later became the first African-American nurse to serve in World War II. In 1948, the U.S. Supreme Court ruled that religious instruction in public schools was unconstitutional. In 1965, the U.S. landed about 3,500 Marines in South Vietnam. They were the first U.S. combat troops to land in Vietnam. In 1999, the U.S. Supreme Court upheld the conviction of Timothy McVeigh for the bombing of a federal building in Oklahoma City in 1995.

 

WEDNESDAY WISDOM: “Either you run the day or the day runs you.” -Jim Rohn

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EDITORIAL

Alison Cooke Mintzer | Editor-in-Chief | alison.mintzer@strategic-i.com

Rebecca Moore | NewsDash Editor | rebecca.moore@strategic-i.com

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