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May 15, 2017
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Fidelity Finds Positive DC Savings Trends
Medical Cost Trends Outpace Inflation, Wages
More Participants Contributing to Both 401(k) and HSA
Retirement Industry People Moves
TIAA Settlement Agreement Goes Beyond Monetary Compensation
Emory University Excessive 403(b) Plan Fee Suit Moves Forward
Benefits & Administration
Fidelity Finds Positive DC Savings Trends:
A benefits analysis survey by Fidelity Investments finds that its clients’ participants are saving more than ever before. The total average savings rate for 401(k) investors, combined with employer matches and profit sharing, reached a record high of 12.9% in the first quarter of 2017. The previous high was seen back in Q1 2006, when the total average savings rate was 12.8%. The average employee deferral rate was 8.4% with an average employer match of 4.5%. Savings rates were highest among older age groups. Read more »
Medical Cost Trends Outpace Inflation, Wages:
While medical cost increases have slowed in recent years, insurers in the U.S. still report trends between 7% and 9% per year, from 2015 to 2017, according to Willis Towers Watson’s 2017 Global Medical Trends Survey Report. As in recent years, employers continue to make changes to their plan designs to keep employee cost increases to a minimum. Read more »
MOST READ ARTICLES
1
A Plethora of Data to Help DC Plan Sponsors Benchmark Plans
2
Washington University in St Louis Faces 403b Plan Lawsuit
3
PSNC 2017 A Shift in Educating Participants What Is Financial Wellness
4
Retirement Industry People Moves June 12 to June 16
More Participants Contributing to Both 401(k) and HSA:
Despite the worry that participants in high deductible health plans (HDHP) with health savings accounts (HSAs) cannot afford to contribute to both the HSA and their 401(k) plans, research by Fidelity Investments finds the opposite. Its clients’ participants who contribute to both vehicles on average defer higher rates (10.6% in 2016) to their 401(k)s, than those saving in only their 401(k)s (8.2% in 2016). Moreover, the firm finds that the overall number of employees contributing to both a 401(k) and an HSA increased by 21%. Read more »
Products, Deals and People
Retirement Industry People Moves:
Hueler & NISA collaborate with focus on retirement income; United Financial NW joins PlanMember Securities Corporation; Industry vet returns to SSGA to lead DC business; and more. Read more »
Economic Events

The combined value of distributive trade sales and manufacturers’ shipments for March, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,361.0 billion, virtually unchanged from February, but was up 6.5% from March 2016, the Census Bureau reported.

Advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $474.9 billion, an increase of 0.4% from the previous month, and 4.5% above April 2016. Total sales for the February through April period were up 4.7% from the same period a year ago. The February to March percent change was revised from down 0.2% to up 0.1%.              

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI_U) increased 0.2% in April after falling 0.3% in March, according to the Bureau of Labor Statistics. The index for all items less food and energy rose 0.1% in April after declining 0.1% in March.

Real average hourly earnings increased 0.1% in April, seasonally adjusted. Average hourly earnings increased 0.3%, and CPI-U increased 0.2%. Real average weekly earnings increased 0.4% over the month. 

THE ECONOMIC WEEK AHEAD: Tomorrow, the Census Bureau will report about housing starts in April. Thursday, the Labor Department will issue its initial claims report.

Market Mirror

Friday, the Dow decreased 22.81 points (0.11%) to 20,896.61, the NASDAQ was up 5.27 points (0.09%) at 6,121.23, and the S&P 500 was down 3.54 points (0.15%) at 2,390.90. The Russell 2000 lost 7.42 points (0.53%) to finish at 1,382.77, and the Wilshire 5000 closed 49.83 points (0.20%) lower at 24,855.89.

The price of the 10-year Treasury note increased 18/32, bringing its yield down to 2.327%. The price of the 30-year Treasury bond climbed 1 0/32, decreasing its yield to 2.989%.

WEEK’S WORTH: For the week ending May 12, the Dow finished 0.53% lower, the NASDAQ was up 0.34%, and the S&P 500 was down 0.35%. The Russell 2000 lost 1.02%, and the Wilshire 5000 decreased 0.48%.
Compliance
TIAA Settlement Agreement Goes Beyond Monetary Compensation:
TIAA has reached a settlement agreement in a proposed class action lawsuit brought by its own employees, accusing the company of self-dealing within its own retirement plan, in the U.S. District Court for the Southern District of New York.  A significant number of non-monetary settlement terms have been agreed to, including that TIAA will add more non-proprietary investment options to its own retirement plan and reconsider how its treats revenue sharing payments. Read more »
Emory University Excessive 403(b) Plan Fee Suit Moves Forward:
A federal judge has denied in part and granted in part Emory University’s 403(b) excessive fee suit. Among the claims for which U.S. District Judge Charles A. Pannell, Jr. of the U.S. District Court for the Northern District of Georgia granted dismissal, was the claim that the plan included too many funds in the investment lineup. He agreed with the plaintiffs on most other claims. Read more »
Small Talk
ON THIS DATE: In 1862, Congress created the U.S. Department of Agriculture. In 1911, the U.S. Supreme Court ordered the dissolution of Standard Oil Company, ruling it was in violation of the Sherman Antitrust Act. In 1918, regular airmail service between New York City, Philadelphia and Washington, D.C., began under the direction of the Post Office Department, which later became the U.S. Postal Service. In 1930, Ellen Church became the first female flight attendant. In 1970, U.S. President Richard Nixon appointed America's first two female generals. In 1972, Alabama Governor George C. Wallace was shot by Arthur Bremer in Laurel, Maryland, while campaigning for the U.S. presidency. Wallace was paralyzed by the shot. In 1980, the first transcontinental balloon crossing of the United States took place. In 2014, the National September 11 Memorial Museum was dedicated in New York City.
SURVEY SAYS RESPONSES: Last week, I asked NewsDash readers, “What, if any, plans do you have for Mother’s Day?” Forty percent of responding readers said they will visit their mothers and/or grandmothers. More than 17% each chose “taking mother and/or grandmother out for a meal” and “children visiting you and/or taking you out.” Ten percent indicated they will just call their mother and/or grandmother, 7.5% plan to go to church with mother and/or grandmother, 5% are visiting children, and 2.5% are having mother and/or grandmother over for a visit and/or meal. In verbatim comments, a couple of readers noted that going to a restaurant on Mother’s Day can mean crowds and rushed service. A couple also reminded us that there are some fathers who have served in the mother’s role as well for some people. Editor’s Choice goes to the reader who said: “As a mother of boys, I have to make the plans and tell them what I want, or I am lucky to get a card.” I can relate. Thanks to everyone who participated in the survey! Read more »
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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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Paul Zampitella | paul.zampitella@strategic-i.com

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