Compliance March 4, 2020

DOL, PBGC Announce Searchable Guidance Databases

Each database contains, or links to, all the agency’s guidance documents and provides certain information about them.

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Both the Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor (DOL) have issued notices about the availability of guidance document databases.

On October 9, President Donald Trump issued Executive Order 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents.” Central principles of the executive order are that the American public should only be subject to binding rules imposed through duly enacted statutes or through regulations that are lawfully promulgated and that Americans should have fair notice of any such obligations. Section 3 of the executive order requires each agency to establish on its website a single, searchable indexed database that contains, or links to, all the agency’s guidance documents and provides certain information about them.

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The PBGC’s guidance document database is at www.pbgc.gov/guidance. The guidance document database contains links to PBGC guidance documents.

The DOL’s notice says it is undertaking a detailed and comprehensive review of guidance documents issued by its agencies to determine whether such guidance aligns with the law and administration policy and otherwise serves an appropriate and useful purpose. Guidance which is outdated, superseded, invalid, unhelpful, confusing, redundant, outside an agency’s appropriate role, or contrary to law or policy is being rescinded or modified.

Any documents still under review will be added to the website when those decisions have been finalized. Guidance documents that are not currently searchable through the search tool will continue to be available on the individual DOL agency websites. The DOL says it will continue to refine its website as needed to enhance user accessibility and usability.

The DOL’s guidance document database is at https://www.dol.gov/guidance.
Participants March 4, 2020

Coronavirus Fears Lead to Spike in 401(k) Trades

The last week of the month was among the busiest stretches in the 20 year-plus history of the Alight Solutions 401(k) Index.

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With the markets plummeting at the end of February over fears of the repercussions of a worldwide coronavirus outbreak, 401(k) investors’ trades spiked in the final week of the month—marking it as one of the busiest five-day stretches in the 20 year-plus history of the Alight Solutions 401(k) Index.

During the month, 0.046% of 401(k) balances were traded daily, the highest level since August 2011. In particular, the net trading activity on February 28 was 15.8 times the average daily level, which surpassed the previous high of 11.8 times the average, set in February 2018.

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The last week of February had more net trading activity than all of the activity in the fourth quarter of 2019. Sixteen of the 19 trading days in the month favored fixed income funds. Asset classes with the most trading inflows in February were bond funds, taking in 47% of the flows, valued at $687 million, followed by stable value funds (41%, $597 million) and money market funds (11%, $160 million).

Asset classes with the most trading outflows in February were large U.S. equity funds (43%, $634 million), target-date funds (TDFs) (27%, $397 million) and mid U.S. equity funds (10%, $144 million). Asset classes with the largest percentage of the total balances at the end of February were TDFs (30%, $62.1 billion), large U.S. equity funds (25%, $52.5 billion) and stable value funds (10%, $21.4 billion).

Asset classes with the most contributions in February were TDFs (45%, $801 million), large U.S. equity funds (20%, $354 million) and company stock funds (7%, $117 million).

In its market observations, Aon said that during the month, international equities dropped 7.9%, large U.S. equities were down 8.2% and small U.S. equities lost 8.4% of their value. U.S. bonds rose by 1.8%.

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