PLANSPONSOR - June/July 2020 - 9
his goals or whether he is on track to
reach his goals.
Another weakness the pandemic
has revealed is plan sponsors' continuing
preoccupation with investment performance
vs. monthly income replacement,
Bremen says.
Swann agrees. The " focus on
TDF performance exclusively is fairly
misguided, " he says. " It gets distorted
during long bull market runs. " Instead,
plans need to address downside risk
management. " People retire every day, and,
when a month before they retire, they lose
20% of their balance, it drastically changes
their retirement outlook. The lack of focus
on downside risk creates a meaningful and
significant impact on participants. "
He suggests that plan sponsors
compare TDF providers by studying their
first-quarter numbers for results and
dispersion of returns. " They have to understand
the concentration of risk in the portfolio
rather than focus on returns and pure
rankings, " he says.
According to Swann, the Setting
Every Community Up for Retirement
Enhancement (SECURE) Act will help, as
it allows plan sponsors to adopt guaranteed
income products. However, the pricing
hurdle needs to be cleared, he notes.
" Current costs, with commissions in the
multiple hundreds of basis points [bps],
create a challenge for getting these products
into DC plans. " Although some cost
is worth the downside protection, the rest
still has to be compressed, he observes.
Providers should be able to manage
costs, he says. " The evolution of DC plan
design will be driven by market demand.
Providers tend to innovate according to
what clients want, but they'll have to do
that in a way that's price competitive. "
Incorporating income solutions is
already underway; it will take time for
plan sponsors to learn about, and evaluate,
the range of solutions available,
Bremen says. -Rebecca Moore
TIDBITS
Saving FSAs
Employees with a flexible spending account
(FSA) may want to consider enrolling in a
COBRA [Consolidated Omnibus Budget
Reconciliation Act] account when they leave
a job. Without continuation of their employer
health coverage, they'll forfeit any unspent
dollars in their FSA.
A Gift to Social Security
Congress did Social Security a favor by
not including a payroll tax holiday in the
Coronavirus Aid, Relief and Economic Security
(CARES) Act. Legislators had done so in their
stimulus response to the Great Recession of
2008, damaging the program.
It's All Relative
Workers across salaries average similar
savings rates in a 401(k).
For those earning
$30k - $40k ...
... 6.1%
of salary
saved
For those earning
$200k - $210k ...
... 7.7%
of salary
saved
Source: Human Interest, Inc.
PLANSPONSOR.COM June - July 2020 9
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PLANSPONSOR - June/July 2020
Table of Contents for the Digital Edition of PLANSPONSOR - June/July 2020
Revisiting Wellness
2020 Recordkeeping Survey
Blight Resistant
Debt Busters
A Time for Caution
PLANSPONSOR - June/July 2020 - Cover1
PLANSPONSOR - June/July 2020 - Cover2
PLANSPONSOR - June/July 2020 - 1
PLANSPONSOR - June/July 2020 - 2
PLANSPONSOR - June/July 2020 - 3
PLANSPONSOR - June/July 2020 - 4
PLANSPONSOR - June/July 2020 - 5
PLANSPONSOR - June/July 2020 - 6
PLANSPONSOR - June/July 2020 - 7
PLANSPONSOR - June/July 2020 - 8
PLANSPONSOR - June/July 2020 - 9
PLANSPONSOR - June/July 2020 - 10
PLANSPONSOR - June/July 2020 - 11
PLANSPONSOR - June/July 2020 - 12
PLANSPONSOR - June/July 2020 - 13
PLANSPONSOR - June/July 2020 - Revisiting Wellness
PLANSPONSOR - June/July 2020 - 15
PLANSPONSOR - June/July 2020 - 16
PLANSPONSOR - June/July 2020 - 17
PLANSPONSOR - June/July 2020 - 2020 Recordkeeping Survey
PLANSPONSOR - June/July 2020 - 19
PLANSPONSOR - June/July 2020 - 20
PLANSPONSOR - June/July 2020 - 21
PLANSPONSOR - June/July 2020 - 22
PLANSPONSOR - June/July 2020 - 23
PLANSPONSOR - June/July 2020 - 24
PLANSPONSOR - June/July 2020 - 25
PLANSPONSOR - June/July 2020 - 26
PLANSPONSOR - June/July 2020 - 27
PLANSPONSOR - June/July 2020 - 28
PLANSPONSOR - June/July 2020 - 29
PLANSPONSOR - June/July 2020 - 30
PLANSPONSOR - June/July 2020 - 31
PLANSPONSOR - June/July 2020 - 32
PLANSPONSOR - June/July 2020 - 33
PLANSPONSOR - June/July 2020 - 34
PLANSPONSOR - June/July 2020 - 35
PLANSPONSOR - June/July 2020 - Blight Resistant
PLANSPONSOR - June/July 2020 - 37
PLANSPONSOR - June/July 2020 - Debt Busters
PLANSPONSOR - June/July 2020 - 39
PLANSPONSOR - June/July 2020 - A Time for Caution
PLANSPONSOR - June/July 2020 - 41
PLANSPONSOR - June/July 2020 - 42
PLANSPONSOR - June/July 2020 - 43
PLANSPONSOR - June/July 2020 - 44
PLANSPONSOR - June/July 2020 - 45
PLANSPONSOR - June/July 2020 - 46
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PLANSPONSOR - June/July 2020 - 48
PLANSPONSOR - June/July 2020 - Cover3
PLANSPONSOR - June/July 2020 - Cover4
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