PLANADVISER Weekend Newsdash
Week ending July 13th, 2018

Happy Friday, readers! In focus for this edition of PLANADVISERweekend is the always timely topic of Investing, and more specifically, how to weigh risk and reward on retirement plan fund menus. We hear from several providers how growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth. We also examine research from Cerulli, pointing to a number of drivers behind the acceleration in asset management fee compression; the research and analytics firm also analyzes the competitive landscape of “robo-advice.” As always, we encourage you to share some of what you learn with a client or colleague.

Investing
Getting Serious About TDF Sequence of Returns Risk
The growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth. Read more >
Asset Management Fee Compression Accelerates
New research from Cerulli points to a number of drivers behind the acceleration in asset management fee compression, tied to improved automation and stronger competition; the research and analytics firm also analyzes the competitive landscape of “robo-advice.” Read more >
401(k) Participant Mutual Fund Expense Ratios Declined Substantially Since 2000
The Investment Company Institute also found 401(k) plan participants investing in mutual funds tend to hold lower-cost funds. Read more >
Segal Warns Against Change to Actuarial Assumptions for Multiemployer Plans
To determine the impact of such a change, the firm performed a detailed analysis of two national multiemployer plans. Read more >
Experts Probe Potential Signs of Variable Annuity Sales Recovery
Variable annuities continue to face challenges in the wake of transaction processing disruptions caused by the now-vacated DOL fiduciary rule; however, experts anticipate sales to recover as business processes normalize and newer product types come to market. Read more >
SEI Warns That Many TDFs Are Too Risky
SEI has been talking to TDF managers about deploying strategies within their investment lineup that mitigate the potential downside. Read more >
MOST POPULAR STORIES
Warn Your Clients: Don’t Abuse Coronavirus Hardship Withdrawals
Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.
Empower Continues 2020 Acquisitions With Fifth Third Deal

The Fifth Third retirement plan business comprises more than 475 workplace savings plans populated by approximately 100,000 participants with $6.21 billion in assets.

A New World and New Opportunities for Alpha
Pandemic-driven volatility has once again highlighted the relative virtues of active and passive management.
Excessive Fee Lawsuit Filed Against Duke Energy

The drumbeat of Employee Retirement Income Security Act (ERISA) excessive fee lawsuits rolls on.

MGM Resorts 401(k) Joins List of Excessive Fee Lawsuit Targets

The lawsuit challenges the use of actively managed funds over passive funds and the use of higher-cost share classes, among other things.

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