Q3 Market Recap: Investor Optimism Amid the Pandemic

The U.S. equity market recovery that began on March 24 continued in earnest in Q3. However, the Index performance masks significant underperformance in the industries that continue to be impacted by the pandemic. Any failure of the presidential election process to determine a clear winner will likely provide fuel for near-term volatility. 

Read the Q3 Market Recap for a brief review of the market performance and chart shows the average annualized return for the S&P 500 Index under the presidential terms dating back to Franklin Roosevelt. Also included is an article describing how Strategic Benefit Services has been Staying Connected to Meet Retirement Goals in spite of the pandemic.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by email or by calling (855) 882-9177.

Q2 Market Recap: Extraordinary Times - Extraordinary Markets

With the majority of Americans sheltering in place at the beginning of the second quarter, what reasonable person would have forecast that the S&P 500 Index would have appreciated 20.54%, for its best quarterly performance since its inception in 1957?

The extraordinary turnaround from the February-March bear market restored most of the negative returns investors suffered in Q1.

Read the Q2 Market Recap for a brief review of the market performance. Also included is a summary of IRS guidance impacting retirement plan relief under the CARES Act.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by email or by calling (855) 882-9177.

Understanding Voluntary Benefits

You know the importance of having health care coverage and a 401(k), but are you taking advantage of all the benefits your organization offers? Voluntary benefits are additional benefit options offered through the company. Unlike traditional benefits like health coverage, employees are responsible for paying most or all of the cost of these voluntary options.

What’s the Advantage? 

You may wonder–if you’re responsible to pay, then why elect any voluntary benefits? There are several advantages.

Lower Price

IRS permits remote notarization of participant elections

The economic and societal lockdowns that have been imposed in an attempt to slow the spread of the coronavirus have presented unique challenges, including some that may not have been contemplated when the lockdowns were instituted. 

Congress was quick to pass the CARES Act, which gave retirement plan participants greater access to their plan balances through expanded loan and hardship distribution provisions. However, a stumbling block quickly became apparent when plan provisions required spousal consent for some distributions or loans. 

Spousal consent waivers for plans subject to qualified joint and survivor annuity provisions of Section 417 of the Internal Revenue Code generally must be witnessed in the physical presence of a plan representative or a notary public. Similarly, the same spousal consent and witnessing requirements apply to designate a non-spouse beneficiary for a 401(k) or ERISA-covered 403(b) plan. Physical presence can be difficult to achieve in light of stay-at-home orders and temporary business closures. 

The DOL expands rules on e-delivery of participant notices

As described in our previous article on participant notices, plan sponsors of qualified retirement plans must routinely provide various notices to participants and beneficiaries regarding plan provisions, investment information, fees and more.  On May 21, the U.S. Department of Labor released new regulations regarding the electronic disclosure of these notices, ushering in an era of convenience for a historically arduous requirement.

Electronic delivery rules have existed for years, but abiding by them has been prohibitive, particularly when delivering to employees not using a computer as an integral part of work duties. The new rules do not replace the existing ones, but instead offer a more feasible alternative to them.

CRDs 100% taxable for New York state and local income tax purposes in 2020

The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27. Under the Act, participants affected by the coronavirus may be able to take distributions in 2020 of up to $100,000 from an employer-sponsored retirement plan or an IRA. Although allowing these distributions from a qualified retirement plan is optional, we have seen that a number of employers have chosen to amend their plans to permit such distributions. 

The Act provides that coronavirus-related distributions will not be subject to the mandatory 20% withholding nor the 10% early withdrawal penalty (for those younger than 59½) that would otherwise apply.

Invisible

Investors are understandably concerned about the drop in value of their holdings as the first pandemic in many generations redefined our lives, seemingly overnight. SBS believes that investment processes, grounded in understanding the financial markets and the economy, provide the antidote for impulsive investment decisions.

In The Wealth of Nations, a definitive examination of the practical and moral aspects of a market economy in the pre-industrial age, Scottish economist Adam Smith coined the term invisible hand as a guiding principle. Mr. Smith’s explanation of free-market economics in 18th century Great Britain centered on the belief that market participants always act in their own interest. A marketplace of sellers and buyers making voluntary transactions unleashes powerful economic forces — the invisible hand.