U.S. Treasuries the Lone Safe Haven in a Rocky First Quarter
U.S. fixed income U.S. Treasury yields fell to record lows in March as investors sought safety and the Fed cut rates to 0%-0.25%. The 10-year U.S. Treasury yield reached a low in March of 0.31% before closing the quarter at 0.70%, down sharply from the year-end level of 1.92%. Other sectors significantly underperformed U.S. Treasuries, […]
Guidance on Substantial Workforce Cuts and DC Plan Terminations
Employers that reduce their workforce or discontinue defined contribution (DC) plan eligibility for certain employee groups may experience an inadvertent “partial plan termination.” If not properly managed, this event could result in a disqualification of the entire plan. Background A partial plan termination is typically triggered by a distinct event or series of events (e.g., […]
How the Coronavirus Relief Bill Affects DC Plans
The coronavirus relief bill, known as the CARES Act, seeks to address the recent economic tremors stemming from the coronavirus pandemic. Certain provisions look to liberalize loan and distribution availability for certain DC plan participants (i.e., “qualified individuals”). Background The CARES Act was signed into law on March 27. Drafting this legislation was expedited, which […]
Rapid Shift to Working from Home Increases Cybersecurity Risks
Takeaway: DC plan sponsors and other organizations should be careful to remind employees and plan participants of proper cybersecurity practices in a time of increased cyber vulnerability. Background: With much of the U.S. workforce engaging in social distancing and isolation best practices, we have seen a shift to working remotely at an unheard-of pace. Additionally, there is […]
Fed Sends Strong Message, but More Needed
On Sunday, the U.S. Federal Reserve announced several measures intended to provide liquidity and restore confidence in the markets: An emergency rate cut: Fed Funds Rate was cut 100 bps to 0.00% to 0.25%. The Fed is committed to keeping rates at the zero lower bound until “it is confident that the economy has weathered […]
Managing Turmoil: Tips for DC Plan Sponsors
Market volatility and fears of the coronavirus (COVID-19) have introduced novel concerns for many DC plans that have the potential to strain resources. Sponsors should consider what the impacts may be to the plan and how to mitigate them. So far, the coronavirus pandemic has led to travel restrictions, self-isolation, and quarantines, and has triggered […]
Staying Calm Amid Turbulent Markets
Market volatility spiked in the latter half of February and has remained elevated, driven by the spread of the coronavirus outside of China.
Impact of the Coronavirus on Markets: The Long-Term View
Markets continue to be roiled by the worsening news of the coronavirus outbreak around the world. The steep decline of the past week occurred more than a month after news of the virus first surfaced, as investors initially priced-in virus containment to China. But new reports of the virus spreading to 48 countries dimmed hopes […]
Assessing the Impact of the Coronavirus for Institutional Investors
The fast-moving coronavirus outbreak and the even faster-moving equity market response to the uncertainty present a significant downside risk to the global economic outlook. Callan does not have anything to say about the epidemic itself, and a lot of great research has already come out from the asset management community. What we can offer is […]
Assessing the Equity Market Impact of the Coronavirus for Institutional Investors
Since the first illness was reported in China in December 2019, the coronavirus has affected over 80,000 people globally and caused nearly 3,000 deaths, with reports almost each day of the virus spreading to additional areas. The majority of the pain so far has been felt in China and by companies with operations there. Many […]