Steve Montagna A Shifting Landscape  “Be the change that you wish to see in the world.” Mahatma Gandhi  Two famous sayings have been playing in my mind recently. One is, “the only thing constant is change.” The other (regarded by some to be a blessing, others a curse) is, “may you live in interesting times.”  Both of them strike me as having a subtext of warning about them...." />

Steve Montagna A Shifting Landscape  “Be the change that you wish to see in the world.” Mahatma Gandhi  Two famous sayings..." />

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NAGDCA Newsletter - The Contributor

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The Contributor - Fall 2016
Published on : Wednesday, December 7, 2016

Steve Montagna A Shifting Landscape 

“Be the change that you wish to see in the world.”
Mahatma Gandhi 

Two famous sayings have been playing in my mind recently. One is, “the only thing constant is change.” The other (regarded by some to be a blessing, others a curse) is, “may you live in interesting times.” 

Both of them strike me as having a subtext of warning about them. Don’t try to hold on to the past, and oh by the way, keep your eyes open for the next “interesting” shakeup coming your way. 

I prefer Gandhi’s perspective on change. Yes, it’s true that nothing stays the same, and yes, perhaps we should always be expecting the unexpected. But we are not inherent bystanders to the forces of change. We are helping to make it up as we go along.

Those of us working with investments and retirement are used to experiencing this. We see “markets” moving and know they are the sum total of many millions of actors buying and selling. We see retirement opportunities and outcomes shifting for our participants and know that trends, projections and averages matter very little to the individual sitting before us and asking, quite humbly, “What should I do?”

As plan sponsors and service providers we are often asked by our members to explain, forecast, and sometimes even stop change. We are like guides with lamps in the night, working the way forward with words of comfort and caution, always to destinations that can never fully be known.

It’s no small assignment. At times it can be challenging, even unsettling. But here is where Gandhi’s words are a good reminder, both for us and our participants.

Retirement and investment planning requires navigating opportunities and risks. This is unavoidable. But what is avoidable is the anxiety and doubt that so many bring to decision-making. If we apply Gandhi’s words to planning for the future, we might say that perhaps it matters less what choices we make than how we make them.  If we long for a future of both predictability and the realization of big dreams, then best to focus on choosing both confidently and optimistically.

There are many who will offer caveats and warnings, which is fine. We need them too. But if those are all we listen to, we will tend to experience change as that next shoe just waiting to drop. We can choose to see change as not merely a “constant,” or a random grab bag of fortunes and misfortunes, but as the ongoing opportunity to create, redefine, and re-imagine.

Our perspective is always our greatest gift, and it is always more powerful than any “external” event that we imagine to be the luck of the draw. We are the change we wish to see – and create. Have a wonderful, hopeful, and inspired 2017!


NAGDCA Benchmarking Portal 

Last month, NAGDCA launched its new online portal designed to help public sector retirement plans benchmark themselves against similar plans based on plan type, plan demographics, plan design and features, services, investments, governance, and fees. The portal offers various tools and reporting capabilities based on the Perspectives in Practice benchmarking report published in September that includes 62 individual public sector retirement plans representing $116 billion in plan assets and 2.4 million individual plan participants.

Governmental plans who participated in NAGDCA's survey receive access to the online portal free of charge. Information about accessing the portal has been distributed. If you participated and need help accessing the portal,
please contact Heather Baber at

If you did not participate in the survey or are an industry member and would like access to the portal, please visit us online at to view the fee structure. Please contact NAGDCA HQ for more information and to gain access. 

Research Brief: Interest Rates

Interest rates have remained at a steady low for some time and many had begun to think the U.S. Federal Reserve would not raise rates in 2016, but in recent months the Fed has shared that rate hikes are a possibility in the near future.

Given the persistent possibility of increased rates, many investors think about how their fixed income investments asset classes may be impacted by periods of rising interest rates and how certain fixed income asset classes may be more advantageous under various market conditions that may trigger monetary policy changes.

The ICMA-RC research brief, “Rising Interest Rates: Impact on Fixed Income,” explores factors impacting fixed income asset classes or sectors, and identifies certain VantageTrust1 funds that fall within the applicable asset class.

Two conclusions emerged from the analysis:

1.  the basic fact that income can be a powerful component to fixed income investments — both as a component to returns and a hedge to negative price returns when rates rise; and,

2.  high yield bonds and stable value investments may provide helpful contributions to a diversified portfolio of fixed income investments and equities, given our current expectations that most approximate an environment with “Controlled Growth” accompanied by a gradual rise in interest rates and benign inflation.

The authors examined the pattern of short-term rates during rising interest rate periods over 30 years, market conditions that may have influenced the increases, and the outcome on 11 different fixed income asset classes and sectors. Among their observations: despite conventional wisdom, fixed income sectors generated positive returns during four rising rate periods over the 30-year time frame. Also, High Yield and Stable Value stood out as top performers for three of the four rising rate periods.

See the complete research brief at this link.

1VantageTrust is a group trust established and maintained by VantageTrust Company, LLC, a wholly owned subsidiary of ICMARC. It provides for the commingled investment of the assets of retirement and deferred compensation plans administered by ICMA-RC. Participation in VantageTrust is open only to Plans sponsored by state and local governments or units, agencies, or instrumentalities of those governments.

This article is intended for educational purposes only and is not to be construed or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice and shall not have any liability for any consequences that arise from reliance on this material. It is recommended that you consult with your personal financial advisor prior to implementing any new tax or retirement strategy. AC: 1016-8533


The elections are now over and Donald Trump is set to become the 45th President of the United States. President-elect Trump has begun to name nominees for his cabinet but has not yet named nominees for either Secretary of the Treasury or Labor. While it is known that President-elect Trump has an interest in tax reform, it is currently unclear whether that would include items of interest to NAGDCA.

Democrats were able to pick up seats in both the House and Senate, but they will remain in the minority in the next Congress.  Republicans do not have 60 seats in the Senate so this will make it more difficult to pass legislation, but not impossible. Many pieces of legislation can be passed via reconciliation that only requires a simple majority of 51 votes in the Senate. There are strict rules for what can be passed via this process however, it is likely most of tax reform can be passed this way.

In the House of Representatives, unlike the Senate, a simple majority of 218 votes can pass any legislation. Additionally, as tax legislation must originate in the House, it is likely proposals will begin being released and will be based on previous proposals.


Congress is currently operating under a Continuing Resolution (CR) that is set to expire on December 9. Congress is expected to pass another short-term CR that will likely expire in March. This would give enough time for a new Congress to convene and discuss the new president’s proposed budget. At that time, it is likely Congress will pass a budget that will cover the remainder of the fiscal year.

Tax Reform

President-elect Trump has stated that tax reform is one of his top priorities and it is likely proposals will be introduced shortly after Congress convenes. There have not been any proposals released mentioning pensions as part of a comprehensive tax reform package, but since pensions have been part of almost every proposal released in the last few years it is likely they will once again be included in a tax reform package.

During the summer House Speaker Paul Ryan (R-WI) also released a tax reform proposal. In it he mentions the House Committee on Ways & Means will look at the current system, but he did not provide details on what that may include.

National Retirement Security Week

NAGDCA is pleased to announce on September 26 the Senate passed Senate Resolution 575 calling for a National Retirement Security Week (NRSW) during the week of October 16-22. As in past years, this was a bi-partisan resolution that was introduced by Senators Enzi (R-WY) and Cardin (D-MD). 

This year there were three additional co-sponsors: Senators Alexander (R-TN), Collins (R-ME), and Wyden (D-OR). Senator Wyden is ranking member of the Senate Committee on Finance which has jurisdiction over governmental retirement plans. Senator Alexander is chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), which has jurisdiction over ERISA plans. Senator Collins is chairman of the Senate Special Committee on Aging and a member of the HELP Committee.


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