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Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 9/24/10

September 27
00:54 2010

Welcome to Fiduciary News Trending Topics. Each Monday, we’ll give you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks. If you 1020805_25983300_Trending_Topics_2010.09.24_stock_xchng_royalty_free_300smile when you read these entertaining snippets, well, that’s the idea.

Fiduciary News Lead Story:

ERISA Plan Sponsors Wonder: Do Web-Site Alexa Ratings Suggest Victory for Fiduciary Standard?” (Fiduciary News, September 20, 2010).  Fiduciary News compiles internet statistics on various Fiduciary Standard proponents and opponents and discovers some interesting results. But a bigger question lies behind the analysis…

Pension Problems Perplex Public Pontificators:

We don’t make this up, folks. It appears public policy makers are just plain perplexed by pension problems. So what’s the basis for looking to them to set a broader economic policy if they can’t even understand what the private sector has worried about for at least 3 decades?

Pension Gaps Loom Larger,” (Wall Street Journal, September 18, 2010) The median expected investment return for U.S. public pension plans surveyed remains at 8%. The S&P lost money in the last decade. What planet are these guys from?
The Crisis in Public Sector Pension Plans,” (Mercatus Center – George Mason University, June 23, 2010) We found this little gem buried in a news report last week. Feast with thine eyes.
S&P 500 Pensions Most Underfunded Since ’99, Credit Suisse Says,” (Bloomberg, September 23, 2010) “Underfunded S&P 500 pensions may hurt profit, Credit Suisse says,” (Pensions & Investments, September 23, 2010) These twin articles reveal the problems those large companies who kept their pensions may soon face.

Annuities Annul Analysis:

There’s nothing like an effective PR agenda. Who was it – Goebbels? – who said something to the effect, “if you tell a lie long enough, it becomes the accepted truth”? Anyways, if you don’t get it, see the above about pension annuities – er – plans.

Annuities may be coming to 401k’s,” (MarketWatch, September 20, 2010) “Annuities may be coming to 401k Plans,” (FreeErisa, September 20, 2010) [WARNING: Possible broken link] “Annuities May Be Coming To 401k’s,” (Financial Adviser, September 20, 2010) This trio of articles all come from the same Robert Powell piece that appeared in MarketWatch proving, once again, if no one’s buying your argument, shout louder.
Is there duplicity at DOL?” (Employee Benefit News, September 1, 2010) Just to make sure everyone didn’t forget what exactly is going on here, the article resurfaced in the news summaries last week. A must read – it kind of makes you wonder about a lot of things.

Fiduciary Fracas Festers:

Follow the money. Will you just stop and follow the money? What more can we say? Somebody’s got to come down on this one, because the industry can’t and the consumers haven’t bothered to pay attention.

TD’s Bradley: Broker or adviser – choose one,” (Investment News, September 21, 2010) The president of TD AmeriTrade breaks ranks with his brethren and calls a spade a spade.
Advisers vexed, confused by Dodd-Frank reform,” (Investment News, September 21, 2010) If someone with no relevant experience wrote a 2,300 page manifesto on your business, would you understand it?
SEC fiddles while investors burn,” (MarketWatch, September 22, 2010) Chuck Jaffe bluntly asks the SEC: Does it want to protect investors, or rogue advisers?
GOP faces long odds in reversing Dodd-Frank,” (Investment News, September 23, 2010) What’ll fall first? Dodd-Frank or Health Care? We don’t exactly see anyone pouring tea about the former.
B-D exclusion would render single fiduciary standard pointless: Professor,” (Investment News, September 24, 2010) Does it really take a rocket scientist to get this whole concept?
Hubbub over fiduciary standard underscores growing clout of NAPFA,” (Investment News, September 24, 2010) And you thought last week’s lead story in Fiduciary News was a bit of a stretch? Hmm, turns out we might have been on to something…

DOL Dithers Diligently on Deep Decisions:

Just when it looked like the SEC sat in the driver’s seat regarding policy making, along comes the DOL (in the guise of Phyllis Borzi, Assistant Secretary of Labor for Employee Benefits Security Administration) to remind us they’ve been diligently working on the very same matters for – oh, let’s say a lifetime.

DOL’s Borzi Lays Out EBSA’s Agenda,” (Investment Advisor, September 20, 2010) This is probably the best (albeit brief) news report on the annual Department of Labor (DOL) Speaks conference in National Harbor, Md. The conclave presented the DOL’s promises of decisions on everything from target date funds, annuities, the adviser rule and the fiduciary standard.

Major Plan Sponsor Moves and News:

What are other plan sponsors and fiduciaries doing with their plans? And how are participants responding? The latest in legal proceedings involving plan sponsors and fiduciaries.

Will Supreme Court reverse decision in Janus lawsuit?” (Investment News, September 20, 2010)
Families struggle to build nest egg in wake of recession,” (The Washington Post, September 19, 2010)
Who Are The Nation’s Best Plan Sponsors,” (PLANSPONSOR.com, September 20, 2010)
Retirement plans hit a ‘double whammy’,” (FreeErisa, September 20, 2010)
New Rules May Extend Roth Conversions to 401k’s,” (New York Times, September 21, 2010)
Borrowing from Yourself: The Determinants of 401k Loan Patterns,” (Michigan Retirement Research Center, September 2010)
Retirees Duped by Derivatives With Structured Notes Sale Surge,” (Bloomberg, September 23, 2010)
General Dynamics settles 401k fee suit,” (Pensions & Investments, August 9, 2010) [Don’t know why P&I pushed this last week given the stale reporting date]
Why investors don’t need ETFs,” (MarketWatch, September 19, 2010)

Wisdom from Some of Our Favorite Blogs:

401kBasics: Plan Sponsor Quick Tips: Setting Up Plan Records!fi360 Blog: Fiduciary Links: The effect of fees a hot issue last weekfi360 Blog: Practice 2.4: Formalize the policy portfolioThe 401(k) Fiduciary Advice Blog: Final Regulation on 401(k) Advice Bill Due Early 2011

Hot Tips from Popular Web Resources:

Governing.com: Public Pensions Investing for Less
SmartMoney.com: Is Free 401(k) Advice Worth the Money?
AdvisorPerspectives.com: Was it Really a Lost Decade?

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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