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Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 12/24/10

December 27
23:23 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 1020805_25983300_Trending_Topics_2010.12.24_stock_xchng_royalty_free_300those in the business of supporting these fine folks. If you smile when you read these entertaining snippets, well, that’s the idea.

Fiduciary News Lead Story:

A Fiduciary Test Drive of New DOL Fee Chart Using Top 401k Funds,” (Fiduciary News, December 21, 2010). Here’s your chance to see a real example of the new DOL 401k Disclosure Rule in practice. Complete with links to vital DOL documents. In an otherwise light news week, Fiduciary News comes through with a hard-hitting series of four articles on the DOL’s rule (This link is to Part I; Part II examines the performance reporting side of the new disclosure; Part III looks at the fee half of the disclosure; and, we’ll be kicking off the first week of the new year with Part IV – a look at what the DOL’s disclosure tells us about the top ten most widely held funds.) Read the first three parts and determine for yourself what’s good, what’s bad, what’s missing and whether anyone will understand the DOL’s new model comparison chart.


The battle continues between the big firms pressing for the suitability standard and the little guys standing up for the Fiduciary Standard. Bet you can’t guess who’s going to win.

Financial planners on Finra oversight: Thanks, but no thanks,” (Investment News, December 17, 2010) There’s a popular feeling the 2008 credit crisis had as its roots the reversal of Glass-Steagall in the late 1990s. That’s not quite true, but let’s suspend disbelief for the moment. Finra wants to undo the Investment Adviser’s Act. The smarter folks are noticing the parallels with the correlation between banking unreform and banking crises.
EBSA Sets 2011 Hearing on Fiduciary Definition Change,” (, December 22, 2010) If you’re an advocate for the Fiduciary Standard, circle Tuesday, March 1, 2011 in your calendar (and you may as well keep Wednesday, March 2, 2011 open just in case). That’s the day the DOL will hold its public hearing. By the way, they’ve extended the official comment period by two weeks so it now ends on February 3, 2011 instead of January 20, 2011.

Joy to the Investor!:

It’s always interesting to see what’s going on in the world of investing and how that might impact the 401k fiduciary. Clearly, fiduciaries have been warning plan participants that bond funds were not really bonds, but more like dividend stocks. Likewise, they’ve been warning employees to shy away from company stock. Could it be this was the week the collective chickens came home to roost?

Bond Funds Take It on the Chin,” (Wall Street Journal, December 20, 2010) The Cassandras have been singing this tune for some time now. It looks like QEII finally confirmed all those crystal balls.
401k Participants Shun Company Stock,” (CFO, December 21, 2010) Can it be people are finally listening to the lessons of Color Tile, Enron and all those other corporate carcasses? This eleven year trend shows employees might be smarter than you think.

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.

Year In Review Cover Story,” (, December 21, 2010)
Top-Rated 401k Plans by Brightscope,” (New York Times, December 21, 2010)

Wisdom from Some of Our Favorite Blogs:

fi360 Blog: Fiduciary Links: FINRA and NAIFA continue their pushesfi360 Blog: Influencing fiduciary law in 2011Boston ERISA Law Blog: Market Down? Then ERISA Lawsuits Must Be Up

Hot Tips from Popular Web Resources:

ERISAdiagnostics: DOL’s Interim Final Rule Requires Detailed Fee Disclosure.
North Carolina Bar Association: District Court Holds That ERISA Precludes a Plan Administrator with Claim Against the Insured from Pursuing Equitable Remedies Against Insured Attorney’s Contingency Fee
Courthouse News Service: Court Rejects Teachers’ ERISA Case Against Union
SunGard Relius: Participant Fee Disclosure Regulations – Part IV: General Plan Disclosures
Index Universe: The Next Trillion? ETFs In 401k Plans

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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