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Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 12/3/10

December 06
08:18 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 1020805_25983300_Trending_Topics_2010.12.03_stock_xchng_royalty_free_300fiduciaries and those 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:

Fiduciary Checklist: Target Date Problems vs. DOL Proposed Rule,” (Fiduciary News, December 2, 2010). It’s not like folks hid their Target Date Fund gripes. The question is: Was the DOL on target with its new disclosure rules? This popular article takes a look at the most highly publicized issues with TDFs and how (or whether) the DOL addresses them.

Target Date Funds:

You can’t blame the DOL for trying, although a growing number of voices wonder why they didn’t try harder – or at least wait for the SEC to have its say first.

DOL floats disclosure rule for 401k target date funds,” (Investment News, November 29, 2010) A non-nonsense piece with a “this is what they did” attitude.
DOL proposal looks to broaden target-date disclosure,” (Pensions & Investments, November 30, 2010) This article reads more like a DOL press release.
DOL Floats Target-Date Fund Proposal,” (Advisor One, November 30, 2010) A combination of the above two stories, this write-up reads rather shallow.

12b-1 Reform – SEC wonders if they keep mum maybe it’s all go away:

This is a drip, drip, drip despite the increasing likelihood the SEC will defer this ad infinitum.

Put 12(b)-1 reform on the front burner,” (Investment News, November 28, 2010) The idea is Dodd-Frank dumped too much on the SEC and so the overburdened regulator has to decide its priorities. Have the big guys won again?

Fiduciary – Would you like one lump or two?:

Here’s an issue that will not go away, no matter how much marketing dollars the competing sides throw at it. Honesty, it’s not rocket science. You’re either a fiduciary or you’re not. You can’t change the definition of reality, although there’s undoubtedly a lawyer or two out their willing to go through the trouble of charging billable hours to research this.

Probe highlights need of fiduciary standard, say advocates ,” (Investment News, November 29, 2010) Here’s an idea: The insider trading “scandal” (not enough arrests to warrant a real scandal yet) – where analysts allegedly break the law for the benefit of their clients – will make investors want a fiduciary standard that puts clients ahead of all else (including the law?). It’s tough to tell if this is what the article is really saying or if it’s just saying, “hey, a financial guy got arrested so we need more government.” Honestly, this piece might be doing more damage than good.
One Standard or Two?” (Financial Planning, December 2, 2010) Bob Veres in his terrifically blunt style. Warning: Language might not be suitiable for those who like operating under the suitability standard.

ETFs – Better late than never:

The Wall Street Journal piles on what has already been piled on upon.

Full Disclosure: Prospectuses Stink,” (Wall Street Journal, November 27, 2010) Sure the headline says ETFs, but this is a problem of all mutual funds, indeed of all investment products.

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.

The Million-Dollar Retirement Plan,” (US News and World Report, November 29, 2010)
How to Improve Your Financial Willpower,” (New York Times, November 30, 2010)
Plans’ trustee faces DOL lawsuit over asset shift,” (Pensions & Investments, November 29, 2010)
Settlement approved in General Dynamics 401k suit,” (Pensions & Investments, November 24, 2010)
Study: 401k Contributions Too Small,” (Financial Adviser, December 1, 2010)
7 deadly sins of 401k investing Outside the Box,” (MarketWatch, December 3, 2010)

Wisdom from Some of Our Favorite Blogs:

fi360 Blog: Fiduciary Links: Does your firm have a social media program?401kBasics: Plan Sponsor Quick Tips: Understanding Compensationfi360 Blog: A Fiduciary ‘State’ of MindChicago Financial Planner: The Deficit Commission and Your Retirement

Hot Tips from Popular Web Resources:

Pensions & Benefits Law: Are You an ERISA Fiduciary? It May Become More Likely if You Give Investment Advice
SunGard Relius: Participant Fee Disclosure Regulations – Part II: How do the regulations affect fiduciary protection under 404(c)(1) and (c)(5)?
FreeErisa: New Data from The Principal Reveals Power of Employer Match
FreeErisa: Study Reveals Average 401k Participant Can’t Afford to Retire Until Age of 73

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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