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Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 1/7/11

January 10
00:01 2011

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_2011.01.07_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:

Should What DOL’s New Regs Reveal about Most Widely Held 401k Mutual Funds Worry Plan Sponsors?” (Fiduciary News, January 3, 2011). If, as some believe, the preponderance of these lower performing funds is the result of “better marketing and brand familiarity,” the question remains: Do the new DOL mutual fund reporting requirements merely add to the worries of 401k plan sponsors?

And the results are in:

It’s that time of year… No, wait. That was last month. Well it’s a different time of year and here’s what the mass media reported, (as opposed to the usual industry media insiders).

How Largest 401k Stock, Bond Funds Fared in 2010,” (ABC News, December 30, 2010) We chose this one because it shows two things: 1) Most investors just look at the horse race numbers (i.e., the performance numbers); and, 2) The pros never let the lacks (like the actual year end in this case) get in the ways of a scoop. Truth be told, the DOL model comparison chart featured in the Fiduciary News story told a lot more about the most widely held 401k mutual funds.

One more time, in case you didn’t hear right:

Although it spilled a lot of ink, the ticking time bomb of public employee pensions remains under the radar for most readers, reporters and analysts. Here, the venerable New York Times becomes part of this vastly ignored record.

Pension Fund Losses Hit States Hard, Data Show,” (New York Times, January 5, 2011) The trouble with this article deals with its misleading merger of the pension data with unemployment insurance data. Worse, the New York Times quells any concerns by saying this problem won’t really manifest itself until a generation or two down the road.

Well, that was a fun diversion, now let’s go back to something that really matters:

So much for relying on the mass media for useful information on this industry. Turning to the usual media suspects we find a few rather interesting tidbits that may significantly impact the typical Fiduciary News reader.

DOL: Advice Rules To Get Tougher.” (On Wall Street, January 1, 2011) This article is all about the coming of a new uniform fiduciary standard. The article suggests the new DOL rules will align with the new SEC rules and become a game changer in the industry.
SEC May Impose Disclosure-Only Reg, Not Fiduciary Duty, for Brokers,” (Advisor One, January 3, 2011) This article suggests the SEC is headed towards the watered-down disclosure based fiduciary standard feared by many of today’s fiduciaries. According to this story, we’ll know by January 21st when the SEC reports to Congress.
Time For A Higher, Single Standard Of Care For Investors,” (Forbes, December 29, 2010) “Most big firms tout their reps as ‘more than brokers’ but without a fiduciary standard that’s just empty talk” touts the sub-head of this article, penned by a veteran industry insider. It’s worth the read just for the links to related articles.
Fees the Focus of EBSA Regulatory Agenda,” (, January 4, 2011) Let’s not forget fees, claims the DOL, not a day late or a dollar short. Come to think of it, maybe fees would be less of an issue if all advisers followed a real 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.

Wilmington Trust Targeted in 401k Investigation,” (, January 3, 2011)
Vanguard pairing 401k investors with CFPs,” (Investment News, January 6, 2011)
Getting the Most from a 401k,” (Financial Planning, January 7, 2011)

Wisdom from Some of Our Favorite Blogs:

Chicago Financial Planner: Its 2011, What Do I Do Now? – Retirement Plans
fi360 Blog: Fiduciary Links: Why an SRO for advisers could happen
401kBasics: Plan Sponsor Quick Tips: Common Plan Mistakes – Usage of Compensation Definition
David Wray’s Blog: 401k Fee Disclosure, I Can Hardly Wait The Fiduciary Process is Only As Good As the Questions You Ask What is the End Game With Target-Date Funds; Retirement or Death?
The 401k Fiduciary Advice Blog: BeManaged January Newsletter – 2010 Review and Look Forward at 2011
The 401k Fiduciary Advice Blog: Don’t Get Burned – Put More Focus on the Recipe Than the Ingredients
fi360 Blog: Is FINRA Suitable?

Hot Tips from Popular Web Resources:

Human Resource Executive Online: Solutions to the Target-Date-Fund Dilemma
Reish & Reicher: Growth Is Good and Less Expensive-Under ERISA, Fiduciaries Must Evaluate Whether Arrangements with Service Providers Are Reasonable
Compensation.BLR.Com: ERISA: Plan Fiduciaries Gain Protection from Employee Lawsuits
EBSA: DOL Fall 2010 Semi-Annual Agenda for Rulemaking and Regulations
FreeErisa: BNA Books Publishes 2011 Edition of ‘ERISA Regulations’
SunGard Relius: Annual and Quarterly Disclosures of Individual and Administrative Expenses

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA

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