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Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 8/12/11

August 15
00:15 2011

1020805_25983300_Trending_Topics_2011.08.12_stock_xchng_royalty_free_300Welcome 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 smile when you read these entertaining snippets, well, that’s the idea. If you think we’re missing something important, then please let us know.

Fiduciary News Lead Story:
Which Fiduciary ‘Cost’ Matters Most: The Broker’s or the Retirement Investor’s?” (Fiduciary News, August 9, 2011). Both sides of the fiduciary debate suggest their view reduces retirement investor costs. They can’t both be right. Luckily, the marketplace offers a real testing ground, leaving only one question: Who does the DOL protect – the industry or the investor?

Fiduciary – Battling Tops:
With Congress in recess, the lobbyists have moved to major media outlets. Too bad there isn’t an equally well-endowed group to pay for countering the pro-broker folks.
Is the DOL supposed to protect brokers or investors?” (BenefitsPro, August, 11, 2011) Both sides of the fiduciary debate suggest their view reduces retirement investor costs. They can’t both be right. Luckily, the marketplace offers a real testing ground, leaving only one question: Who does the DOL protect – the industry or the investor?
The Borzi Savings Bomb,” (Wall Street Journal, August 12, 2011) Disappointingly, the editors repeat the stale mantra of the industry lobbyists. It’ll be interesting to see who’s the first to get them to publish an op-ed refuting the editorial.

Investments – Mousetrap:
In theory, many like the idea of the DOL and the SEC leveling the playing field by rewriting or enforcing the fiduciary standard. In practice, government regulation too often produces Rube Goldberg fiascos like this. Hmm, come to think of it, didn’t the big business lobbyists have a hand in this, too.
New report shows explosive growth in target date funds,” (Employee Benefit News, August 11, 2011) Rather than offering a full slate, plan sponsors are only offering target date funds relevant to plan demographics. A study says this is bad. Other studies suggest offering a full slate is worse.

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.
401k Market a Tough Sell,” (InvestmentNews, August 7, 2011)
For 401k investors the dives are dramatic, but the recoveries can be, too,” (The Boston Globe, August 10, 2011)
The Dark Side of Automatically Enrolling Workers in 401k Plans,” (SmartMoney, August 9, 2011)
One step forward…volatility hits 401k plans,” (BenefitsPro, August 11, 2011)

Wisdom from Some of Our Favorite Blogs:
fi360 Blog: Fiduciary Links: A guide to undermining fiduciary duties
fi360 Blog: Practice 3.3: Investment vehicles are appropriate for the portfolio size

Hot Tips from Popular Web Resources:
PSCA.ORG: Without 401k, it Would be Worse

Miss anything? Feel free to add a comment below.

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About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA

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