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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 1/6/12

January 09
00:02 2012

1020805_25983300_Trending_Topics_2012.01.09_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. But, note this well, we avoid press releases masquerading as news stories (even though they might be reported by journalists) as well as mass media pabulum that merely mouths investment myths and mistakes.

FiduciaryNews Lead Story:
Will 2012 Be the Year of the 401k Fiduciary?” (Fiduciary News, January 4, 2012). Which plan sponsors will be most impacted by 2012’s emerging regulation? Industry veterans share their thoughts on the meaning of these rules, who they will impact the most and what to expect in 2012.

Fiduciary – The World is Changing:
Regardless of what happens at the regulatory level, the industry is slowly preparing for the inevitable. Perhaps it’s time for plan sponsors to do the same.
Retirement plan brokers outsource fiduciary duties,” (InvestmentNews, January 1, 2012) This story presents an interesting idea: If brokers don’t want to act as a fiduciary, but the DOL requires (or highly encourages) the plan sponsor to hire a fiduciary, what if the brokers begin partnering with third parties to provide the fiduciary function?
Small 401k plan sponsors can run but can’t hide, (BenefitsPro, January 5, 2012) With all the new regs coming this year, smaller 401k plan sponsors – the one’s without dedicated HR personnel – may be hit the hardest.
CEO of the Largest RIA Turns Fiduciary Evangelist,” (Financial Planning, January 6, 2012) Maria Elena Lagomasino, CEO of the country’s largest RIA, Palm Beach Gardens, Fla.-based GenSpring Family Offices says, “This is one of the core issues that I worry about.” She goes back to the Founding Fathers to prove her point.

Fees – Will She or Won’t She?:
A fury of reports met the New Year claiming the DOL, while promising to release the new Fee Disclosure guidelines by the end of January, may also delay the April 1st implementation date. So, what will Phyllis Borzi do? Only her hair dresser knows for sure.
Shining a light on 401k fee reports,” (USATODAY, December 30, 2011) Here’s a mainstream media article on what industry insiders have been reporting on for more than a year now. Notice the difference. See how this article appears intent on agitating 401k investors. The story also does a good job of itemizing all the fees.
Exclusive: Labor dept may delay 401k fee disclosure,” (Reuters, January 4, 2012) According to individuals who have spoken to people within the Department of Labor, there’s a very good chance the final guidelines will be issued by the DOL by the end of the month. On the other hand, the DOL is sympathetic with industry concerns about the “short” period to prepare given the current April 1st target date.
Fee disclosure deadline may be delayed,” (BenefitsPro, January 4, 2012) Same story, different take.
DOL to AdvisorOne: Department ‘Has Not Signaled’ Extension of April 1 Fee Disclosure Deadline,” (AdvisorOne, January 5, 2012) Hold your horses! Not so fast! The DOL has not yet thrown in the towel, or so says one of their spokesman. Fred Reish, on the other hand, begs to differ.
Will Labor Department’s request slow fiduciary proposal?” (InvestmentNews, January 6, 2012) After a flurry of reports based on rumors in the days prior, this article tries some organize things using old-fashioned reporting.

Investments – A Bullish Sign?:
The market has a tendency to zig when everyone else zags. In fact, the decisions of everyday (i.e., non-professional) investors used to be a reliable contrary indicator. Maybe we’ll find out if it still is.
Aon Hewitt: 401k participants keep moving away from equities,” (Pensions & Investments, January 2, 2012) Oddly enough, another article reports retirees, fed-up with low returns from fixed income investments, are moving back into equities.

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.
Three sure-fire 401k predictions for 2012,” (BenefitsPro, January 3, 2012)

Wisdom from Some of Our Favorite Blogs:
fi360 Blog: Fiduciary Links: Will 2012 bring a new fiduciary rule proposal?
fi360 Blog: Why the SEC Will Adopt a Fiduciary Rule
ERISA Lawyer Blog: IRS Provides Guidance On Whether Contributions To A Retirement Plan May Be Based On S Corp Distributions

Hot Tips from Popular Web Resources:
Workforce.com: Aon Hewitt: 401k Participants Keep Moving Away From Equities

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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