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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 3/9/12

March 12
00:15 2012

1020805_25983300_Trending_Topics_2012.03.12_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. 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:
408(b)(2) Compliance and the Service Provider List,” (Fiduciary News, March 6, 2012). The DOL wants Fee Disclosure broken out by service. 401k plan sponsors relying on bundled service providers might be in for a surprise.

Compliance – Fiddling with Retirement Plan Laws…:
But at least it’s in a good way.
Legislation might help smaller firms offer retirement plans,” (USATODAY, March 7, 2012) This article hints at the promise of more MEPs.

Fiduciary – Business Bickers:
With a dearth of new news, why not recap the old?
Industry stiffs DOL on request for IRA data in fiduciary analysis,” (InvestmentNews, March 4, 2012) A recap of the previous week’s events.

Fees – Will the Good Guys Finally Win?:
The DOL’s new Fee Disclosure Rule means good news for (compliant) plan sponsors and 401k investors. It might also mean (finally) good news for the good guys who put principle over profits.
Leveraging retirement fee disclosure rules,” (InvestmentNews, March 4, 2012) Another article showing how “savvy advisers” can use the new rule to provide more value to their clients.

Investments – The Difference Between Learners and Lemmings:
We see two major retirement plan sponsors recognizing recent research concerning the problems of offering too many options at the same time we see more followers of TDFs just as performance data comes out showing how disappointing these investments have been.
Intel simplifies investment options in 401k plan,” (Business Insurance, March 5, 2012) The $5 billion plan will re-enroll employees and reduce the number of options from 72 to 21 “to improve outcomes and encourage employees to save enough” according to a company spokesman.
Michigan State’s 403(b) plan sheds options, record keepers,” (Pensions and Investments, March 5, 2012) N.B.: Subscription Required: This is a $3.3 billion plan and it will be reducing the number of options from 550 to 20.
Updated stable-value funds making a comeback,” (InvestmentNews, March 4, 2012) The fiscal crisis of 2008 took them down, but stable-value funds are inching their way back into the hearts of investors. Is this a good or a bad thing?
A Push for ETFs in 401k Plans,” (Bloomberg, March 5, 2012) Bottom-line: ETFs still not ready for prime time in the 401k world, but new technology might soon make them ready. Ironically, once recordkeepers can handle ETFs, they’ll be able to handle stocks, and once that happens, we might see the return to managed 401k options.
Evaluating Your Target-Date Fund Options,” (, March 7, 2012) If you’ve got to invest in TDFs, then this article outlines the most important factors to look for.
Target Date Funds Lag Benchmarks S&P,” (, March 8, 2012) OK, everyone expects the 2010 TDFs to underperform the S&P, but no one expects longer-term TDFs to do even 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.
The Ins and Outs of Roth 401k Plans,” (Wall Street Journal, March 4, 2012)
Footing the Bill for Pensions,” (Wall Street Journal, March 4, 2012)
Why have Americans forgotten the IRA?” (Reuters, March 6, 2012)
Sixty-seven million and counting: America’s involvement in retirement plans,” (BenefitsPro, March 5, 2012)
Major firms ask Congress for pension funding exemption,” (BenefitsPro, March 7, 2012)
Wal-Mart $13.5 Million Retirement-Suit Accord Is Approved,” (Financial Advisor, March 7, 2012)
Individual Retirement Accidents,” (Forbes, March 12, 2012)
Recovering From a Crash to Make a Second Act,” (New York Times, March 7, 2012)
America’s 401k obesity problem,” (BenefitsPro, March 7, 2012)
Participants Look to Plan Sponsors for Inflation Guidance,” (, March 8, 2012)
Court Dismisses Claims of Improper Investment Selection,” (, March 8, 2012)
Retirement Shortfall Risk Making College Saving Tougher, Even For Affluent,” (Retirement Advisor, March 7, 2012)

Wisdom from Some of Our Favorite Blogs:
401kBasics: Plan Sponsor Quick Tips: Test Resultsfi360 Blog: Fiduciary Links: 408(b)(2) doesn’t have to be a burden, so use it to your advantageChicago Financial Planner: Risk, Reward, and Peyton Manningfi360 Blog: Are your investment management fees excessive?Boston ERISA Law Blog: A Perfect Storm, ERISA Style

Hot Tips from Popular Web Resources:
InsuranceNewsNet: New Fee-Disclosure Regs Pose New Litigation Risks for Retirement Plan Providers
The Wagner Law Group: The Fiduciary Duty to Investigate Plan Investments

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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