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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 12/28/12

December 31
00:23 2012

Welcome to 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:
Most Popular Stories in 2012 – #10 to #6,” (, December 26, 2012). Among them: A couple of “How-To” articles, two myth busters and one piece of sound advice.

Compliance – Audit Lang Syne:
When the door knocks, will you be ready. There’s a government hungry for money on the other side of the threshold and it’s looking at your cashbox.
Be careful: A compliance guide for plan sponsors,” (BenefitsPro, December 21, 2012) What the title says. Moreover, it’s not whether or not you’re prepared for an audit, but whether you know if you’re red-flagged or not.

Fiduciary – Happy New Investment Environment:
With the ever evolving investment scene, we see an ever evolving 401k concept. Is this good? Is this bad? Is this ugly? These are important questions every plan sponsor needs to ask – and answer.
Will the DOL Finally Show that Fiduciary Advice is Better Business?” (AdvisorOne, December 27, 2012) This article presents a very good overview of the evolution of the advisery business since the 1980s (although it fails to mention how RIAs used to manage stock portfolios, not mutual fund portfolios, which has led to a problem no one ever talks about).
Advisers at Center of Changing 401k Landscape,” (Wall Street Journal, December 27, 2012) Interesting take on individual investment advice. It appears some feel offering this will actually increase fiduciary liability on the part of both the provider and the plan sponsor.

Fees – Guide Lombardo:
The bubbly poured in July has gone flat for want of a consistent guide from the DOL. Don’t worry. Be happy. That’s an easy thing for them to fix. And they will.
The great fee disclosure experiment,” (BenefitsPro, December 26, 2012) Don’t worry if the bulk of the participants ignore these disclosures. Be happy if fee disclosure helps only one participant, for then it would have been worth it (for at least that one).
Time again for 401k sponsors to take a stand,” (BenefitsPro, December 27, 2012) A good guide in lieu of the DOL’s failure to provide a guide, for those who want a guide on fee disclosure.

Investments – Rockin’ New Year’s Thief:
When will we ever learn? Salesmen don’t sell products to benefit the customers, they sell products to meet quotes, receive bonuses and earn fancy trips to exotic tropical locales. That’s why we don’t buy pills from drug companies, we only get them through licensed doctors. Think about it. This has nothing to do with medical reform.
401k Participants Warm Up to Target-Date Funds,” (Financial Planning, December 21, 2012) And this surprises who? With the big push to sell these unproven products, products given the seal of approval by the U.S. Government, is there any wonder? Not sayin’ it’s good or bad. Just sayin’.

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.
Ameriprise 401k lawsuit set for January court date,” (InvestmentNews, December 26, 2012)
4 reasons not to roll over an old 401k,” (MarketWatch, December 28, 2012)

Wisdom from Some of Our Favorite Blogs:
fi360 Blog: Fiduciary Links: Season’s Greetings |
Business of Benefits: Re-Thinking Fiduciary Allocations under ERISA Sections 402 and 405: Back to the Future |
The Chicago Financial Planner: Friday Finance Links December 28, 2012 |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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