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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 6/28/13

July 01
00:02 2013

1020805_25983300_Trending_Topics_2013.07.01_stock_xchng_royalty_free_300Welcome 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:
7 Basic Investment Concepts Every 401k Participant Must Understand,” (, June 25, 2013). While savings is the critical issue, there are those few employees who have these time and resources to study investing. This is for them.

Compliance – Washington Fiddles as Retirees Burn:
It’s July. It’s Washington. The Doldrums approach. Expect more of the same.
New fiduciary rules remain elusive,” (BenefitsPro, June 25, 2013) Successful industry lobbying means retirement investors will have to wait longer before they can be assured advisers will act only in the investors’ best interests. The DOL now says September at the earliest for its new Fiduciary Rule and the SEC, well, it’ll be wait ‘til next year for them.
State Pension Burdens Vary Widely,” (, June 27, 2013) Ya think?
Graff: ‘Blank Slate’ Approach to Tax Reform Would Put Retirement Savings at Risk,” (NAPA Net, June 28, 2013) Why must politicians always tinker with the things that are going right and ignore the things that are going wrong?

Fiduciary – What’s It All About, Maarr-ee…:
Is it just for the moment we live? What’s it all about when you sort it out, Mary? Are we meant to take more than we give.. Or are we meant to be kind?
Annuitization of 401k plans: DOL Safe Harbor Addresses Fiduciary Concerns,” (Employee Benefit Adviser, June 25, 2013) Just because “Safe Harbor” contains the word “safe” doesn’t mean you’re out of the woods yet, as the article concludes.
SEC comments muddy fiduciary standard waters,” (BenefitsPro, June 25, 2013) It looks as though the industry lobbyists are winning yet again as the SEC speaks of pulling back on its pledge to broaden the fiduciary standard to all advisors, not merely to advisers. We’re sure the public will totally understand the and grasp the significance of the difference in spelling. (Sarcasm Off.)
Dear SEC Chairwoman: About That Pesky Fiduciary Issue…,” (AdvisorOne, June 28, 2013) A must read for every fiduciary advocate.

Fees – This is What It’s All About:
Hmm, it a perfect universe, actions do have consequences. It appears we’re more perfect that we thought. Well, that is until you read the main stream press.
Limiting the 401k Finder’s Fee,” (New York Times, June 22, 2013) We’re so desperate for a story on fees we’ll even stoop so low as to cite the New York Times, a rag infamous for low quality reporting on 401k stories. This article surprised us. It could have appeared in In fact, it could have appeared in any number of industry media outlets because the salient portions of this story are at least a year old.
Prudential, Cigna in $35 million 401k suit settlement,” (InvestmentNews, June 25, 2013) This is a biggie. It’s a biggie because the critical issues were “prohibited transactions” and “self-dealing.” This hits the jugular of fiduciary responsibility and should (rightly) have all plan sponsors on their toes.
Ask Matt: 401k plans a good deal, even with fees,” (USA Today, June 26, 2013) In high school math tests, you’re required to show your work, not just the final answer. This way, even if you got the final answer right, if you got it right for the wrong reasons, you wouldn’t receive full credit. This author would not receive full credit. In fact, if we were running USA Today, we’d reassign the writer to the gossip column, since the answer has as much credibility as most gossip columns.

Investments – Wake Up and Go To Sleep:
This can also be called the “Goldilocks Rule.” In other words, don’t ignore your investments, but don’t become obsessed with them either. Find, as Aristotle might advise, the happy middle and then pay attention to the things that really matter.
How to Review Your Investments,” (, June 26, 2013) A good primer for the non-professional.
401k advice: Let’s take a different perspective,” (BenefitsPro, June 27, 2013) Once again, it’s all about savings, not investments. If you find yourself talking about investments to retirement savers, you ought to read this article.

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.
Median Retirement Balance Is $3,000 for All Working-Age Households,” (AdvisorOne, June 20, 2013)
Retirement Shortfall May Top $14 Trillion,” (, June 20, 2013)
‘Derailers’ throw retirement plans off track,” (BenefitsPro, June 26, 2013)
Does Re-enrolling Participants Make Sense?” (Employee Benefit Adviser, June 26, 2013)
Empowering Employees for Retirement Readiness,” (, June 26, 2013)
Don’t let these 6 surprises wreck your retirement,” (MarketWatch, June 27, 2013)
The Elements of Retirement Readiness,” (, June 27, 2013)
Caterpillar Investigated for Potential ERISA Suit,” (, June 27, 2013)

Wisdom from Some of Our Favorite Blogs:
Fi360: Fiduciary Links: TDF Webinar Questions Answered |
The Chicago Financial Planner: What Lifestyle Changes Will You Make in Retirement? |
Scholarly Financial Planner: FINRA: Its 1942 Failure – Effects on Trust, Capital Formation and the U.S. Economy |
Scholarly Financial Planner: Students: Live Your Life by Design, Not By Default |
The Trust Advisor Blog: Thinking About Money Leads to Bad Behavior |
fi360: Good Insurance Decisions Require Appropriate Information |
Boston ERISA Law Blog: Cancelling a SERP and the Limits of Preemption |
The Trust Advisor Blog: Six Facts To Prove Americans’ Lack of Financial Planning |
RetirementRevised: Do no harm: Protecting retirees in shaky pension plans |
Squared Away Blog: 401k Plans Stall, Post-Auto Enrollment |
Retirement Plan Blog: Miscommunicating the Benefit Plan, Still The Same | Rates of “Return” |

Hot Tips from Popular Web Resources:
NAPA Net: Excessive Fee Lawsuit Settled for $35 Million |
NAPA Net: Case of the Week: ERISA Fidelity Bond vs. Fiduciary Liability Insurance |
NAPA Net: 7 Must-know Investment Principles for Participants |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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