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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/1/13

November 04
02:30 2013

1020805_25983300_Trending_Topics_2013.11.04_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:
Coming Soon From a 401k Plan Sponsor Near You: A New and Improved Focus on Participant Education,” (, October 29, 2013). Until communication education becomes generally accepted and standardized, it may be safer to rely on an Annual Education Program rather than an Education Policy Statement.

Compliance – A Warning Shot Across the Bow:
You can’t say you didn’t see this coming.
DOL Focusing on ‘Major Cases,’ Particularly Fee Disclosure,” (ThinkAdvisor, October 28, 2013) Well, that’s not what they really said. We know. We were there. Employee complaints will always be the number one cause for DOL investigations. Of course, that being said, all things being equal it makes sense they’ll go after the plan that is sure to drive the bigger headlines.
Does your 401k plan have an EPS?” (BenefitsPro, October 30, 2013) This could be a growing compliance concern.

Fiduciary – A Right, and a Left, and a Right, Left, Right:
Things are starting to get interesting as we approach the final round. Still, we can’t help but wonder how the end will only disappoint us.
Not all employers understand fiduciary responsibility,” (Employee Benefit Adviser, October 28, 2013) An alternative title might have been “When to Fire the Client.”
Bill to slow Labor Department fiduciary-duty rule headed for House vote,” (InvestmentNews, October 28, 2013) This is a conundrum for your average fighter for all that is Truth, Justice and the American Way. On one hand, you have the very libertarian notion that no government regulation is good. On the other hand, you have the fairness principal that all should be treated equally – and by “all” we’re referring to advisers vs. advisors. Why must the former operate under the fiduciary standard while the latter is not under the same constraints? And, finally, since when is “acting exclusive in the client’s best interest” ever a bad thing?
CFP Board Fiduciary Promise in Question,” (Financial Planning, October 29, 2013) Nothing seems to be going right for these folks lately. For those who once cherished the old IAFP, there’s a temptation to file this under “just desserts.” Still, this one could be very significant. As in “bait-and-switch” significant, since it involves a national advertising campaign. We’ll let the legal heads figure this one out.
Obama threatens to veto bill to delay DOL fiduciary-duty rule for retirement accounts,” (InvestmentNews, October 29, 2013) For those of you playing at home, this means Congressmen and Senators can vote in favor of it if they think it will help their re-election. Which is kind of weird, since one would be hard pressed to explain how voting to allow a financial advisor to continue to engage in what some would call prohibited self-dealing transactions would ever be a good thing.
DOL’s Borzi: Fiduciary Redraft Could Advance by Year End,” (ThinkAdvisor, October 29, 2013) You gotta like Borzi’s “Damn the torpedoes! Full speed ahead!” approach.
House Approves Bill to Delay Labor Department Fiduciary Rule,” (Financial Planning, October 29, 2013) Here’s the really interesting thing about this event. According to the article, although the bill came out of committee with substantial bipartisan support, the final vote showed 30 Democrats voting in favor and 165 voting against. While there is some support in the Senate, the bill lacks true momentum and, in either case, it does not have a veto-proof majority.
Fiduciary standard, 401k enhancements touted by the DOL’s Borzi,” (Employee Benefit News, October 29, 2013) More for those who can’t get enough of Borzi, including some rapier-like quotes.
The Latest, Most Outrageous Attempt to Neuter Dodd-Frank,” (ThinkAdvisor, October 30, 2013) Bob Clark’s usual excellent take on current events. This time it’s the House’s vote to thwart the progress of the DOL.

Fees – See “Compliance”:
The DOL is coming after “major cases,” with a special concentration on fees.

Investments – What’s This About Square Pegs in Round Holes?:
As Peter, Paul and Mary might say, “When will they ever learn?”
Treasury weighing ‘retirement’ bonds,” (BenefitsPro, October 28, 2013) On the face of it, this sounds oh, so, wrong. Why would the government try to compete with the capital markets in this way? Can the government – which now appears incapable of creating even the most simplest of websites – the membership site – even be capable of competing with the capital markets? Finally, from a moral and ethical standpoint, should the government compete with capital markets – ever?
Your Estate Plan Ruined My Retirement,” (, October 29, 2013) Sometimes solving one problem creates another. For those who think annuities are the cat’s pajamas when it comes to retirement plans, you might want to read this article before committing any funds.
The Top ‘Must-Have’ Feature for Annuities,” (ThinkAdvisor, October 30, 2013) This may be interesting to some. On the other hand, it’s based on the answers of a survey of annuity sales professionals, not annuity buyers. Or, from the above article, estate planners.

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.
‘After’ images,” (BenefitsPro, October 27, 2013)
Small businesses clamor for 401k help,” (InvestmentNews, October 27, 2013)
Moving the Needle with Participant Education,” (PLANSPONSOR, October 28, 2013)
Are pension investment consultants useless?” (BenefitsPro, October 28, 2013)
3 ways to help 401k plan participants become better investors,” (Employee Benefit News, October 29, 2013)
Benchmarks Based On Personal Goals Are The Future, Says Natixis President,” (Financial Advisor, October 30, 2013)
Top Ten Things All Employees Should Know About Their 401k Plan,” (Employee Benefit Adviser, October 31, 2013)
Aon Hewitt: DC plans trying harder to ensure retirement security,” (Pensions & Investments, October 30, 2013)
Should Americans Be Required to Save for Retirement?” (ThinkAdvisor, October 31, 2013)
The numbers you really need to know for retirement,” (The Tribune Democrat, October 31, 2013)
Fiduciaries Ordered to Restore Plan Assets,” (, October 31, 2013)
Retirement Recovery,” (Financial Advisor, November 1, 2013)
Employers boost company 401k match, relax eligibility requirements,” (Employee Benefit News, November 1, 2013)

Wisdom from Some of Our Favorite Blogs:
fi360: Fiduciary Links: The IPS is the crucial fiduciary document |
Pension Risk Matters: Fake Parakeets and Pension Risk Management | “Staying” Power |
The Chicago Financial Planner: ETF Price Wars: A Good Thing or Just More Hype? | Review Cause |
Frugal Fiduciary: Let’s go shopping! For a 401k plan? |
Pension Risk Matters: Pension De-Risking For ERISA Plan Sponsors |

Hot Tips from Popular Web Resources: Roth IRA Investors Favor Stocks, Balanced Funds |
NAPA Net: Not Your Parents’ Match |
NAPA Net: Retirement Income Still a Work in Progress |
NAPA Net: Education Policy Statements – The Next Evolution? |
NAPA Net: Wire Houses Navigate the ERISA Fiduciary Landscape |
NAPA Net: Borzi Declines to Reveal Release of Fiduciary Definition Rule |
NAPA Net: Time to Re-enroll Participants into Managed Investments? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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