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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/29/13

December 02
00:02 2013

1020805_25983300_Trending_Topics_2013.12.02_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:
How Should the 401k Fiduciary Address ‘Leakage’?” (, November 26, 2013). If a choice between working longer or losing your house, which would you choose?

Compliance – About that Ticking You Hear:
If you want to defuse a bomb, it’s best to know where the fuse is.
Understanding Discount Rates for Pension Obligations,” (PLANSPONSOR, November 25, 2013) This is for the inner-dweeb in all of us.

Fiduciary – The Freedom to Fail:
If you believe in liberty, if you believe in freedom, then you believe that success and failure must co-exist in the natural world. And the things that determine which side of that particular fence an individual will fall are the choices that individual makes.
These 401k ‘Benefits’ May Actually Hurt Retirement Readiness,” (BenefitsPro, November 27, 2013) How far do plan sponsors have to go before they cross the line from “fiduciary” to “paternalism”?

Fees – Victim of a Short Week:

Investments – More Square Pegs, More Round Holes:
It’s becoming more clear that investment theory is an ever-evolving SNAFU meant to cover-up past mistakes in a language only a Nobel Laureate could understand.
Using Income To Mitigate Risk In A Retirement Portfolio,” (Financial Advisor, November 20, 2013) OK, this makes some sense, but it makes even more sense to tread lightly on the thin ice of interest-rate sensitive securities. We’ve written extensively on the coming bondocalypse and that means anyone investing for income.
U.S. SEC to seek comment on ‘target date’ fund reforms,” (Reuters, November 22, 2013) Tired of trying to explain “glidepath”? Have you had it up to here with the imbedded fees inherent in funds of funds? Do you simply want to get the “date” out of target date? Now’s your chance to speak your mind.
Does Modern Portfolio Theory Still Work?” (Financial Planning, November 26, 2013) This is one of those “Yes, but…” articles. For example, “Yes, it works, but it doesn’t because of the way people behave.” – or – “Yes, it works, but we have to make some (major) tweaks to its original assumptions.” Bottom-line: It sounds like it doesn’t work.

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.
Workers Cut 401k Plans as They Fatten HSAs: Mercer,” (ThinkAdvisor, November 20, 2013)
Generational Smackdown! Who is Best at Retirement Saving?” (, November 22, 2013)
Retirement planning is now a family affair,” (InvestmentNews, November 24, 2013)
Supreme Court asked to clarify company stock issue in 401k plans,” (Pensions & Investments, November 25, 2013)
DOL seeks high court action on company stock in 401k plans,” (InvestmentNews, November 25, 2013)
Steer clear of the retirement cliff,” (Employee Benefit News, November 25, 2013)
Workers misinformed about 401k contribution limits,” (LifeHealthPro, November 25, 2013)
Record Number of Hardship Withdrawals During Shutdown,” (PLANSPONSOR, November 25, 2013)
The shape of 401k plans to come – and why they’re changing.” (Reuters, November 26, 2013)
Supermarket Chain Agrees to Restore Plan Assets,” (PLANSPONSOR, November 26, 2013)
Let’s Operate 401k Plans as True Retirement Plans,” (, November 26, 2013)
Men More Confident About Saving for Retirement,” (PLANSPONSOR, November 26, 2013)

Wisdom from Some of Our Favorite Blogs:
The Trusted Advisor: The Biggest Mistakes Trust Companies Make |
Scholarly Financial Planner: The Danger of Indifference and the Demise of the Fiduciary Standard |
MainStreet: Retirement’s Grave Danger: Outspending Resources |
fi360: Fiduciary Links: Comments Shed Light on Future SEC Action |
MainStreet: Retirement-Crushing Debt |
Boston ERISA Law Blog: Who Is the Proper Defendant In an ERISA Denial of Benefits Claim? The First Circuit Has an Answer |
The Chicago Financial Planner: A Feast of Thanksgiving Financial Links |
Fred Reish: Target Date Retirement Funds–Tips for ERISA Plan Fiduciaries |

Hot Tips from Popular Web Resources:
NAPA Net: Challenging Conventional Target Date Strategies and Passive Money Management |
NAPA Net: ‘Partial Retirement’ on the Rise |
NAPA Net: Supreme Court Likely to Rule on Stock Drop Case |
NAPA Net: Use It or Lose It |
NAPA Net: In the Future, Your IRA Will Text You |

Miss anything? Feel free to add a comment below.

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About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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