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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 12/20/13

December 23
00:01 2013

1020805_25983300_Trending_Topics_2013.12.23_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:
Exclusive Interview: Omnipresent Marcia Wagner on All Things ERISA,” (, December 17, 2013). “I see the greatest exposure in not being clear as to what the fees are and what they are for.”

Compliance – Better Late than Never:
Sure, now they think about it? So who do we send the bill to for the cost of prior mismanagement?
Pension Woes Have Cities, States Eyeing 401k Style Plans,” (Fox Business, December 19, 2013) While this is definitely a trend, do not expect public pensions to go as quietly into the night as they should. Unlike private company pensions, which for the most part went the way of the dinosaur in the 1980s, public pension are not merely a business decision, but a political decision as well. In other words, it’s all about who gets to control the money. In this case, it pits the individual workers against the behemoth public employee unions and their political operatives.

Fiduciary – But will they listen?:
The professionals have an oracle. He resides in Omaha. The mass media have their own oracle. He lives in Valley Forge. The latter appears to be taking a strong stand in favor of a uniform fiduciary standard. That and a couple of bucks will get a cup of coffee.
Bogle: Apply fiduciary duty to anyone ‘touching other people’s money’,” (InvestmentNews, December 10, 2013) Forget Bogle, this article does a great job as an anatomy of what went wrong on the way to a Uniform Fiduciary Standard. It looks like Rhoades is right.

Fees – In this case, We know they’re not listening:
Despite academic research supporting the idea that disclosure just plain doesn’t work, regulators continue to rely on it. Here’s an idea. Forget disclosure. Use sledgehammers.
Workers pay little attention to 401k fee disclosures,” (InvestmentNews, December 12, 2013) The headline doesn’t offer anything surprising, but something inside the article does. According to a survey cited in the story, 40% of 401K participants still think their 401k is free. Not exactly a ringing endorsement of the effectiveness of the new Fee Disclosure Rule. Or is it a statement about disclosure in general?

Investments – Will Supreme Court Nix Company Stock in Retirement Plans?:
This could be good (for a pure textbook standpoint) or it could be bad (if someone stretches it beyond its usefulness).
SCOTUS Takes Up Presumption of Prudence Issue,” (PLANSPONSOR, December 16, 2013) Take a look at this one carefully. It is the potential to change more than a century of thinking when it comes to prudence and investing – the very heart of what a fiduciary must consider.

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.
Senators Say Retirement Planning Is a Growing Priority,” (ThinkAdvisor, December 11, 2013)
Supreme Court Will Hear 401k Appeal Case,” (Wall Street Journal, December 13, 2013)
Americans Need To Save More For Travel In Retirement,” (Financial Advisor, December 16, 2013)
9 year-end compliance deadlines for retirement plan sponsors,” (Employee Benefit News, December 17, 2013)
Top 5 401k plan trends for 2014,” (Employee Benefit News, December 17, 2013)
‘Don’t Retire’ May Be Good Advice,” (Financial Advisor, December 17, 2013)
Watchdog: More Payout Options Needed for 401k Plans,” (Wall Street Journal, December 17, 2013)
Lockheed Martin 401k case to proceed as class action,” (InvestmentNews, December 17, 2013)
Early Retirees May Not Have To Wait To Take Social Security,” (Financial Advisor, December 18, 2013)
Small can be big in 401k plans,” (InvestmentNews, December 18, 2013)
Frozen 401k contributions might have silver lining,” (BenefitsPro, December 19, 2013)
Regions Financial settles 401k case for $22.5 million,” (Reuters, December 19, 2013)
3 Ghosts of Retirement Planning,” (, December 19, 2013)

Wisdom from Some of Our Favorite Blogs:
Proskauer’s ERISA Practice Center Blog: Sixth Circuit Expands Availability of Remedies Under ERISA |
Proskauer’s ERISA Practice Center Blog: USSC to Consider Presumption of Prudence in Employer Stock Litigation |
The Trust Advisor Blog: Your Heirs Want This Even More Than Your Money |
The Trust Advisor Blog: It’s the Season to Immunize Benefit Plans Against DOL Auditors |
Boston ERISA Law Blog: Thoughts on Heimeshoff v. Hartford Life & Accident Insurance |
Proskauer’s ERISA Practice Center Blog: Supreme Court Affirms Enforceability of Plan Limitations Provision |
fi360: Fiduciary Links: Florida Court Rejects SEC Position on Broker’s Lunar Cycle Investment Advice |
Proskauer’s ERISA Practice Center Blog: IRS Provides New Guidance on In-Plan Roth Rollovers |
The Chicago Financial Planner: What if My Company’s 401k Plan is Lousy? |
Frugal Fiduciary: Retirement Readiness? Even with a great 401k it’s hard work |
fi360: Practice 1.3: Roles & Responsibilities of all Involved Parties are Defined & Documented |
The Chicago Financial Planner: Meaningful Family Conversations for the Holidays | “Believe” Able |
Pension Risk Matters: Muni Bonds, Pensions and Financial Disclosures: Compliance, Litigation and Regulatory Trends |

Hot Tips from Popular Web Resources:
NAPA Net: Supreme Court to Hear Stock Drop Case |
NAPA Net: DOL’s Fiduciary Definition Rule Delayed Again, Until August 2014 |
NAPA Net: Appeal of Detroit Bankruptcy Expedited |
NAPA Net: ‘Keep’ Sakes |
NAPA Net: More HR Pros Reaching out to Advisors for Help |
NAPA Net: Supreme Court Declines to Review Lockheed Stable Value Case |
NAPA Net: 10 Steps DC Plan Sponsors Should Take in 2014 |
NAPA Net: Senate Hearing Focuses on Retirement Income |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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