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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 12/27/13

December 30
00:02 2013

1020805_25983300_Trending_Topics_2013.12.30_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:
Most Popular Stories in 2013 – #10 to #6,” (, December 26, 2013). For at least three of these article, you don’t only need to read them, you need to know why others are reading them.

Compliance – One step forward, two steps back:
Regulators regulate, then the market comes in and fixes it so it makes sense. That transition period can be very frustrating. There are a lot of frustrated people out there right now.
Open letter to DOL: fix fee disclosure faux pas now,” (BenefitsPro, December 23, 2013) There’s only one problem bigger than not disclosing 401k fees – that’s disclosing them incorrectly. What’s the difference between an incorrectly disclosed fee and a hidden fee? The former can actively hurt honest advisers, while the latter protects dishonest advisers. Is this what the DOL intended when it created its 401k Fee Disclosure Rule?
Puerto Rico Governor Signs Pension Reform into Law,” (PLANSPONSOR, December 26, 2013) Here’s the great thing – this is not a cold turkey kind of law. Those who’ve lived most of their life under the public pension plan will get their treasured lifetime annuity. For new folks, though, it’s the DC plan. Thus, in one fell swoop, have all the current liabilities been enumerated and the future liabilities eliminated.

Fiduciary – Talk is cheap…:
…but cheap is better than nothing at this point.
Labor secretary lobbying Congress on behalf of fiduciary-duty rule,” (InvestmentNews, December 26, 2013) It’s not clear from the article if this is a good thing or a bad thing, but, for the first time in a while, it is the Labor Secretary himself, rather than Phyllis Borzi (who’s still in the picture, but now there’s no appearance that she is acting alone), promoting the new fiduciary definition.

Fees – How could it be hidden?:
The law says it’s supposed to be disclosed, so if isn’t disclosed, then it must not be a fee, right?
One Year After New Fee Disclosure Rules,” (PLANSPONSOR, December 23, 2013) The bottom-line is that things may actually be worse than they were before the new rule. There are still hidden fees, only now no one believes they are hidden because “everything is supposed to be disclosed.” In all, it’s a sad, sad tale of a rule gone terribly wrong.

Investments – If they don’t have a choice, are you surprised what they pick?:
C’mon, man, as they are wont to say. Of course more people are picking TDFs. Do they have any other choice?
More Choose TDFs for the Long Run,” (, December 24, 2013) Look, folks, the fact is people don’t want to constantly be forced to make decisions. If they could be sold on a package of goods that is a “one-decision” darling, then they’ll buy it. It doesn’t matter if it’s an actively managed TDF or a passive managed index fund, if investors can “set it and forget it” they will. Life has too much to offer. Why risk wasting precious time on the flippancy of investments?
More 401k Participants Choosing Target Date Funds,” (PLANSPONSOR, December 24, 2013) In case you’re not tired of reading this story.

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.
Bridging the gap between 401k plan sponsors and participants,” (Employee Benefit News, December 23, 2013)
To Build the Best Plan Have the Best Choices,” (PLANSPONSOR, December, 23, 2013)
Three Things 2013 Tells Us We Must Know,” (BenefitsPro, December 26, 2013)
DOL Seeks Removal of 401k Trustee in Illinois,” (PLANSPONSOR, December 26, 2013)
5 Steps to Get Your 401k in Shape for 2014,” (, December 26, 2013)
DOL Sues to Restore Indiana ESOP Losses,” (PLANSPONSOR, December 27, 2013)
Top 5 goals for 401k plan sponsors in 2014,” (Employee Benefit News, December 27, 2013)

Wisdom from Some of Our Favorite Blogs:
fi360: Fiduciary Links: Benchmarking & Demonstrating Value Webinar Questions Answered

Hot Tips from Popular Web Resources:
NAPA Net: Ted Benna’s Perspective on De-risking and Improving DC PlansNAPA Net: Regional Bank Settles Stock Drop Case for $22.5 MillionNAPA Net: Disclosure Overload
NAPA Net: ‘Half’ Measures?NAPA Net: Judge Prohibits San Jose from Cutting Pensions of City WorkersNAPA Net: Younger Investors Targeting TDFsNAPA Net: How Can Plan Fiduciaries Discharge Duties Without Formal Training?

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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