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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 2/14/14

February 18
00:07 2014

1020805_25983300_Trending_Topics_2014.02.17_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:
New Research Suggests Why It’s Hard to Sell Annuities to ERISA Plan Participants,” (, February 11, 2014). A forthcoming paper gives some hints on how to make annuities more appealing.

Compliance – A Last Word:
Chuck Jaffe speaks the truth. Apparently, some can’t handle the truth.
Why mutual funds beat Obama’s myRA plan,” (MarketWatch, February 10, 2014) Chuck Jaffe does a great job explaining the redundancy known as “MyRA” and takes a little bit of heat for it in the comments section. Isn’t politics great? If Jaffe had wrote the same thing about a ROTH IRA or a SEP-IRA he wouldn’t be getting the flack he’s getting for writing about the MyRA.

Fiduciary – The Beginning of the End:
The silence speaks volumes.

Fees – The End of the Beginning:
Nobody knows, the fees that they’ve paid. Nobody reads, their statements.

Investments – Media Enables Financial Illiteracy:
We’re sorry. But some articles just shouldn’t be written.
Target-Date Funds Greatly Lagged S&P 500 Last Year,” (Financial Advisor, February 10, 2014) And in other news, dog bites man. Of course Target Date Funds lagged the S&P 500. They’re supposed to. They have a significant bond component. It’s the same thing that supposed to protect them on the downside. (We’ll see if this theory worked when they come out with the January results.)
Scrutinizing Target-Date Funds in 401k Plans,” (ThinkAdvisor, February 10, 2014) Although they’re better than using a money market as a default, the author explains how TDFs are not all they’re made out to be. The bottom-line: As with purchasing any other product, caveat emptor.
The secret to selling more annuities,” (BenefitsPro, February 12, 2014) More on the research paper featured in the lead story this week.

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.
AOL reverses position on year-end 401k match,” (USA Today, February 9, 2014)
Distressed babies killed the 401k,” (BenefitsPro, February 10, 2014)
Supreme Court decision will affect company DC plans,” (BenefitsPro, February 10, 2014)
7 services to expect from your 401k investment adviser,” (Employee Benefit News, February 11, 2014)
Fidelity: Average 401k nearly doubles since ’09,” (USA Today, February 12, 2014)
Plan Trustees to Restore 4 Million to Illinois Plan,” (PLANSPONSOR, February 12, 2014)
Stocks lift 401k plans, but many Americans are unprepared for retirement,” (Los Angeles Times, February 13, 2014)
What If Your Company Switches to a New 401k Provider?” (MainStreet, February 13, 2014)

Wisdom from Some of Our Favorite Blogs:
fi360: Fiduciary Links: The IRA Rollover Opportunity |
The Trusted Advisor: Ten Ways You’re Probably Leaving Money on the Table |
Scholarly Financial Planner: MyRA: The Administration Answers FSI’s and SIFMA’s Whines Via Disintermediation |
Proskauer’s ERISA Practice Center Blog: Transition Relief To Employers with 50-100 Employees |
Squared Away Blog: Financial Survey: Americans Unsatisfied |
Boston ERISA Law Blog: The Fiduciary Exception to the Attorney-Client Privilege: What It Is and Why It Matters |
fi360: Is the Fiduciary Standard at a Crossroads? |
Proskauer’s ERISA Practice Center Blog: Don’t Waive Privilege: Exclude Unnecessary Service Providers From Meetings |
Behavior Gap: Risk Tolerance and The Real World |
FiduciaryPath: About Face: AOL’s 401k Match Mistake |
The Chicago Financial Planner: Retirement: Will You Outlive Your Money? | Model “Hones” |
The Chicago Financial Planner: Year-End 401k Matching – A Good Thing? |

Hot Tips from Popular Web Resources:
NAPA Net: ICI: DC Plans and IRAs Growing at Double Digit Rates |
NAPA Net: Raise the RMD Age? |
NAPA Net: AOL Alters 401k Match, Then Relents |
NAPA Net: ‘Motion’ Sensers |
NAPA Net: Why Not a MyRA? Experts Give 10 Reasons |
NAPA Net: TDFs Grew More Than 26% Last Year |
NAPA Net: Case of the Week: Amending 401k Plans for In-plan Conversions |
NAPA Net: Florida Looks to Revamp Lifetime Income Solutions |
NAPA Net: Auto-Enrollment Adoption Slowing |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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