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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 2/7/14

February 10
00:03 2014

1020805_25983300_Trending_Topics_2014.02.10_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:
Part I: Finance Industry Pros: MyRA Misses The Point,” (, February 4, 2014). Right problem, wrong solution. “Part II: Ten Reasons Retirement Experts Want You to Say “No” to MyRA,” (, February 5, 2014). Ten reasons and the ten most feared words.

Compliance – The Beast Rears Its Head:
Before the DOL takes offense at the term “Beast,” we remind them it’s just an expression. We did have the courtesy to leave the “ugly” modifier usually found in front of the word head. Suffice it to say, plan sponsors ought to be prepared.
Detroit sues retirement funds to void pension debt,” (The Washington Post, January 31, 2014) This involves some allegedly illegal activities by the unions that directly precipitated the municipal bankruptcy.
Retirement plan sponsors need to up their compliance game,” (BenefitsPro, February 3, 2014) Here’s the bottom-line. Plan sponsors needs to stop relying on current service providers (primarily recordkeepers) to do compliance audits on the plan. Instead, they should conduct them internally with an independent fiduciary.
DOL retirement plan non-compliance fines up 33 percent,” (BenefitsPro, February 4, 2014) The most common problem is failure to remit funds in a timely manner.
DOL Cracking Down on Unremitted Contributions,” (PLANSPONSOR, February 6, 2014) Watch out! This is a really bad mistake for plan sponsors to make.

Fiduciary – The Magic of Gridlock:
Sometimes, no law is better than any law. So may it be with the SEC’s proposal regarding its fiduciary standard.
Wearing Two Hats Triggers Compliance Headaches for Advisers,” (, January 30, 2014) Here’s an insiders view of the problem every consumer needs to be made aware of.
Will SEC Spend 5 More Years Mulling Fiduciary Rule?” (ThinkAdvisor, February 3, 2014) While the article doesn’t state this, some think the political clock will run out before the SEC finalizes their rule. What the article does say is that the SEC expects the DOL to finalize their rule prior to the SEC announcing anything. In the piece, Knut Rostad reiterates his question as to whether anything the SEC does will be in the best interest of investors.
Advocate says no SEC action may be preferable on fiduciary duty,” (InvestmentNews, February 4, 2014) This feeling reflects a growing consensus of fiduciary advocates.

Fees – Nobody Must be Reading The Articles:
Having once ruled the printing presses across the land, what else could explain why there has been such a dearth of stories on this subject?

Investments – Two Out of Three Ain’t Bad:
Most stories on investments merely repeat the same tired tripe of useless verbiage. This week we have three stories. Two of them are really good.
Gundlach Says Betting Against Treasuries A Fool’s Game,” (Financial Advisor, February 3, 2014) Well, that’s one man’s opinion. The odd thing about bonds, though, is that their valuations are purely mathematical. The only guessing game is with interest rates, specifically, the direction they’re headed. Even a fool knows the direction interest rates are headed.
Thinking Small About Plan Design,” (PLANSPONSOR, February 4, 2014) Keep it small. Keep it simple.
For Some Active Funds, Luck Has Nothing to Do With It,” (, February 4, 2014) A very compelling article that actually agrees more closely with academic studies (i.e., those on the behavioral finance side) than it gives itself credit for.

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.
Finke: What Makes a Successful Retirement?” (ThinkAdvisor, January 27, 2014)
Just 23% of Gen Xers Plan Retirement With Advisors: Study,” (ThinkAdvisor, January 30, 2014)
Top 10 IRA Rollover Destinations,” (ThinkAdvisor, January 31, 2014)
You can thank or blame this man for writing the 401k law,” (Employee Benefit Adviser, February 3, 2014)
You can thank or blame Richard Stanger for writing 401k,” (InvestmentNews, February 3, 2014)
You Can Thank or Blame Richard Stanger for Writing 401k,” (Bloomberg, February 3, 2014)
SEC, DOL Enforcement: Camelot Manager Charged With Stealing $9M From Clients,” (ThinkAdvisor, February 3, 2014)
MyRA won’t close the nest egg gap. Maybe the states can,” (Reuters, February 4, 2014)
Largest retirement funds rose 10.79 percent in 2013,” (BenefitsPro, February 4, 2014)
AOL is leading the way to make 401k plans worse for everyone,” (Washington Post, February 4, 2014)
Vanguard reports record 401k balances,” (BenefitsPro, February 5, 2014)
DOL Sues Contractors over Prohibited Loans Investments,” (PLANSPONSOR, February 6, 2014)
How to Make a ‘Fit’ Retirement Plan,” (, February 6, 2014)
AOL blames ACA for plan to reduce retirement benefits,” (Employee Benefit Adviser, February 7, 2014)

Wisdom from Some of Our Favorite Blogs:
The Trusted Advisor: Millennials Have Little Tolerance For Stocks, Risk |
fi360: Fiduciary Links: The IRA Rollover Opportunity |
Fred Reish: Investment Policy Statement: Friend or Enemy |
Frugal Fiduciary: Small Business 401k Plans, Bipartisan Effort & MEP’s |
Squared Away Blog: Retirement Tax Credit for Low Earners |
The Chicago Financial Planner: Target Date Funds: Does the Glide Path Matter? |

Hot Tips from Popular Web Resources:
NAPA Net: Index Funds Set Record as Passive Beats Active |
NAPA Net: The Spies of the DC Market |
NAPA Net: Case of the Week: Little Known Correction Exception for Missed 401k Deferrals |
NAPA Net: 401k Features Build Assets, But Can Do More |
NAPA Net: Bonds: Fiduciary Concerns? |
NAPA Net: State Protection for Pensions Varied, But Widespread |
NAPA Net: Harkin Bill Would Define Rollover Advice as ERISA Fiduciary Function |
NAPA Net: Multiple IRAs + Multiple Rollovers = Taxes |
NAPA Net: ‘Left’ Overs | : “Common” Sense? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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