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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 3/7/14

March 17
00:14 2014

1020805_25983300_Trending_Topics_2014.03.17_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:
These 7 Articles Help 401k Plan Sponsors Apply Fiduciary Principles to Build a 21st Century Plan,” (, March 11, 2014). Do you think the nature of those interests have changed since the plan was originally created? Has plan design changed accordingly?

Compliance – Yes, but…:
There’s troubles in Smallville, and many other villes that have relied on public employee pensions for far too long.
San Jose City Hall, police struggle for pension compromise,” (BenefitsPro, March 13, 2014) This just goes to show you. Even though you have the problem pegged, the solution is the real challenge. This isn’t limited to San Jose, either. The same issues are coming up in Detroit.

Fiduciary – SEC  Zigs While DOL Zags:
If there’s ever been a pushme-pullya in the government bureaucracy, this is it.
Dual Registrants, Alternative Funds Top SEC s Concerns,” (Financial Planning, March 6, 2014) It’s the first element here that introduces our fiduciary issue. And if you’re wondering why, look at the article below.
Conflict Disclosure: SEC Warns of Top Issues,” (Financial Planning, March 11, 2014) Here’s the reason why dual registration is getting a close look at by the SEC.
SEC to Intensify Uniform Fiduciary Consideration, Accelerate Harmonization,” (Financial Planning, March 11, 2014)
A fiduciary standard? Don’t hold your breath,” (, March 12, 2014) This won’t surprise some people.
SEC’s Gallagher: Fiduciary Rule Likely Not Coming,” (InvestmentNews, March 12, 2014) Not to worry, though. While the SEC twiddles its thumbs, it appears the DOL has the green light to move ahead.
U.S. Labor Department offers glimpse into new fiduciary plan,” (Reuters, March 12, 2014) Can it be true? Is the DOL going to focus on conflicts-of-interest as promised?
Educating vs. Advising? Tough Questions for DOL Fiduciary Proposal,” (Financial Planning, March 12, 2014) Education has long been, when legitimately used, a safe harbor against unintentionally falling into the realm of RIA regs. Could it be the next gray area to be compromised?

Fees – We Don’t Need No Stinkin’ Treasure Map:
We don’t know why the DOL insists on killing trees, but it does. Why can’t it just say all fee disclosures must be plan specific and appear on one piece of paper” Oh well, maybe the third time will be the charm.
DOL asks for comments on 401k fee disclosure guide,” (Employee Benefit Adviser, March 11, 2014) The DOL is taking another swing at this. For some reason, it’s avoiding the easiest solution: put everything on a single page. Instead, they’ve proposed all service providers who don’t provide a single page solution must produce a treasure map showing fiduciaries how to find the fees. Yes, this treasure map will include what pages to look at to find the fees and other fun activities for those plan sponsors with too much time on their hands.
Streamlined Fee Data May Have a Hitch,” (PLANSPONSOR, March 12, 2014) Um,… about that new DOL 401k fee disclosure guide. That may actually make life difficult for some plan sponsors. This article explains why.

Investments – KISS:
As product salesmen try to make things more complicated, academics are finding 401k participants respond better when things are kept simpler.
How to help 401k plan participants deal constructively with their investment worries,” (Employee Benefit News, March 11, 2014) Unfortunately, the title is longer than the article. The piece contains a few concepts, but not many specifics.
Half of 401k participants own target-date options, Vanguard says,” (Employee Benefit News, March 11, 2014) The only surprise here is that the number is not bigger. Kudos to the industry marketing pros. And an honest “good luck” to those investors who bought the snake oil.
Time to clean out the attic of your 401k?” (BenefitsPro, March 13, 2014) Is your 401k still wearing the fashions of the last century? Update it to the new millennium now by reading the 7 articles referenced in this piece.

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.
SEP: The procrastinator’s pension plan,” (Employee Benefit Adviser, March 11, 2014)
Schlichter in new 401k lawsuit, this one against health care provider Novant Health,” (InvestmentNews, March 12, 2014)
Prioritizing Retirement Tradeoffs,” (, March 12, 2014)
Employer 401k matching gets passing grade,” (Employee Benefit Adviser, March 12, 2014)
Employees take legal action against their company’s 401k,” (InvestmentNews, March 12, 2014)
5 Tips to Prepare For Retirement,” (US News, March 13, 2014)
Nifty Fifties,” (, March 14, 2014)

Wisdom from Some of Our Favorite Blogs:
The Trust Advisor: How Safe Are Your Investments, Really? |
fi360: Fiduciary Links: The Growing Business of Banks and Advisory Services |
Proskauer’s ERISA Practice Center Blog: ERISA Plan Fiduciaries—Are Your Conversations With Counsel Privileged? |
ERISA Lawyer Blog: IRS Offers Guidance On Fixing A SEP When Employees Of A Related Business Have Been Improperly Excluded |
Behavior Gap: Avoiding ‘Lucky Fool Syndrome’ |
Scholarly Financial Planner: Does SEC Chair Mary Jo White Possess Courage? Do We? |
ERISA Lawyer Blog: Fifth Circuit Rules That Investment Advisor, Who Allegedly Made Misrepresentations About A Proposed Investment, Is Not An ERISA Fiduciary And Thus Is Not Liable For the Statements |
Behavior Gap Newsletter: Practice Isn’t Always Enough  |
Retirement Plan Blog: The Retirement Income Crisis as an Infographic | “Background” Check |
The Chicago Financial Planner: Your 401k is not Free |

Hot Tips from Popular Web Resources:
NAPA Net: IRA Rollovers Under Greater Scrutiny |
NAPA Net: Public Pensions: Brace Yourself, Says Buffett |
NAPA Net: ‘Guide’ Must Accompany 408(b)(2) Disclosures, DOL Proposes |
NAPA Net: IRI Research Shows Damage That Fiduciary Rule Could Cause |
NAPA Net: Senate Witnesses Agree on the Need to Save, But Little Else |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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