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

March 10
01:11 2014

1020805_25983300_Trending_Topics_2014.03.10_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:
Hit, Miss or Backfire? Controversial Ayres/Curtis 401k Fee Paper Claims Broad-Based Fiduciary Breach,” (, March 4, 2014). Can a Swiss Cheese argument add any value to solving important issues that really exist?

Compliance – Bad Moon Rising:
There’s a lot of speculation going on right now about IRA Rollovers. This is bound to be one of those pushme-pullya sort of things. Of course, it’s still all speculation, so why get all hot and bothered?
Navigating 401k rollovers,” (InvestmentNews, February 28, 2014) Look for this to become a bigger issue as regulators focus in on IRA rollovers. This cuts both ways, with some less than scrupulous advisors using the IRA R/O to increase fees unnecessarily on one hand, while, on the other, 401k participants usually should get their assets out of their old company – and often prefer to work with the same people, if possible.
Checklist: Documents needed during a 401k plan audit,” (Employee Benefit Adviser, March 6, 2014) A very good checklist.

Fiduciary – It’s Everywhere! It’s Everywhere!:
We don’t need stories about it to know that the fiduciary issue permeates almost everything we talk about.

Fees – A Swing and a Miss:
It’s funny when the inept take a solid issue and simply flub it up. Well, take a whiff here.
Galvin’s scrutiny of 401k matches misfires,” (InvestmentNews, March 3, 2014) This is rich. The big bad attorney general huffs and puffs and blows down the neighbor’s house while the pigs play Parcheesi.
What are Ayres/Curtis thinking?” (BenefitsPro, March 5, 2014) More on the same topic as the lead story this week.

Investments – The Bigger they are…:
…the harder they sell. It’s funny to hear them complain, but we’ll start listening when they start turning away assets.
Can Vanguard Become Too Big?” (Financial Planning, March 1, 2014) The problem isn’t Vanguard – it’s the entire industry as written here: “3 Reasons to Outlaw Index Investing Right Now (and One Selfish Reason Not To) in 5 Acts.”
John Bogle: Indexing Has Gone Too Far,” (Financial Planning, March 1, 2014) See above.
Private equity is coming to 401k plans,” (InvestmentNews, March 2, 2014) Sure. Why not? We don’t need to worry about liquidity. We don’t need to worry about day pricing. (actually, we don’t.) We don’t need to worry about chasing investment fads. So, why not alternatives? Can they be any worse than Target Date Funds?

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.
The 4% Rule Of Dumb?” (Financial Advisor, February 27, 2014)
4% withdrawal rate in retirement unrealistic in real world, researchers say,” (InvestmentNews, February 27, 2014)
Risks lurk in annual 401k matches,” (InvestmentNews, February 28, 2014)
Stormy skies ahead: why the retirement crisis seems unfixable – and getting worse,” (BenefitsPro, February 28, 2014)
Beyond auto features: How to boost retirement plan participation,” (Employee Benefit Adviser, March 5, 2014)
Innovations in 401k plan design,” (Employee Benefit Adviser, March 6, 2014)

Wisdom from Some of Our Favorite Blogs:
fi360: Fiduciary Links: Are you ready for your first SEC exam? |
Proskauer’s ERISA Practice Center Blog: High Court Employee Benefits Cases: A Review and Look Ahead |
The Trust Advisor: Ukraine and Russia: How Worried Should Investors Be? |
ERISA Lawyer Blog: Eleventh Circuit Rules That Plantiff’s Claim Is Barred By Statute Of Limitations |
Proskauer’s ERISA Practice Center Blog: Fiduciary Breach Claims Barred by ERISA’s Six-Year Statute of Limitations |
Behavior Gap: Same Story, Different Year: The Behavior Gap Still Exists |
Fred Reish: Capturing Rollovers: A Changing Environment |
The Frugal Fiduciary: Yale law professor again hammers high fees and revenue sharing, 401k plans  |
ERISA Lawyer Blog: IRS Says It’s Not Too Late for a Tax Break – Start a SEP Retirement Plan For 2013 |
Behavior Gap: The Small, Boring Things |
Squared Away Blog: Delay Retiring: A ‘Smart’ Decision | Pet “Smart?” |
The Chicago Financial Planner: Investing: The Bull Market Turns 5 What Now? |
Retirement Plan Blog: Retirement plan beneficiary designations shouldn’t be one and done |
Scholarly Financial Planner: Will You Have Regrets? What Older Persons Can Teach Us … |

Hot Tips from Popular Web Resources:
NAPA Net: Camp’s Tax Reform Proposal Hits Retirement Savings Incentives |
NAPA Net: Graff: Camp’s Attack on Retirement Savings ‘a Mistake’ |
NAPA Net: Retirement: the New American Dream? |
NAPA Net: Expand Access, Preserve Employer Plans, ASPPA’s Judy Miller Tells Hill Subcommittee |
NAPA Net: Benartzi: MyRAs Give Participants a False Sense of Security |
NAPA Net: Advice and Trust |
NAPA Net: Schwab Willing to Lose $25 Billion in 401k Clients Over IRA Rollovers |
NAPA Net: Case Against Morgan Stanley Dismissed |
NAPA Net: Average DOL Fine Quadrupled in Last Four Years |
NAPA Net: Massachusetts Sent Lump Sum Match Inquiries to Wrong Providers |
NAPA Net: Fee Policy Statements: Upping the Ante on Fee Disclosure |
NAPA Net: DC Execs Think Revenue Sharing’s Time is Limited |
NAPA Net: Fewer Plan Participants Use Advisors |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA

1 Comment

  1. Erisa Attorney
    Erisa Attorney March 15, 04:44

    Hey Christopher , thanks for updating us about the trends impacting ERISA plan sponsors,

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