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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 7/11/14

July 14
00:01 2014

1020805_25983300_Trending_Topics_2014.07.14_stock_xchng_royalty_free_300Welcome to FiduciaryNews 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:
Facts and Fiction of Modern Retirement – What Every 401k Fiduciary Should Teach Employees,” (, July 8, 2014). The truth is, many retirees continue working, but not always for reasons you might guess. This is the first of a 4-part series that ran last week explaining why.

Compliance – Gonzo Accounting:
Sometimes we just have to sit back and laugh. It’s no use to say “we told you so” when we still have to live with the consequences of (others) being so wrong.
Fear and Loathing at PBGC,” (ThinkAdviser, July 8, 2014) How many times must it be said? A pension plan is nothing more than a glorified Ponzi Scheme. It works until the company stops working – and we all know that it’s very rare for a business to survive forever. This means those employed at dying companies are the proverbial “last men standing” in the Ponzi Pool. They’re the ones who paid into the game but won’t get what was promised. Well, the government has an answer to this. It’s called the PBGC – the Pension Benefit Guarantee Corporation – and it guarantees that these employees won’t be the last men standing, the taxpayer will. When, oh when, will some smart Congressman sponsor legislation that will outlaw pensions?
DOL investigating outsourcing of employee benefit plan services,” (Employee Benefit Adviser, July 9, 2014) See, here’s the thing about regulators. They don’t so much “regulate” an industry as they direct where lobbyist dollars are spent. The more they got going on, the more lobbyists are compelled to defend their industry. Only when the regulators’ proposals reach the beyond the capacity of lobbyists to give do we ever finally see real regulation take place. We’re not saying it’s good. We’re not saying it’s bad. We’re just saying it’s reality.

Fiduciary – Survey Says!:
Somewhere, Richard Dawson is turning over in his grave.
Do Independent Advisors Oppose Expected DOL Fiduciary Rule?” (Financial Planning, July 10, 2014) This article skewers both the questioning techniques and the analytical interpretation of a recent survey sponsored by an organization long opposed to the adoption of a universal Fiduciary Rule among all those offering investment advice. If you’ve seen a headline purporting “90% of advisors surveyed oppose the DOL’s Fiduciary Rule,” then you should definitely read this piece to get the rest of the story.

Fees – Griping Takes a Vacation:
Or at least all the gripers did.

Investments – Been There, Done That,..:
…wrote an article on it six months ago.
How to Frame Annuities More Attractively,” (Research Magazine, July 2014) We never intend to break news here at, but apparently we did on this one. This article talks about the same “new” research we wrote on in “New Research Suggests Why It’s Hard to Sell Annuities to ERISA Plan Participants,” (, February 11, 2014).
Financial Savviness Linked to Better 401k Returns,” (PLANSPONSOR, July 7, 2014) Wait, you’re telling us someone had to take a survey to find out people who know more about investments tend to get better returns than those that don’t? Kinda makes us wonder how financially savvy the ones who spent the money on this survey are.
5 things to know about the new longevity annuity rules,” (BenefitsPro, July 9, 2014) Thing #6 – by the time they begin to pay out, most people will have been dead for almost a decade.

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.
Most Roth IRAs Born Through Contributions, Not Rollovers,” (ThinkAdviser, July 1, 2014)
What happens when 401k plans replace pensions?” (BenefitsPro, July 2, 2014)
Responding to Lagging 401k Participant Engagement,” (PLANSPONSOR, July 7, 2014)
Social Security: Housing and Retirement,” (Financial Planning, July 7, 2014)
Cost-benefit of retirement plans split between age groups,” (Employee Benefit News, July 7, 2014)
When Should You Begin Collecting Social Security?” (MainStreet, July 7, 2014)
Pitfalls of Paying for Adult Children: Tuesday’s Retirement Scam,” (Financial Planning, July 7, 2014)
How to leverage ESOP uptick, despite increased scrutiny,” (Employee Benefit Adviser, July 8, 2014)
Live Like a Millennial Now to Retire with Half a Million,” (MainStreet, July 8, 2014)
Fees of Alternatives Still an Issue, Advisors Say,” (, July 8, 2014)
Ameriprise ordered to deliver Columbia funds chief’s journals to ex-staff,” (InvestmentNews, July 9, 2014)
Entering a new era of active retirement,” (BenefitsPro, July 9, 2014)
3 Smart Fixes for Social Security and Medicare,” (Financial Planning, July 10, 2014)
Roth Accounts Can Improve Retirement Outcomes,” (PLANSPONSOR, July 10, 2014)
Retirement Vision 2020 Prescribes Successful Savings Strategies to Drive Better Outcomes,” (Employee Benefit News, July 10, 2014)
Portfolio Analysis: An $89,000 Retirement Plan Needs a Remodel,” (US News, July 11, 2014)
6 Ways Retirees Fool Themselves: Friday’s Retirement Scan,” (Financial Planning, July 11, 2014)
It’s clean up season for retirement plans,” (Employee Benefit News, July 11, 2014)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: ERISA Advisory Council Investigating Fiduciary Management |
Boston ERISA Law Blog: What Should Employees Do in Response to Fifth Third Bancorp? |
Scholarly Financial Planner: Apply the Fiduciary Standard to Reduce the Number of Regulations, the Size of Government, and the Need for Wall Street Oversight |
Behavior Gap Newsletter: What Will You Do To Avoid Thinking? | Map “Quests” |
The Retirement Plan Blog: What’s a fiduciary to do? |
The Chicago Financial Planner: Family Financial Conversations |
Frugal Fiduciary: GAO suggests changes to the Form 5500 for clarity and consistency |

Hot Tips from Popular Web Resources:
NAPA Net: Recordkeeper Consolidation Would Not Mean Falling Skies |
NAPA Net: Wanted: A New Compensation Model |
NAPA Net: ‘Out’ Takes |
NAPA Net: Final Word on Fifth Third Decision |
NAPA Net: Nine out of 10 Advisors Oppose Fiduciary Rule |
NAPA Net: Percentage Versus Dollar Fee Structure |
NAPA Net: ERISA Advisory Council to Examine Plan Participation |
NAPA Net: SEC’s White Provides Update on TDF Disclosure Comments |
NAPA Net: Retirement in the 21st Century |
NAPA Net: Cash Balance Plans Claiming Larger Slice of Retirement Pie |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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