What do you think of our site upgrade?
Hosting an industry conference? Ask us about including it in this ticker?

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 8/22/14

August 25
00:34 2014

1020805_25983300_Trending_Topics_2014.08.25_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:
Exclusive Interview (Part I): Phil Chiricotti to Retirement Industry: Outsource Fiduciary and combine with HSA or Die!” (, August 19, 2014). Industry veteran identifies the most critical issue facing employers today and plan sponsors’ job #1.

Compliance – Keep Your Eyes on the Road and Your Hands on the Wheel…:
We saw a two-pronged attack last week – one telling it like it is regarding pension plans and the other telling it like it is on a popular, but potentially dangerous practice.
Detroit bankruptcy reveals 401k  plans’ virtues,” (USA Today, August 18, 2014) The author tells it like it is, and this is what it is: If you think this is bad, imagine the government controlling your retirement plan? Maybe you don’t have to imagine. Think Social Security.
Borzi: 401k Brokerage Windows May Need Regulation,” (ThinkAdvisor, August 21, 2014) This shouldn’t come as a surprise to regular readers given we published the following story last year: “Is the Fiduciary Liability of Self-Directed Brokerage Options Too Great for 401k Plan Sponsors?” (, June 11, 2013).
DOL updates missing participant guidance,” (Employee Benefit News, August 21, 2014) Here’s what to do if you’re terminating your plan.
Delaware becomes first state to enact digital assets law,” (InvestmentNews, August 22, 2014) Yes, but only if you are a fiduciary.

Fiduciary – The Future is Now:
An industry prognosticator pronounces his prognostication: Get fiduciary or get out!
3 services all future advisors must provide,” (BenefitsPro, August 20, 2014) Is it any surprise two out of three of these are fiduciary related?

Fees – Media Plays Worlds Smallest Violin While Legal Eagles Get Results:
A “high” fee can’t be measures by a number, it can only be measured within the context of its service. And in a few years, you’ll probably be able to take that to the bank.
It Pays to Fight High 401k Fees: Lawsuits Result in $12 Million Settlement,” (MainStreet, August 18, 2014) A main street (no pun intended) overview of what the 401k “fee crisis” looks like.
Creative Ways to Cut Your 401k Fees,” (Forbes, August 20, 2014) Looks like the Forbes editors must have been on vacation when this headline was submitted. The article is really an investing article disguised as a story about fees. It makes the naïve mistake of assuming mutual fund expense ratios are fees (they aren’t, they’re part of the fund’s investment performance). As a result, unwitting readers will perhaps switch to inappropriate mutual funds thinking they’re cutting their 401k fees when those fees will remain exactly as they are now.

Investments – Lots of Noise, Very Little Substance:
Funny how all this investment talk really sells. Unfortunately, it also never really says anything. But keeping reading. One of these days you may just discover the secret to turning lead into gold.
Do Retirees Take Too Much or Too Little Risk With Their Investments?” (Wall Street Journal, August 15, 2014) As you would expect this multi-author piece has exactly what you believe – somewhere within the lengthy text. It also has exactly what the guy who disagrees with you believes, too.
‘Persistence’ angle adds to active-passive fund debate,” (MarketWatch, August 15, 2014) A good read and informative, too.
There’s a little-known investment option in your 401k plan,” (CNBC, August 18, 2014) Given the fiduciary issues – and the consequent regulatory attention these options have garnered recently – it’s probably a good thing “brokerage windows” remain little-known.
Here’s How to Protect Your 401k from the Next Big Market Drop,” (CNN, August 19, 2014) Here’s an example of why and how the mass media misdirects retirement investors by focusing on the wrong thing.
When History And Asset Allocation Collide,” (Financial Advisor, August 20, 2014) This is a long but interesting article, chock full of graphs and charts. The premise is “the 4% withdrawal rule won’t work.” All those graphs and charts purport to support the premise. However, and we can now reveal (i.e., that has super-secret vaults), that data buried deep within’s super-secret vaults shows, using the same Ibbotson data employed by this article, 100% stock portfolios have the highest likelihood of meeting the 4% Goal-Oriented Target (98.31%) than any other allocation. While nobody’s perfect, 98.31% isn’t something to scoff at.
Covered Calls for Additional Retirement Income?” (On Wall Street, August 20, 2014) Seriously? Covered calls for retirement accounts? Maybe Robert Shiller is right. Maybe we are at a market top.
6 things you should know about rebalancing,” (MarketWatch, August 20, 2014) Or at least on man’s opinion.
Why employees need 401k investment advice,” (Employee Benefit Adviser, August 21, 2014) More on the story that most people spend more time planning on how to buy a new car than on planning for their retirement.

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.
How to Overcome Behavioral Biases, Raise Retirement Savings: Cerulli,” (ThinkAdvisor, August 15, 2014)
The Basis for Your Social Security Tax,” (Wall Street Journal, August 16, 2014)
A third of people have nothing saved for retirement,” (USA Today, August 18, 2014)
The tricky business of finding a 401k advisor,” (BenefitsPro, August 18, 2014)
Gen X Retirement Worse Than Boomers’? Check Your Math, Says EBRI,” (ThinkAdvisor, August 18, 2014)
Employees shy away from personalized 401k advice,” (InvestmentNews, August 19, 2014)
Why a Mini-Retirement May Rejuvenate Your Career,” (Yahoo Finance, August 19, 2014)
Forced To Quit Working, Clients Turn To Advisors For Help,” (Financial Advisor, August 20, 2014)
The retirement readiness battle: Baby boomers vs. Gen X,” (Employee Benefit News, August 20, 2014)
The quest for the ultimate 401k,” (BenefitsPro, August 20, 2014)
Retirement Advice: Getting Better, But Still Deficient,” (Forbes, August 20, 2014)
Get These 4 Big Things Right to Retire in Comfort,” (Money, August 20, 2014)
The Key to 401k Success That 1/3 of Americans Never Do,” (Daily Finance, August 20, 2014)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: Brown M&Ms and Investment Service Provider Due Diligence |
Proskauer’s ERISA Practice Center Blog: District Court Allows ERISA Section 510 Retaliation Claim to Proceed |
The Trust Advisor: Your 401k Is Healthy. So Maybe You Are, Too |
Behavior Gap: Bored With Your Investments? Surprise! You Should Be |
Squared Away Blog: Retirees Live on Less |
Proskauer’s ERISA Practice Center Blog: Divided Fourth Circuit Panel Rules On Burden of Proving Loss Causation in ERISA Fiduciary Breach Case |
Fred Reish: Providing Compliant Services |
ERISA Lawyer Blog: Sixth Circuit Rules That An Employer Cannot Bring Suit Against Trustees Of A Multiemployer Plan For Negligent Management |
The Chicago Financial Planner: Pension Payments – Annuity or Lump-Sum? |
The Frugal Fiduciary: Former DOL Deputy Director declares scandal in IRA rollovers |
ERISA Lawyer Blog: Fourth Circuit Expresses Its View On Assessing Liability For Breach Of Duty Of Prudence When Liquidating A Plan Investment |
Behavior Gap Newsletter: Acting Like We Live in a Casino |
Proskauer’s ERISA Practice Center Blog: New Guidance on Locating Missing Participants for Terminated Defined Contribution Plans |
Pension Risk Matters: U.S. Supreme Court and Tibble v Edison International |
The Trust Advisor: Estate Planning Mistakes Every Boomer Should Avoid |

Hot Tips from Popular Web Resources:
NAPA Net: Shoulda, Coulda, Woulda: 4th Circuit Adds a New Fiduciary Twist |
NAPA Net: Schlichter’s Retirement Crisis: ‘401k Industry Complex’ |
NAPA Net: DOL Updates Missing Participant Guidance |
NAPA Net: More Bad News for State and Municipal Pension Plans |
NAPA Net: When You Assume… |
NAPA Net: Washington Supremes Back Pension Cuts |
Morningstar: An Overlooked Vehicle for Retirement Savings |
NAPA Net: DOL Opens RFI Window on Brokerage Windows |
NAPA Net: Should Fiduciary Advisors Accept Commissions? |
NAPA Net: Lack of Understanding Holding Back Plan Participation |
NAPA Net: Do We Need a Retirement ‘Check Engine’ Light? |
NAPA Net: ERISA Advisory Council Probes Retirement Plan Outsourcing |
NAPA Net: Case of the Week: Update on MyRAs |
NAPA Net: Forbes Provides a Primer on Whether to Sue your 401k Plan |
NAPA Net: Advisors Trump Online Advice, Friends and Family |
NAPA Net: Oregon’s Auto IRA Mandate Takes Shape |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Only registered users can comment. Login is sponsored by…

Order Your From Cradle to Retirement book today!

Vote in our Poll


The materials at this web site are maintained for the sole purpose of providing general information about fiduciary law, tax accounting and investments and do not under any circumstances constitute legal, accounting or investment advice. You should not act or refrain from acting based on these materials without first obtaining the advice of an appropriate professional. Please carefully read the terms and conditions for using this site. This website contains links to third-party websites. We are not responsible for, and make no representations or endorsements with respect to, third-party websites, or with respect to any information, products or services that may be provided by or through such websites.