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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 10/31/14

November 03
00:14 2014

1020805_25983300_Trending_Topics_2014.11.03_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:
401k Plan Sponsors Not Only Ones Affected by “Adviser”/“Advisor” Fiduciary Confusion,” (, October 28, 2014). How can we expect 401k plan sponsors to understand the difference when financial service professionals can’t.

Compliance – Reading the Tea Leaves:
They’ll be a lot more to talk about once the election dust settles, but here are some hints.
Experts debate 40 years of ERISA successes and pitfalls,” (Employee Benefit News, October 27, 2014) In case you missed the news in September.
Pension Consultants Who Recommend Selves as Money Managers Could Be Violating Law,” (Wall Street Journal, October 28, 2014) Ya think? The better ones stopped doing this years ago.
Washington Watchers See Big Retirement Push in 2015,” (ThinkAdvisor, October 28, 2014) Let’s talk more after the elections…
Stockton bankruptcy plan protects employee pension rights,” (Employee Benefit News, October 31, 2014) Don’t misread this. The judge merely said it was OK to leave the pension intact. He didn’t reverse the earlier ruling that permitted the city to break its pension contract. The judge did note, however, that the employees had already given up their retirement health care benefits in exchange for leaving the pension alone.

Fiduciary – “You Say Toe-mae-Toe, I Say Toe-mah-Toe,..” Part II:
Last week was just a taste. Here’s the rest of the story.
For want of a vowel, the fiduciary was lost,” (BenefitsPro, October 29, 2014) You won’t believe what the New York Times does.

Fees – The Madness of Crowds and Fees:
It’s not that some fees are problematic, it’s just that all fees aren’t problematic. Some of those fees go to add value. That’s all the DOL is concerned about – adding value. Opportunists use the “high fee” mantra to confuse and addle unsuspecting investors to promote their own products. Is that honorable?
Have we done retirement plan participants a disservice?” (Employee Benefit Adviser, October 28, 2014) The author makes a great point. If we want participants to focus on savings, we need to change the focus of our reporting. They don’t read the fee disclosures, anyway, so why are we shoving it in their face? They’d be better served if we shove their savings rate in their face.
John Bogle on why your retirement plan stinks,” (MarketWatch, October 31, 2014) We cringe every time Bogle opens his mouth on this subject. On one hand, and in general, he’s right. On the other hand, when he’s not diluting his message by promoting his product, he’s using really bad statistics that sound more like he’s selling index funds instead of showing investors how to avoid high fees. Oh, wait. He is. Nevermind.

Investments – “The Better is the Enemy of the Good”:
In the end, as we all learned from that famous 2012 Wharton study, the ideal asset allocation offers very little real value compared to the average asset allocation. Stop worrying about investments. Retirement savers need to take control of the things they can control.
Asset Allocation For Retirement,” (Forbes, October 24, 2014) Wow, is this a lame article. Is Forbes that desperate for contributors? If so, they should contact us right away.
Don’t let the next downturn undermine your retirement,” (MarketWatch, October 28, 2014) More of the usual stuff if you’re a pro, the basic stuff if you’re not.
New rules for annuities and target date funds inspire products race,” (InvestmentNews, October 30, 2014) That headline says it all. And you thought it was all about the investments…

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.
New Survey: Americans OK With Tax Hikes To Protect Social Security,” (Forbes, October 24, 2014)
What older workers can and can’t do with their 401k plans,” (MarketWatch, October 24, 2014)
401k investors are ‘so dumb’: Pro,” (CNBC, October 24, 2014)
Millennials Feel Guilty About This Common Financial Decision—But They Shouldn’t,” (Money, October 27, 2014)
Half of Americans aren’t in a retirement plan,” (CBS News, October 27, 2014)
Debt or Death? Some Would Rather Die Than Run Out of Retirement Money,” (Fox Business, October 28, 2014)
Two Jobs, Two Retirement Plans,” (Forbes, October 28, 2014)
One of the Most Important Retirement Decisions You Need to Make,” (Money, October 28, 2014)
Retirement: Some struggle with leaving their jobs,” (USA Today, October 28, 2014)
Easy steps to communicate complex retirement subject matter,” (Employee Benefit Adviser, October 29, 2014)
401k participation up, retirement health care savings still fall short,” (Employee Benefit News, October 29, 2014)
It’s the perfect time for a Roth conversion,” (MarketWatch, October 29, 2014)
How much should a young worker save for retirement?” (CNN, October 29, 2014)
How to spend your money in retirement the intelligent way,” (CBS News, October 30, 2014)
3 Reasons to Wait Until Retirement for a Roth IRA Conversion,” (ThinkAdvisor, October 30, 2014)
The underserved market in retirement advising,” (Employee Benefit Adviser, October 31, 2014)
Investing: A tale of how two men saved for retirement,” (USA Today, October 31, 2014)
3 Signs You Have a ‘Zombie’ 401k,” (US News, October 31, 2014)

Wisdom from Some of Our Favorite Blogs:
The Chicago Financial Planner: Retirement Plan Contribution Limits for 2015 |
ERISA Lawyer Blog: Fourth Circuit Rules That, Since Defendants Were Not Acting As Fiduciaries When Allegedly Engaging In Wrongful Conduct, The Claim Against Them Under ERISA For Breach Of Fiduciary Duty Fails |
Pension Risk Matters: Pension Risk Matters Cited As Newsletter That 401k Advisors Should Read |
ERISA Lawyer Blog: IRS Allows Qualified Defined Contribution Plans To Offer Lifetime Income Through Target Date Funds |
Frugal Fiduciary: Small business owners are redefining the market for 401k plans – Choice |
The Chicago Financial Planner: Should You Accept a Pension Buyout Offer? |
Squared Away Blog: Strange Influences on Financial Decisions |
Scholarly Financial Planner: I Am a (Fiduciary) Zealot, for I BELIEVE |
ERISA Lawyer Blog: IRS Reminds Us That, For Certain Plans, An Application For An Updated Determination Letter Must Be Filed By January 31, 2015 |
Boston ERISA Law Blog: Clearing Out the Attic of My Mind: Notes From ACI’s 8th National Forum on ERISA Litigation |
Proskauer’s ERISA Practice Center Blog: IRS Increases Maximum Employee Contribution to Health Care FSAs for 2015 |

Hot Tips from Popular Web Resources:
NAPA Net: ‘Necessity’ is an Often Overlooked Factor in Plan Reviews |
Motley Fool: 401k News: Contribution Limits Will Increase for 2015 |
NAPA Net: Plan Turnover Expected to Rocket to 11%; Indexing Continues |
NAPA Net: Room to Grow? |
NAPA Net: GAO Updates and Reissues IRA Report |
Motley Fool: 1 Dividend Stock for Retirees to Buy |
Kiplinger: Things You Didn’t Know About Saving for Retirement |
NAPA Net: Pension Income Rises Despite DB-to-DC Shift |
NAPA Net: Case of the Week: Eligibility to Make Designated Roth Contributions |
NAPA Net: Developing a Fiduciary Training Program |
NAPA Net: PBGC Premiums ‘Pop’ |
NAPA Net: Investors in the Dark About Investment Fees |
NAPA Net: ‘4-Part Harmonization’ on Rollovers |
Morningstar: The Myth of the Dumb 401k Investor |
NAPA Net: Judge OKs Stockton’s Pension Deal, Bankruptcy Exit |
NAPA Net: Excuses, Excuses: Unbelievable Reasons for Missing Work |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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