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Top Ten 2014 Stories

December 23
00:03 2014

Have you ever wondered what it would be like to travel in time? While it may stretch some of Einstein’s rules to go forward, it’s not that hard to go back in time. One might even make the case it’s more valuable to go backward than 18608_1894_man_reading_stock_xchng_royalty_free_300take a peek into the future. Why? Well, have you ever read a book by starting with the last chapter? How does that feel? It makes it a lot harder (and infinitely more boring) to then start from chapter one.

So knowing how the story ends spoils the journey of advancing day to day. Going back in time, however, permits reflection, encourages analytical thinking, and may just even give you a chance to take a guess at what the future holds. There. Isn’t that more exciting?

It’s along those lines is happy to provide you the means to reverse the hands of time. See what leading industry thinkers have been reading this year. Consider why these particular stories may have caught the attention of so many. Finally, what clues can you discover about these stories that might hint to upcoming happenings.

Honorable Mention:
Each year we do this the challenge is to not ignore the most recent stories. They’ve had less time to percolate in the cauldron of debate. While “The List” that follows contains those 2014 articles which received the most pageviews over the past year, the all had more than six months to attract readers. That put them at a decisive advantage. To make up for this, we present the “Honorable Mention” list. This contains more recent stories that will no doubt continue to attract readers, as the notes following each story make plainly clear.

Exclusive Interview (Part I): Phil Chiricotti to Retirement Industry: Outsource Fiduciary and combine with HSA or Die!” (August 19, 2014) – This was the first of a four part series published smack dab in the middle of the dog days of August. Had we counted all four parts as one article, they would have constituted the #1 story for 2014. We aren’t surprised since Phil is a colorful character that’s widely respected and just as widely known. He’s always thinking on the leading edge and always challenging the status quo. Want a flavor at his wit? Then read the entire series of articles beginning with this one.

3 Ways 401k Plan Sponsors Can Reduce Fiduciary Liability,” (November 11, 2014) – This late-in-the-year article is destined to become a standard. It explains the 3 popular forms of fiduciary 3(16); 3(21); and, 3(38) and how 401k plan sponsors can use them to reduce fiduciary liability. It also offers a bonus, which might take off big time in 2015 if Orin Hatch has his way. This article barely missed the top ten, which is amazing because it’s been in circulation for little more than a month.

Exclusive Interview: Jerry Schlichter Reveals 3 Ways 401k Plan Sponsors Can Avoid a Fiduciary Breach,” (October 21, 2014) – We’re proud to be one of the first (if not the first) publications to come out with an interview with Jerry Schlichter right after it was announced the Supreme Court would hear his case. Obviously, being an active case, Jerry couldn’t disclose too much about it. But he did offer some fascinating comments on the industry, including its Achilles’ Heel. Read it but don’t weep. Just play it safe.

The List:
Here they are in reverse order ending with the most widely read 2014 story. Without any intention of spoiling the surprise, when you get to #1, you might just detect a bit of humorous irony.

#10:Has the 401k Fiduciary Unknowingly Put Employees in Peril?” (June 10, 2014) – What can this “peril” be that 401k plan sponsors and fiduciaries may have unknowingly placed plan participants in? Is the danger avoidable? Or is it insurmountable? And what can and should be done about it? Ironically, it deals with the popular definition and use of the term “risk” as it applies to investing. Too many 401k plans remain written using outdated twentieth century terminology. This article presents an alternative that more and more advisers are using with their individual clients. Isn’t it time for 401k plans to start incorporating this new terminology?

#9:New 401k Plan Sponsor Fiduciary Worry: Study Reveals Previously Unpublicized Conflict-of-Interest Can Harm Mutual Fund Performance,” (April 1, 2014) – The article highlights a paper that describes a previously unknown form of conflict-of-interest. Unlike 12b-1 fees, revenue sharing, and other kinds of conflicts-of-interest , this one isn’t disclosed in the mutual fund prospectus. Indeed, forget about regular investors, it’s almost impossible for seasoned professionals to identify it. What is it and how can it hurt retirement savers? The article explains the how’s and why’s and even interviews the study’s authors to dig deeper into their research.

#8:Ten Reasons Retirement Experts Want You to Say ‘No’ to MyRA,” (February 5, 2014) – A lot of experienced financial professionals like to point to target date funds as one of the worst ideas ever in the financial industry. Still, given their growing popularity, we really can’t label them as our industry’s “Edsel.” No, that honor would have to go to the MyRA. Talk about a product that does everything the designers want it to do, but nothing the market wants it to do, and you’ve got a MyRA (and an Edsel). It sort of reminds us of that car Homer designed that bankrupted his brother’s thriving automotive business. There are some that say 2015 will be the year of the Edsel – er – MyRA, but here are ten reasons not to believe that.

#7:Exclusive Interview: ASPPA Head Brian Graff Blasts ‘Stupid’ Retirement Suggestions from Capitol Hill (and Others),” (April 15, 2014) – One way to get eyeballs to an article is to interview a provocative figure. Brian Graff never disappoints when it comes to one of’s favorite imperatives (i.e., “blunt commentary”). Here, he blasts everyone from politicians to regulators to folks in his own industry. And, if you read the comments, (and as a publisher always likes to see), the readers can give just as good as they can take. We’re not saying this stuff is poison, but you may want to put on your protective goggles when you read this article. It’s hot!

#6:These 7 Megatrends Will Redefine the Future of 401k Plans,” (May 6, 2014) – Another sure fire way to attract readers is to come up with a list of predictions (specifically, one’s without time limits). This is one of those lists, and, as you will see for yourself when you read it, there’s a reason why the audience enjoys these articles. This one talks about millennials, personalization, holistic integration, technology, leakage, the tax code and the rise of professional advice. What makes it interesting is this: It talks about these issues, but not in ways you always expect. Curious? Take the plunge and see if you’re surprised by any of what you read here.

#5:Exclusive Interview: Treasury Senior Advisor Mark Iwry Explains the Early History of the 401k and Where We Might be Heading,” (February 19, 2014) – We had a chance to snag an interview with the inventor of the MyRA just before the official announcement was made. Iwry goes way back and was (and remains) an instrumental figure driving retirement savings plans from the IRS perspective. You might be amazed when he reveals how it’s the IRS, not the DOL, that often leads the way in crafting new and useful approaches to retirement plans. He even gives a hint of things to come in the way of the Multiple Employer Plan (or MEP 401k).

#4:7 of the Biggest 401k Problems – And Their Solutions,” (April 29, 2014) – What is it about the number seven? No harm in listing the problems since it’s the solutions you’re most interested in discovering (you’ll have to read the article to uncover the ways to resolve these challenges). The problems are: 1) Lack of Saving; 2) Financial Illiteracy; 3) Everything’s Too Confusing; 4) Plan Sponsors Still Don’t Understand Fees; 5) Market Uncertainty; 6) Not Enough Financial Planners; and, 7) Lack of Fiduciary Standard. Do you want to know how to successfully address these problems? Read the article and see what experts around the nation say.

#3:What Every 401k Plan Sponsor and Fiduciary Should Disclose to Employees: How to Retire a Millionaire (Hint: It’s Easier Than You Think)” (February 25, 2014) – One might say this is the article that started it all. First, you can tell by the title why it was so widely read. The body contains an effective way to educate employees (and much more) on the value of saving early and often in their 401k plan. There’s even an effective graph that makes it easy to understand. But that’s not the big news of this particular piece. As the editor’s note at the end explains, the popularity of this article led to the concept of the “Child IRA.” You can get links to articles explaining the Child IRA by reading this story.

#2:What is the 401k Average Deferral Rate?” (June 24, 2014) – Benchmarking is always of key interest to 401k plan sponsors and fiduciaries. One of the key factors is the plan’s deferral rate. Any number of rating agencies can offer their two cents on this, and the article, actually one in a series of four, begins to address this matter. This particular piece offers specific targets and the reasons why they might be relevant. Do you know what the “matching threshold” is and why it might be important? The article explains it. Beyond the matching threshold, do you know what arbitrary numbers people usually pick and why? The article explains that, too. If you want to learn more, the article contains links to other installments in the series.

#1:Compliance Headaches Coming for 401k Plan Sponsors Due to New Fiduciary Regs in 2014?” (January 2, 2014) – They say long articles get the most readers, and this was one of our longest articles of all time. It was also the most read of all our 2014 stories. Sure, we know people like to read predictions about the future. In fact, there’s only one type of article they like reading more – the ones where they can see how the previous year’s predictions panned out. Go for it folks. Find out who was right and who was, shall we say, early.

If you’d like to discover other important topics confronting 401k fiduciaries, then you’re invited to explore Mr. Carosa’s book 401(k) Fiduciary Solutions and discover how to solve those hidden traps that often pop up in 401k plans. His forthcoming book Hey! What’s My Number? – How to Improve the Odds You Will Retire In Comfort will be available later this year.

Mr. Carosa is available for keynote speaking engagements, especially in venues located in the Northeast, MidAtantic and Midwestern regions of the United States and in the Toronto region of Canada.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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