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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 1/23/15

January 26
00:03 2015

1020805_25983300_Trending_Topics_2015.01.26_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
Exclusive Interview: Christopher Carosa Explains 2 Ways Hey! What’s My Number? Can Increase the Odds Retirement Savers Will Retire in Comfort,” (FiduciaryNews.com, January 21, 2015). Answers to the questions you’ve all been asking these past six years.

Compliance – Much Ado About Nothing:
For all the talk, it was just talk. What do you expect? Politicians are all about button pushing. They push a button, reporters write about them. They push a button, lobbyists throw money at them. They push a button, people vote for them. See how it works?
Slow start to Obama’s grand ‘MyRA’ retirement savings program,” (InvestmentNews, January 20, 2015) And this surprises who?
Avoid an IRA Rollover Disaster,” (Financial Planning, January 20, 2015) What a world, what a world… Why do bureaucrats consistently make things harder than they need to be?
New Roth 401k Rollovers Maximize After-Tax Contribution Value,” (ThinkAdvisor, January 20, 2015) Funny, while the floundering MyRA gets all the headlines, the tried-and-true ROTH continues to work miracles in the most quiet of ways.
Highlights of Obama Plan to Tax Wealthy,” (New York Times, January 20, 2015) Just when it looks like the economy is trying to claw its way back from nearly a decade of abuse, the powers that be pull out some of the worst ideas of the Hoover-Roosevelt playbook in hopes to extending this virtual depression.
Obama to push retirement reforms,” (BenefitsPro, January 20, 2015) This is the financial trade press editor’s dream come true. Not only can you run a slew of stories before the fact speculating on what will be said, but you can run a slew of stories after the fact interpreting what was said. Expect to be slewed out over the next week.
Retirement plan proposal being re-introduced in State of the Union draws advance criticism,” (Employee Benefit News, January 20, 2015) Wow. Isn’t this typical? The proposal claims it would only penalize people aged 62 and above with more than $3.4 million in their retirement plan. But that’s using today’s historically low interest rates. If you use historic rates, then anyone 35 years or older with more than $300 will be penalized. How’s them apples? Still feel the same about taxing the “rich.” It’s been said, in America, sooner or later, everyone is rich, at least for a brief moment. Looks like the powers that be want to eliminate even that brief moment.
Obama’s new attack on retirement,” (BenefitsPro, January 20, 2015)  Another take on why these proposals are not going anywhere.
A move towards ending the looming retirement crisis,” (Employee Benefit News, January 21, 2015) This is a restatement of what the White House is proposal. Ironically, the author, who claims outright “there is no downside” to the proposal, stands to eventually lose his job should this idea ever take off.
Retirement is MIA in SOTU,” (BenefitsPro, January 21, 2015) The experts had sad the president’s proposals were DOA (“Dead On Arrival”). Who knew they were so bad they were DBA (“Dead Before Arrival”).
The SOTU kid: Tax on, tax off,” (BenefitsPro, January 21, 2015) DOA, DBA, none of that really matters. This article gives you five things that do matter.
What Social Security Needs: Dependability,” (Wall Street Journal, January 22, 2015) Call this the counter-offensive to the idea that government should take more responsibility for running your retirement plan.
Bob Kerrey: Make Social Security Payouts More Progressive,” (Wall Street Journal, January 22, 2015) He doesn’t call it such, but he’s proposing the same “Child IRA” idea that we’ve seen someplace before…
New Law Could Mean Benefit Cuts For Retirees,” (WealthManagement, January 23, 2015) This is a late entry in the “Cromnibus” reporting.

Fiduciary – Positioning for a Showdown:
Well, aren’t these words all very interesting? Now we get to see which lobbyists really did throw the most money into the ring. Any wagers on the answer?
Hatch: Switch Fiduciary Rule Making For Retirement Plans From DOL To Treasury,” (Financial Advisor, January 20, 2015) Not sure what that would do, unless the proposal is to hand the entire ERISA oversight to the IRS and get the DOL out of the loop. Of course, this might be an idle threat to rein the DOL in.
Obama May Address Fiduciary Issue in State of the Union,” (ThinkAdvisor, January 20, 2015) The operative word is “may.” If he includes it, it means it polls well. If he cuts it, it means nobody cares. Either way, it doesn’t have any bearing on reality in which ever universe you choose to live in.
NY Fed’s Dudley, CFAs: Industry Has a Big Trust Problem. Are Advisors the Solution?” (ThinkAdvisor, January 20, 2015) Knut Rostad appears to have come up with another thoughtful point. The erosion of trust in the financial services industry by consumers stems both from the shenanigans that led to the market crash in 2008/09 and the resultant regulatory failure that ensued.
Obama aide wants tighter 401k broker rules,” (BenefitsPro, January 23, 2015) The White House says conflicts-of-interest are costing retirement savers from $8 to $17 billion a year in what they call a conservative estimate. Now, they’re blaming broker commissions, but that’s not the real reason.
Time for Broker Crackdown as Abuses Cost 401k Savers Billions: Obama Aide,” (ThinkAdvisor, January 23, 2015) More of the same, only longer.
Billions in Lost 401k Savings, Abusive Brokers Under White House Scrutiny,” (Businessweek, January 23, 2015) Yet another take, this time for something a bit more mainstream.

Fees – There’s a Real Issue Here:
If only people were aware enough to pay attention.
DOL Challenges Rochester Investment Adviser on Fees,” (Plansponsor, January 20, 2015) The article doesn’t say much more than that.

Investments – “I Wonder, Wonder, Who?”:
Who comes up with these story ideas? Are the for real? Or do they just want to incite readers into buying their product (and by “product” we mean both the media’s product and the investment product).
Five surprise investment themes for 2015,” (InvestmentNews, January 20, 2015) Seriously? In a trade publication? This is the kind of article professionals admonish their clients for reading.
White-labeling investment funds Is a bad idea,” (Employee Benefit Adviser, January 20, 2015) Well, this is one opinion. It sort of assumes all 401k participants are trained securities analysts. Not sure about that.
No, cheap oil prices probably won’t crash your 401k,” (The Washington Post, January 22, 2015) The best way to stimulate the economy is to let people keep more of their money. It worked for tax breaks. There’s no reason to expect it won’t work for cheap oil, too.

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.
Catching a Client’s Missing 401k Match,” (Wall Street Journal, January 16, 2015)
Why Your Employer May Be Your Best Financial Adviser,” (Money, January 19, 2015)
7 questions to ask non-profit plan sponsors,” (Employee Benefit Adviser, January 21, 2105)
A recipe for future retirement security,” (InvestmentNews, January 22, 2015)
Retirement planning blind spots show need for education,” (Employee Benefit Adviser, January 22, 2015)

Trends and News for Retirement Savers:
If you’re a retirement plan fiduciary – whether a plan sponsor or a financial professional, don’t you think it’s a good idea to keep up on the topics retirement savers are most interested in? That’s what the media tries to do. Here’s what they think is on the mind of the people saving for retirement.
Census Data Understates Retirement Income of Wealthy,” (ThinkAdvisor, January 20, 2015)
Why Confidence May Be Your Biggest Financial Risk in Retirement,” (Money, January 20, 2015)
How Much Can You Safely Spend in Retirement?” (Wall Street Journal, January 20, 2015)
5 things American seniors should be entitled to,” (MarketWatch, January 20, 2015)
Secrets for successful withdrawal strategies in retirement,” (InvestmentNews, January 22, 2015)
Why Working Longer Isn’t Always an Option,” (Yahoo, January 22, 2015)
Have an Empty Nest? Why You Should Rent in Retirement,” (Forbes, January, 2015)

Wisdom from Some of Our Favorite Blogs:
The Frugal Fiduciary: Keeping my Fingers Crossed for 401k Reform in Tonight’s SOTU Address |
Boston ERISA Law Blog: ACI’s 9th National Forum on ERISA Litigation |
The Chicago Financial Planner: Managing Inflation in Retirement |
ERISA Lawyer Blog: IRS Discusses The Retirement Savings Contributions Credit |
Squared Away Blog: Winging It in Retirement? |
ERISA Lawyer Blog: Fifth Circuit Rules That Investment Guidelines Are Not “Other Instruments” Which Participants May Request Under ERISA Section 104(b) |
Behavior Gap: Your Exposure Trumps Your Risk |
The Trust Advisor: A Theme in Davos: Fear of Financial Instability |
The Chicago Financial Planner: Robo Advisors – A Brave New World? |

Hot Tips from Popular Web Resources:
NAPA Net: White House Unveils Sweeping Retirement Proposals |
NAPA Net: Third Time a Charm for Fiduciary Reproposal? |
NAPA Net: Advisors Say Biggest Retirement Policy Misperception: 401k Deferrals |
NAPA Net: What’s the Most Likely Outcome of the Fiduciary Reproposal? |
Morningstar: A Prescription to Save the American Retirement System? |
Motley Fool: 3 Ways to Maximize Your Social Security Benefits |
NAPA Net: Senate Finance Committee Launches Tax Reform Working Groups |
NAPA Net: Case of the Week: 2015 Retirement-Related Tax Proposals |
NAPA Net: Would Your Clients Pass a DOL Audit? |
NAPA Net: Premixed Funds Lead Fund Outflows in Slow Trading Month |
NAPA Net: International Investing: One of the World’s Greatest Mysteries? |
NAPA Net: White House Readies Attack on ‘Perverse Incentives’ in Fiduciary Proposal |
NAPA Net: More Jump on Auto Enrollment Bandwagon, but Not Everyone |
Morningstar: Time for a National Conversation About Retirement Policy |
Motley Fool: Do You Make These Common Mistakes With Your 401k Plan? |
NAPA Net: Custom TDFs a Reality for Larger Plans |
NAPA Net: 401k Fee Suit Defendant Filing Bucks the Odds |
NAPA Net: Public Pension Ratings: High Variation, Even Within Individual States |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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