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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 1/30/15

February 02
01:40 2015

1020805_25983300_Trending_Topics_2015.02.02_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
‘How-to’ Guidelines to Follow When Creating 401k Plan Benchmarks,” (, January 27, 2015) Just because something is measurable doesn’t mean it’s relevant.

Compliance – Shake It Up, Baby:
There’s a lot of talk about a lot of ideas about a lot of policy changes that just won’t pass the audition.
Some states move to help spur retirement savings,” (USA Today, January 27, 2015) You may have seen this story dozens of times before, but it sparked an idea in our collective heads. If a state offers a retirement plan to non-public employees, is that retirement plan still covered by ERISA? We look forward to the ensuing debate between Federal and state rights on this one.
What Obama’s attempt to tax 529 plans says about the safety of Roth IRA assets,” (InvestmentNews, January 28, 2015) We traveled a long way from “We the People” to “I the Government.” The Young Frankenstein reference in the article only adds to the charm.
A big push for multiple employer plans,” (BenefitsPro, January 28, 2015) This is the big one, the grand enchilada, the capo del tutti capi, well, maybe not the last one, but MEP 401k plans are game changers – if done correctly.
Military retirement faces shake-up,” (BenefitsPro, January 28, 2015) Government employees moving from a DB world to a 401k-like world? Could this be the start of something big?

Fiduciary – Twist and Shout:
When Shakespeare wrote, “Methinks the lady doth protest too much” he probably didn’t know how easy he had just make it to spot a guilty party.
Cetera president blasts White House memo defending DOL fiduciary,” (InvestmentNews, January 27, 2015) A broker exec comes out whining while consumer champion Barbara Roper comes out swinging, shedding new light on the meaning of the adage “never ask a question you don’t know the answer to.”
Why brokers should be bound to a fiduciary duty,” (BenefitsPro, January 27, 2015) Actually, only those brokers holding themselves out as advisers should be bound by the fiduciary duty. That levels the playing field. Traditional brokers can be left alone.
A fiduciary standard creates internal conflicts for advisers,” (InvestmentNews, January 28, 2015) Um,… OK. Don’t see how protecting the client’s downside is not in the best interests of the client, but, hey, you never know. Maybe there’s a tax reason to lose.
Ex-Gov. Pawlenty: White House Fiduciary Memo ‘Overly Broad’,” (ThinkAdvisor, January 28, 2015) And by “broad” he means the memo doesn’t cite specifics. He’s right. It doesn’t. But maybe that’s the White House’s strategy. Get opponents to repeatedly say the memo doesn’t offer support for its conclusions, then come out with those specifics and say, “There you go! Everything’s now answered. We can move forward.”

Fees – Not The Beatles, but The Crickets:
Silence may be golden, but it doesn’t tell you the full story. Unless, of course, you listen to what the silence says.

Investments – Helter Skelter:
Sooner or later those betting on fixed instruments will find their chips raked off the table.
Just say ‘no’ to an annuity in your Roth IRA,” (MarketWatch, January 23, 2015) Simply put: “Why pay for tax advantages you don’t need?”
Warning: Bond Funds That Act Like Stocks,” (Financial Planning, January 26, 2015) Diligent fiduciaries have been making this point for years. The only beef with this article is that implies that some bond funds do not act like stocks. We’ve said it once and we’ll say it again, all mutual funds are, by definition, equities, even those that invest just in bonds. Why? Because the share price is not fixed. (OK, OK, cut us some slack on money market funds, but you know what we’re saying.)
How To Overweight Your Portfolio For More Retirement Income,” (Forbes, January 28, 2015) While the article does talk about stocks, it also talks about mutual funds. Fortunately, it’s talking about mutual funds that invest in dividend paying equities and not bond funds. If you missed the above article, bond funds are bad. Bad! we tells ya!

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.
Yip: Struggle to save for retirement not limited to U.S.,” (Dallas Morning News, January 25, 2015)
Retirement plan providers must play a role in fixing system,” (Employee Benefit Adviser, January 26, 2015)
Advisers poised to help anxious employers implement auto 401k features,” (Employee Benefit Adviser, January 26, 2015)
10 worst states for 401k plans,” (BenefitsPro, January 26, 2015)
2 troubling trends in retirement planning,” (MarketWatch, January 27, 2015)
Retirement crisis is real and getting worse: Study,” (InvestmentNews, January 27, 2015)
401k contribution rates rising faster than ever,” (BenefitsPro, January 27, 2015)
Younger generations going all in with 401k contributions,” (InvestmentNews, January 28, 2015)
“$1 trillion in disappearing retirement funds,” (BenefitsPro, January 28, 2015)
The evolution of 401k plan benchmarks,” (BenefitsPro, January 28, 2015)
Average 401k balances hit record highs,” (BenefitsPro, January 28, 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.
States That Tax Social Security Benefits,” (Wall Street Journal, January 24, 2015)
These RV-riding retirees will make you incredibly jealous of their life on the road,” (Yahoo Finance, January 24, 2015)
This is the only retirement guide you’ll ever need,” (CNBC, January 24, 2015)
Working After Full Retirement Age,” (WealthManagement, January 26, 2015)
Roth IRA vs. Traditional IRA: Which Is Right for You?” (Yahoo Finance, January 26, 2015)
Social Security Q&A: Will I Receive Both a Retirement and a Survivor’s Benefit?” (Forbes, January 26, 2015)
Early Retirees Should Make the Most of Their Mortgages,” (WealthManagement, January 26, 2015)
10 surprisingly affordable retirement hotspots,” (Yahoo Finance, January 28, 2015)
Why You Should Think Twice Before Choosing a Roth IRA or Roth 401k,” (Money, January 28, 2015)
The Right Way to Tap Income in Retirement,” (Money, January 28, 2015)

Wisdom from Some of Our Favorite Blogs:
Frugal Fiduciary: NAPA stakes a position against the DOL’s fiduciary rule |
fi360: How often should I update my client’s IPS? |
Scholarly Financial Planner: Prof. Zigglehoffer – Thank you for the push. |
Pension Risk Matters: Report Card For Teacher Pension Plans |
The Trust Advisor: How Safe Is Your Retirement Portfolio? |
Squared Away Blog: Retirement Saving: Excuses and Regrets |
The Chicago Financial Planner: 7 Tips to Become a 401k Millionaire |
RetirementRevised: Stanford pushes the envelope for higher ed on midlife career change |
Behavior Gap: Take the No Shame, No Blame Challenge |

Hot Tips from Popular Web Resources:
NAPA Net: Fiduciary Reproposal = Fewer Advisors Working With Retirement Plans? |
NAPA Net: Automatic Enrollment Works — Where It’s Available |
Morningstar: Retirees: Are You Spending Too Much? |
NAPA Net: Hatch Outlines Pension Reform Agenda |
NAPA Net: 4 Things You Need to Know If You’re Not Saving for Retirement |
NAPA Net: Stocks Swayed by the Super Bowl? |
Motley Fool: 3 Critical 401k Mistakes to Avoid |
Morningstar: Illinois Retirement Initiative Could Blaze a Path for Other States |
NAPA Net: Cost of Retirement Income Soars |
NAPA Net: ERISA Advisory Council Offers Advice on Loans, Withdrawals |
NAPA Net: Hey Big Saver: Vanguard Learns from Amazon |
Morningstar: Is Your Retirement Portfolio’s Asset Allocation on Track? |
NAPA Net: ERISA Advisory Council Backs Expanding MEPs |
NAPA Net: Impact of ETF Growth on The DC Market |
Motley Fool: What Is the Best Way to Invest Your IRA? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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