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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 2/20/15

February 23
00:03 2015

1020805_25983300_Trending_Topics_2015.02.23_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: Brian Hamburger Says Private Industry Converging on Fiduciary Solution Ahead of Regulators,” (, February 18, 2015) Why the investment adviser industry wants to mimic American, but not British, doctors.

Compliance – Doubling Down on Defeat:
If the Beatles were around today, they’d make a song titled Hey Government, as in “Hey government, don’t be averse, take a bad policy, and make it much more worse…” OK, maybe the prose isn’t so hot, but you get the idea.
Ailing public pensions hope to borrow billions,” (BenefitsPro, February 12, 2105) When even Goldman Sachs – which stands to profit from such a move – calls this “bad public policy,” you really know it’s bad public policy.
Risky business,” (BenefitsPro, February 18, 2015) Now, when Alicia Munnell agrees with Goldman Sachs on this whole Pension Obligation Bond idea, you know these thingees are fraught with danger of the worst kind.

Fiduciary – Change of Venue:
Is this going to be a case where “playing in Peoria” has much more effectiveness than lobbying in Washington?
Fiduciary rule among SEC’s top priorities,” (BenefitsPro, February 13, 2015) As it was in 2014, 2013, 2011, 2010 and 2009. Hey, at least they’re consistent.
Investor Advocates Step Up Lobbying Efforts for Fiduciary Rule,” (WealthManagement, February 13, 2015) Get your popcorn ready. This ought to be fun to watch. Not that it really means anything.
Retirement-Account Standards May Tighten,” (Wall Street Journal, February 17, 2015) We won’t know it until we see it. On the other hand, the fact this story has moved from the “professional” section of the WSJ to the “retail” section does suggest some significance.
Fiduciaries to Pay $39M for Raiding Benefit Plans; Outcry Over DOL Rule Continues,” (ThinkAdvisor, February 18, 2015) A clever juxtaposition. Just as the lobbyists cry foul over the DOL’s Rule, out comes a Federal judge saying, “Yep, the DOL is right.”
The Medium Is the Message, When the Subject Is Investor Protection,” (ThinkAdvisor, February 18, 2015) Who needs regulators when you can take it to the streets?
Wall Street steps up attack on 401k broker rule,” (BenefitsPro, February 18, 2015) They huffed and they puffed by they still couldn’t explain in plain English how you harm investors by always acting in their best interests. They tried, though. A full 18 pages of trying. Something only a policy wonk would love. The average investor? If you can’t say it in 18 seconds don’t even bother saying anything. One final dig: The report tries to equate “low fees” with best interests. Even the DOL has backed down on this. What are these authors thinking? Well, consider the source. The report came from a law firm, not an investment firm.
Did regulators just miss the fiduciary train?” (BenefitsPro, February 18, 2015) The time may have come and gone for Washington to act on the fiduciary standard. A consortium of private businesses has decided to take the issue directly to the public.
SEC Chief to Break Her Silence on Fiduciary in ‘Short Term’,” (ThinkAdvisor, February 20, 2015) Why does this have all the appearance of a dam about to burst? If and when it does, will it still matter (see “missing the train article” above).
SEC’s White sidesteps direction for fiduciary duty,” (InvestmentNews, February 20, 2015) Or, maybe the dam won’t burst. It’s all in the eye of the reporter.

Fees – It’s Happening:
Don’t let this media silence trick you into thinking nothing has been happening. A series of court rulings, reported elsewhere in this week’s Trending Topics, come courtesy of hidden fees, undisclosed compensation, and that whole “conflict-of-interest” conundrum we’ve been warning you about.

Investments – Take That, Product Salesmen!:
Could this be another example of Main Street taking on Wall Street?
Changes coming to target-date mutual funds,” (USA Today, February 16, 2015) This is certainly an extensive litany of issues for the popular default options.
How you might beat the annuity actuaries,” (MarketWatch, February 17, 2015) A fascinating yet amazingly simple rule of thumb. Buying an annuity means you’re betting you will live longer than the insurance company thinks you will. If that’s the case, you better make sure the insurance company will live longer than you.

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.
Six ways your 401k investment advisor can help manage vendors,” (Employee Benefit Adviser, February 17, 2015)
US facing $4 trillion retirement shortfall, EBRI says,” (BenefitsPro, February 17, 2015)
Phased Retirement: A Disconnect Between Workers and Employers,” (WealthManagement, February 17, 2015)
Disruptions wipe away $2.5 trillion in retirement savings,” (BenefitsPro, February 17, 2015)
401k challenge: Plugging plan leakage when workers change jobs,” (InvestmentNews, February 18, 2015)
DB plan sponsors actively look at risk management options,” (Employee Benefit Adviser, February 18, 2015)
DC plan participants keeping their cool but disruptions prove costly,” (Employee Benefit Adviser, February 19, 2015)
Northern Trust to pay $36M to settle ERISA suit,” (BenefitsPro, February 19, 2015)
How to Responsibly Raid Your Retirement Account,” (Bloomberg Business, February 19, 2015)
Lockheed to pay $62M to end pension fees case,” (BenefitsPro, February 20, 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.
Pension buyout or payments for life? Start with the trade-offs,” (MarketWatch, February 16, 2015)
Tax-filing tips for retirement fund withdrawals,” (CBS News, February 16, 2015)
Holistic approach re-energizes retirement plan engagement,” (Employee Benefit News, February 17, 2015)
The Retirement Investing Mistake You Don’t Know You’re Making,” (Money, February 17, 2015)
Debt vs. Retirement: How Much To Put Toward Each,” (Forbes, February 17, 2015)
How much should you contribute to your 401k?” (Yahoo Finance, February 17, 2015)
DIY plan-to-plan portability is harder than you think,” (Employee Benefit Adviser, February 18, 2015)
Protect your retirement plan from the government’s whims,” (CNN, February 18, 2015)
Baby Boomers slowly growing more comfortable with retirement,” (Fortune, February 18, 2015)
Fewer Americans delaying retirement,” (BenefitsPro, Febraury 19, 2015)
Here’s a Social Security strategy worth pondering,” (CBS News, February 19, 2015)
How to Balance Spending and Safety in Retirement,” (Money, February 19, 2015)
Who needs beaches? More boomer retirees are staying put,” (CNBC, February 19, 2015)

Wisdom from Some of Our Favorite Blogs:
The Chicago Financial Planner: What is a Hedge Fund? |
Behavior Gap: The Opposite of Spoiled: A Better Way to Talk About Money |
Squared Away Blog: Breaking Up (the Pension) Is Hard to Do |
The 401k Plan Blog: Fiduciary, as easy as 1, 2, 3… |
RetirementRevised: Phased retirement: A disconnect between workers and employers |
Squared Away Blog: Ranking: Top Cities for Successful Aging |
Behavior Gap: Treating Money Like a Tool: We Don’t Spend It, We Use It |
Scholarly Financial Planner: Fiduciary Standard & the Economic War Between Wall Street and Main Street |
The Trust Advisor: Financial Advice by the Demographics |

Hot Tips from Popular Web Resources:
NAPA Net: 3 Things Every Plan Committee Member Should Know |
NAPA Net: Help Wanted: Employees Need More Retirement Support |
NAPA Net: ICI Survey: No Change in 2014 for Most DC Plan Participants |
Morningstar: 20 IRA Mistakes to Avoid |
Motley Fool: Retirement Planning: 3 Things Baby Boomers Need to Know |
NAPA Net: TDF Growth Slows |
NAPA Net: Case of the Week: What’s a 10b5-1 Plan? |
NAPA Net: DOL Seeks to Move Pension Filings to the Cloud |
NAPA Net: Do Robo-Advisors Dream of Lifetime Income Goals? |
NAPA Net: ‘Disruptive Events’ Hurt Americans’ Retirement Plans |
DailyFinance: 6 Easy Steps to Get Started With Investing |
Morningstar: Target Date Fund Inflows Not What They Used to Be |
NAPA Net: Proposed Illinois Budget Includes Deep Cuts to State Pensions | MyRA: The IRA Wannabe |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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