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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 2/6/15

February 09
00:03 2015

1020805_25983300_Trending_Topics_2015.02.09_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
Investing vs. Saving – Why the 401k Fiduciary Must Emphasize Only One,” (, February 3, 2015) On the Road to Success, discovering the critical steps is often more important than the length of your stride.

Compliance – Taxerwocky:
“Beware the Jabberwock, my son!
The jaws that bite, the claws that catch!”
Retirement bills would allow higher matches,” (BenefitsPro, January 30, 2015) Again with the talk of MEP 401k plans. Let’s see if this is just talk or the real thing. The good news is that there is clear bipartisan agreement on these measures, so it’ll probably happen.
Obama Would Block Strategies to Pump Up Roth IRAs,” (Wall Street Journal, February 2, 2015) Oh! And just as the middle class was started to copy the upper class in doing this.
Obama budget proposes retirement savings cap,” (BenefitsPro, February 2, 2015) This is amazing. Between the above article and the one further down about 401k millionaires, you’ve got to wonder if the White House is even trying. It’s getting to the point where they’re sounding like the proverbial spoiled brat who doesn’t get his way. Or maybe it’s just because they’re from a different planet.
Re-introduced Retirement Security Act could boost 401k deferrals,” (Employee Benefit Adviser, February 3, 2015) Another overview of the bipartisan agreement.
Stay compliant on 401k hardship withdrawals,” (BenefitsPro, February 3, 2015) Sometimes the words used come to frame the debate. “Leakage” has always been a tarnished term, suggesting something approaching underhandedness, but not quite there. Here’s the problem: One employee’s “leakage” is another employee’s mortgage payment – at least that’s what we learned as a result of the current economic downturn.
Corporate pensions suffer sharp declines,” (BenefitsPro, February 4, 2015) The only question is how big a decline. It’s only a matter of time before the last of these dinosaurs walk the earth.

Fiduciary – Shall I Compare Thee to a Fiduciary?:
“When in eternal lines to time thou growest;
So long as men can breathe, or eyes can see,
So long lives this, and this gives life to thee.”
New Best Practices Aim to Codify Advisors Fiduciary Duty,” (On Wall Street, January 30, 2015) Will this take the enforcement of SEC regulators out of the hands of the government and into the hands of trial attorneys?
Institute for Fiduciary Standard draws SIFMA fire for best practices plan,” (InvestmentNews, January 30, 2015) Wow. That was fast. Wasn’t it? Sometimes the merits of a new idea can be found in the nature of the enemies of that new idea. Knut Rostad’s “made in Washington” comment is a classic.
Side-Stepping SEC and DOL, 11 Fiduciary Best Practices for Advisors Are Proposed,” (ThinkAdviser, January 30, 2015) More on the story with more of an insider’s point of view.
Wall Street Gears Up As White House Pushes Retirement-Fund Rules,” (Financial Advisor, February 2, 2015) This is probably the best news for the White House, because if there any group more despised than the White House (and politicians in general) at this point, it’s Wall Street. Now, if Main Street comes out in support of the White House on this issue, look out Wall Street.
Raymond James CEO Calls on Advisors to Fight DOL Fiduciary Definition,” (On Wall Street, February 3, 2015) And so it goes…
The Institute’s Fiduciary Best Practices: What’s Missing?” (ThinkAdvisor, February 3, 2015) Bob Clark poses the question of whether brokers must be independent from their firms to be deemed “fiduciaries.” It seems a moot question because a fiduciary should not be placing clients into a product they or their company is compensated by. How hard is this to understand?
Chamber of Commerce Raises Concerns With DOL Fiduciary Redraft,” (ThinkAdvisor, February, 5, 2015) Really? The Chamber of Commerce? Is there’s nothing that don’t know?
DOL fiduciary rule stalls again as brokerage industry makes last-minute push against it,” (InvestmentNews, February 6, 2015) Death by a thousand needles.

Fees – How Do I Fee Thee?:
“…to the depth and breadth and height
My soul can reach, when feeling out of sight”
Raymond James FAs to Refund Some Fees to Retirement Plans, Charity Trusts,” (ThinkAdvisor, February 4, 2015) This comes out a day after the Raymond James CEO urges brokers to fight the fiduciary standard. Ain’t Karma a b―.
Raymond James Seeks Fee Clawbacks on Mutual Fund Sales,” (WealthManagement, February 4, 2015) Could it be this story is bigger than we thought?

Investments – Kudya Con:
“And there were gardens bright with sinuous rills
Where blossom’d many an incense-bearing tree;
And here were forests ancient as the hills,
Enfolding sunny spots of greenery.”
Obama’s retirement cap might sound good but it has an annuity problem,” (InvestmentNews, February 2, 2015) This is only one of the many “problems” with buying long-term products that rely on favorable tax treatment.
Longevity Annuities: Their Time Has Come,” (ThinkAdviser, February 2, 2015) It looks good on the black board. Only time will tell if it works in the real world.
Why adding energy stocks to your retirement fund may be a smart move,” (CBS News, February 2, 2015) Because what goes up must come down – and vice-versa.
How retirement plans vastly underestimate inflation,” (MarketWatch, February 3, 2015) Well, maybe the importance of this is a tad overestimated.
How many funds is too many for your retirement portfolio?” (CNN, February 3, 2015) It we’ve said this once we’ve said this a million times. This is an artifact of the failed investment-based plan design. The consequences are not pretty.
Why 401k investment choices don’t matter anymore,” (BenefitsPro, February 4, 2015) On the growing importance of behavioral-based plan design and how investment menus are adapting to this.
Are in-plan retirement products the solution to retirement readiness concerns?” (Employee Benefit Adviser, February 4, 2015) At least they’re honest enough to call them “products” and not “investments.” Portfolio managers invest assets. Salesmen sell products. Which would you rather have overseeing your retirement nest egg?
SEC commissioner pushes for TDF warnings,” (BenefitsPro, February 5, 2015) These have always been a nagging problem, but not for all the reasons he states here. In fact, some of his suggestions might compound the problem.

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.
More 401k millionaires than ever,” (BenefitsPro, January 30, 2015)
4 Ways to Tell If Your 401k Is a Bad Egg,” (DailyFinance. January 30, 2015)
Retirement plans: Why are employee participation rates so important?” (Employee Benefit News, January 30, 2015)
5 reasons to consider Roth in-plan conversions,” (Employee Benefit News, February 2, 2015)
Think tank calls for plugging 401k leakage,” (BenefitsPro, February 3, 2015)
The New World Of Saving And Investing For Retirement,” (Forbes, February 3, 2015)
Fidelity s 401k Millionaires Double in Number,” (Financial Planning, February 4, 2015)
Gen X, Y Driving DC Contributions and Rollovers,” (ThinkAdvisor, February 5, 2015)
Financial wellness complements retirement,” (Employee Benefit Adviser, February 6, 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.
The seven most common IRA mistakes people make,” (MarketWatch, January 30, 2015)
What women need to know when they retire,” (MarketWatch, February 2, 2015)
Clueless about retirement income,” (BenefitsPro, February, 3, 2015)
Can Clients Achieve Their Retirement Dreams?” (On Wall Street, February 3, 2015)
Mistakes Employees Often Make With Retirement Savings,” (Wall Street Journal, February 3, 2015)
What Obama’s proposed cap on 401k and IRA plans could mean,” (CNBC, February 4, 2015)
Why mortgage debt threatens boomers’ retirements,” (MarketWatch, February 4, 2015)
US Retirement Worries Go Global,” (Fox Business News, February 4, 2015)
How to best minimize taxes during retirement,” (InvestmentNews, February 5, 2015)
It’s not too late to save for retirement,” (CNBC, February 5, 2015)

Wisdom from Some of Our Favorite Blogs:
The Chicago Financial Planner: My Top 10 Most Read Posts of January 2015 |
Fred Reish: Navigating Retirement Risks |
Behavior Gap: Why is Money Important to You?|
The Retirement Plan Blog: Frozen pension plans becoming a high maintenance item |
The Chicago Financial Planner: Why Using Home Equity to Invest in the Stock Market is a Bad Idea |
Behavior Gap: Sticking with the Herd: A Risky Proposition |
Boston ERISA Law Blog: Me, Tibble, Pensions & Investments and Don Draper |
ERISA Lawyer Blog: D.C. Court Of Appeals Holds That State Law Cannot Be Applied To Obtain Undistributed Plan Benefits |
Scholarly Financial Planner: Put America to Work: Energy Efficiency Investments for Municipalities |


Hot Tips from Popular Web Resources:
NAPA Net: Bipartisan Retirement Bills Emerge in House and Senate |
NAPA Net: HELP Retirement Subcommittee Members Announced |
NAPA Net: Are Fiduciary Status and Commissions Incompatible? |
NAPA Net: What’s the Biggest Obstacle to Offering a Retirement Plan? |
NAPA Net: Large Firms Jumping on the ETF Train |
Morningstar: Company Stock in 401k Plans: Proceed With Caution |
Motley Fool: Here’s How You Fix Social Security |
NAPA Net: President’s Budget Proposal: A Mixed Bag |
NAPA Net: A Deja View on Retirement Policy? |
NAPA Net: IFS Releases 11 Best Practices for Advisors |
NAPA Net: FSR’s Pawlenty Joins Chorus on Leaked White House Memo |
Motley Fool: 3 Reasons Now Is the Best Time to Open an IRA |
NAPA Net: Case of the Week: What’s a QROPS? |
NAPA Net: Survey: Yes to DC Plans, No to Government Intervention |
NAPA Net: Good News About 401k Deferrals, Balances |
NAPA Net: Kentucky Considering State-run Retirement Plan |
NAPA Net: Do You ‘Get’ Gamification? |
NAPA Net: For Some, Retirement’s Working Out, Despite Preretirement Doubts |
NAPA Net: President’s Budget Proposal Would Limit Roth Conversions, Stretch IRAs |
Daily Finance: Good News and Bad News for Americans’ 401k Savings  |
Kiplinger: Good Reasons to Work Past Retirement Age  |
NAPA Net: Mutual Fund Fees Declining |
NAPA Net: Is There a January Effect for 401k Plans? |
NAPA Net: Filling in the Blanks: Avoiding IRS Scrutiny of Form 5500 |
Morningstar: 4 Dangerous Assumptions That Could Hurt Your Retirement Plan |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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