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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 3/20/15

March 23
00:02 2015

1020805_25983300_Trending_Topics_2015.03.23_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: Gabe Zichermann on How Game-like Techniques Can Motivate Behavior,” (, March 17, 2015) If a game has a purpose, is it still a game? If it makes saving for retirement fun, who can ever complain?

Compliance – Oh, Brother!:
That would be instead of “Big Brother.” People complain they are treated like numbers. Why, then, do they insist on institutionalizing their lives? Don’t they understand these institutions just view them as numbers? And when the dollar numbers don’t add up, the people numbers often come up short.
New accounting rules reveal pension shortfalls,” (BenefitsPro, March 18, 2015) And the news continues to get worse. How many times will they keep trying to fit a square peg in a round hole before they finally figure it out.
A model for state auto-enroll Roth IRAs,” (BenefitsPro, March 19, 2015) Could this be a taste of things to come?

Fiduciary – The Government is All In:
In this high stakes game, the regulators have joined forces and placed all their chips in the pot – or so they tell us. We won’t know for sure what their holding until they reveal their true hands.
Perez rallies support for 401k broker rules,” (BenefitsPro, March 13, 2015) Finally, a headline that tells it like it is. This whole Fiduciary Rule is about only one thing: Brokers selling advice, not brokerage services. As another columnist said last week, the solution is incredibly simple. Anyone selling advice plays by the same rules.
Wall Street Study Pans White House Analysis of Retirement Advice Rule,” (New York Times, March 16, 2015) When will the New York Times learn Wall Street does not speak with one voice on this?
All Eyes on SEC Chief to Move Fiduciary Forward, FINRA’s Ketchum Says,” (ThinkAdvisor, March 16, 2015) The article also contains a brief rundown of why SIFMA thinks the White House’s billion dollar number is all wet.
SEC’s Mary Jo White says agency will develop fiduciary rule for brokers,” (InvestmentNews, March 17, 2015) The tie-breaking vote speaks.
SEC Will Develop Fiduciary Rule for Advisors, White Says,” (Financial Planning, March 16, 2015) And so it begins. The slow music of synchronicity begins to play, much to the chagrin of quite a few.
SEC chief will push for tougher fiduciary rule,” (BenefitsPro, March 17, 2015) Hmm, those hollering for the DOL to wait for the SEC might need to try another ploy. FYI, the harmonization thing doesn’t appear to be a point of contention anymore, either.
DOL: SEC Input Led to ‘Numerous Changes’ In Proposed Fiduciary Rule,” (Financial Advisor, March 17, 2015) Hmm, again. Looks like the DOL wasn’t acting independently, but was talking to the SEC all along.
DOL’s Authority to Define Fiduciary Questioned,” (ThinkAdvisor, March 17, 2105) One may question it, but one may not like the answer.
SEC to develop stricter fiduciary rules for advisers,” (Employee Benefit News, March 18, 2015) But you already knew that…
Fiduciary Standard Should Be Based on How Brokerage Industry Works,” (ThinkAdvisor, March 18, 2015) A Glass-Steagall for the investment industry? Interesting idea.
What a new fiduciary standard means to plan sponsors,” (Employee Benefit News, March 18, 2015) A great piece for plan sponsors just getting into this discussion.
Fiduciary Roundtable: Where Is the Industry Heading?” (WealthManagement, March 18, 2015) The article features Knut Rostad and Brian Hamburger discussing regulatory doings and the impact it will have on the industry.

Fees – The Fall of the House of 12b-1:
You don’t see it directly, but this is the theme of the week. Although, to be honest, we’ve heard that tune before.
Fee range wide for small 401k plans,” (Employee Benefit News, March 17, 2015)  The average fee is 1.44%, but there’s a wide spectrum ranging from 0.43% to 1.44%.
EBSA to Extend Window for Retirement Account Fee Disclosure,” (ThinkAdvisor, March 18, 2015) The DOL is giving plan sponsors a break. It looks like they might be able to delay reporting for up to two months.
The Single Best (And Easiest) Way to Boost Your Investment Returns,” (Money, March 18, 2015) Surprise! This isn’t in the wrong category. The headline is just misleading. This is an article about reducing “fees.” The words “fees” is in quotes because half of the article deals with mutual fund expenses – a third category which is neither fees nor investment returns. Looks like the Money editors need to do a better job vetting articles – or at least the headline writers.
Will mutual funds’ pay-to-play at brokerages go away?” (InvestmentNews, March 20, 2015) ‘bout time.

Investments – The Sun is Setting:
At what point do we admit this category should be replace with a “Savings” category? It long ago stopped being about investments and became nothing more than selling products. Whenever that happens, it eventually becomes a race to mediocrity, which is another way of saying a race to the bottom. That’s not good for retirement savers.
What’s the Best Way for Retirees to Invest Their Nest Egg?” (Wall Street Journal, March 15, 2015) Here are a couple of competing ideas: Total return and investing for income.
Why Guaranteed Annuities Belong in 401k Plans,” (Wall Street Journal, March 14, 2015) Um, OK…
Company Stock in Retirement Plans Should Raise Red Flag for Advisors,” (WealthManagement, March 18, 2015) I you don’t know this by now, you will never, never, know…

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.
Gamification and the 401k,” (BenefitsPro, March 18, 2015)
Retirement assets reach $21.5 trillion,” (BenefitsPro, March 19, 2015)
For Small Businesses, Turning a Retirement Burden Into Tax Savings,” (ThinkAdvisor, March 19, 2015)
More Americans may have adequate retirement savings,” (CNBC, March 18, 2015)
Lack of understanding hinders IRA contributions,” (Employee Benefit Adviser, March 20, 2015)
U.S. Retirement Crisis Is Real: NIRS,” (ThinkAdvisor, March 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.
Canadians Share Retirement Anxiety, but They Shouldn’t,” (Retirement Wire, March 2, 2015)
Don’t Be Too Generous With College Money: One Financial Adviser’s Story,” (Money, March 12, 2015)
Avoid A Retirement Full Of Hindsight,” (Forbes, March 14, 2015)
The 100-Year-Old Portfolio: Investments for a Long Life,” (US News, March 16, 2015)
Two Generations, Retired and Together,” (New York Times, March 16, 2015)
Yes, You Need An IRA – Probably Two,” (Forbes, March 16, 2015)
The free money you might be missing out on,” (CBS News, March 16, 2015)
Retirement? Not Just Yet,” (Wall Street Journal, March 17, 2015)
Planning To Work In Retirement Isn’t Really A Plan,” (Forbes, March 17, 2015)
Why Your Empty Nest May Be Hazardous to Your Retirement,” (Money, March 17, 2015)
A guide to not retiring,” (MarketWatch, March 17, 2015)
Saving for vacation more important than retirement,” (BenefitsPro, March 18, 2015)
Tuition vs. Retirement: Resist urge to put kids first,” (USA Today, March 18, 2015)
No Fooling: Deadline for First IRA Withdrawal Is Almost Here,” (Wall Street Journal, March 19, 2015)
New retirement planning: How to spend your time, not your money,” (InvestmentNews, March 19, 2015)
What you need to know about the high cost of retirement,” (MarketWatch, March 19, 2015)

Wisdom from Some of Our Favorite Blogs:
Proskauer’s ERISA Practice Center Blog: Breaching Fiduciary Cannot Seek Equitable Indemnity from Another Fiduciary |
Squared Away Blog: Navigating Taxes in Retirement |
Fred Reish: The Fiduciary Exemption for Commissions |
Business of Benefits: State Auto-IRAs and Federal Law: “We’ve already stepped on that rake…..” |
Behavior Gap: Three Guesses to Reach Your Goals |
The Chicago Financial Planner: Schwab Intelligent Portfolios: The Evolution of the Robo Advisor? |
The Trust Advisor: 4 Serious Retirement Plan Errors to Avoid |
Squared Away Blog: The Influence of Language on Saving |
RetirementRevised: Lump sum pension offers: Don’t count on your employer for advice |
Proskauer’s ERISA Practice Center Blog: Fiduciary Breach Claim Based On Oral Representation Can Proceed |
Behavior Gap: Ideas for People Who Use Money: What If I Don’t Want to Retire? |
Data “Points”: The Gaps in Retirement Savings “Gaps” |
Scholarly Financial Planner: Choose to Seize All of the Marrow Out of Life |

Hot Tips from Popular Web Resources:
NAPA Net: How Did Participants React to Record Market Highs in February? |
NAPA Net: Warren Blasts Advisors at Senate Hearing |
NAPA Net: The Gaps in Retirement Savings Gaps |
NAPA Net: Study: Boomerang Children Hurt Boomers’ Retirement Prospects |
Motley Fool: These Disruptions Are Huge Threats to Your Retirement |
NAPA Net: Case of the Week: RMDs for 401k Plans |
NAPA Net: Reish on the Fiduciary Exemption for Commissions |
NAPA Net: SEC Aligns with White House on Need to Address Fiduciary Standards |
NAPA Net: DOL Extends Deadline on Annual 401k Investment Notices |
NAPA Net: For 401k Plans, It’s ‘Back to the Future’ |
NAPA Net: Perez to Congress: Full Steam Ahead on Fiduciary Proposal |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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