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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 5/1/15

May 04
00:03 2015

1020805_25983300_Trending_Topics_2015.05.04_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 Improve 401k Participant Fee Disclosure,” (, April 28, 2015) They say less is more, and nowhere is that more true than in 401k participant fee disclosure.

Compliance – They’re Coming to Take Your Retirement Account Away. Ha-ha! Ho-ho! Hee-hee!:
They came for the health care industry and we didn’t complain. They came for the internet industry and we didn’t complain. Now they’re coming for the retirement industry. Is there anyone left to complain?
Senate Democrats Push Back on Obama Plan to Tighten Broker Rules,” (Bloomberg Business, April 24, 2015) Because Democrats need PAC money, too. But, seriously, this thing is 100% in the hands of the politicians now. It’ll be interesting to see if this spills over into the Democrat presidential primary. In the meantime, more and more industry professionals – no matter on which side of the coin they sit – no longer support the DOL’s botched effort. And, still, where is Phyllis Borzi in all this?
Lawmaker wants mandated employer contributions,” (BenefitsPro, April 24, 2015) This is the beginning of the nationalization of the retirement industry. There are so many things wrong with this proposal, we don’t know where to begin. All we can say is this will eventually happen. The justification is that same as the reason for nationalizing health care: Not everyone has a retirement plan. Hmm,.,.  where have we heard that before?
Military Retirement Overhaul Calls for DC, DB Blend,” (ThinkAdvisor, April 28, 2015) At the same time the government is pushing pensions on the private sector, it’s pealing pensions off from its most popular (and successful) retirement plan and mixing more of a defined contribution blend.
When the intranet is not enough: Rules for electronic disclosure of plan documents,” (Employee Benefit News, April 30, 2015) Views from an ERISA attorney.

Fiduciary – Jab, Jab, Uppercut, Uppercut, Left, Right:
The gloves are still on at this point, but they’ll be coming off any moment now.
More plan sponsors oblivious to fiduciary awareness,” (BenefitsPro, April 27, 2015) Maybe because no one really holds them accountable?
Senate’s Warren Targets Broker Perks For Selling Annuities,” (Financial Advisor, April 27, 2015) This will get interesting. Will Warren use this as a foundation for a presidential bid? Will brokers discover there’s a downside to calling themselves advisors? After all, brokerage firms, like car dealers and any other product sales oriented business, are free to offer outlandish incentives to their most productive sellers, but fiduciary advisers have long been prohibited from this activity.
AARP storms Capitol Hill over fiduciary standard,” (BenefitsPro, April 28, 2015) Finally, a grass roots effort to support the fiduciary standard. What’s not clear is if the 26,000 people who signed this position against conflicts-of-interest realize the DOL’s proposal allows those conflicts to continue.
How a Loophole Could Gut the Department of Labor’s Proposed Fiduciary Rule,” (US News, April 29, 2015) Someone had to say it.
Brokerage firms no longer able to avoid fiduciary responsibility,” (Employee Benefit Views, April 30, 2015) But only if they want to call themselves “advisors.”

Fees – An Interesting Conundrum:
All other things being roughly equal, is it ever in your best interests to use a competitors service instead of your own? Let’s up the ante. Is it ever in your best interests to pay a lower fee and risk losing your job? We imply no answers here, we’re just asking a thought-provoking question.
DOL Sues Bank for Excessive Retirement Plan Fees,” (PLANSPONSOR, April 29, 2015) This will be a fascinating case, in part because of the self-dealing aspects of it.

Investments – Let’s Start Calling Them What They Really Are:
They’re products, not investments. OK, we’ll concede you can call them “investment products.” But, fundamentally, they’re still products. And a product is a lot different than an investment.
How your bond portfolio can survive higher rates,” (MarketWatch, April 23, 2015) It never really says.
This Retirement Investing Tool Might Actually Be Working,” (Bloomberg Business, April 24, 2015) Until it doesn’t, which is pretty much what this article says about target date funds.
Are Longevity Annuities Ready for Prime Time?” (Financial Planning, April 27, 2015) As the article says, just because you build it doesn’t mean they would (or should) come.
Some Investors Can’t Wait for the Fed to Raise Rates,” (Wall Street Journal, April 28, 2015) Because higher rates means the bank will actually pay you for the privilege of holding your hard earned cash.
How to know if a variable annuity is right for you,” (MarketWatch, April 28, 2015) A good breakdown of the pros and cons of variable annuities. Actually, it’s good for the pros (as in “professionals”) as well as the cons (as in “consumers).

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.
Fewer new 401k plans in 2013,” (BenefitsPro, April 27, 2015)
Wealthy millennials want automated retirement,” (BenefitsPro, April 28, 2015)
Record number bump up 401k contributions,” (BenefitsPro, April 28, 2015)
401k success hinges on employer guidance, flexibility,” (Benefit News, April 29, 2015)
Employee savings buoyed by better plan participation,” (Benefit News, April 29, 2015)
Employers To Chip In More 401k Dollars,” (Forbes, April 30, 2015)
Savings Plan Key to Retirement Confidence,” (ThinkAdvisor, April 30, 2015)
New generation requires new retirement thinking,” (Employee Benefit News, May 1, 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.
Voices: Dean Hedeker, on a Way Around New IRA Rollover Restriction,” (Wall Street Journal, April 22, 2015)
How to avoid outliving your retirement savings,” (CNN, April 22, 2015)
How Do Higher Interest Rates Affect Retirees?” (Forbes, April 23, 2015)
Is your 401k on track for a secure retirement?” (CNBC April 24, 2015)
Retirement investing: Combining correlation and compromise,” (MarketWatch, April 25, 2015)
For Retirement – or Any Savings Goal – Be Lazy, Self-Centered,” (DailyFinance, April 25, 2015)
Friends are OK, as we cruise toward retirement,” (InvestmentNews, April 27, 2015)
Most workers not sure about retirement,” (BenefitsPro, April 27, 2015)
A triple play that Social Security called right,” (MarketWatch, April 27, 2015)
Can I Put My Required Minimum Distribution into a Roth IRA?” (Money, April 28, 2015)
Gallup Poll: Workers Counting On Social Security More Than In 15 Years,” (Forbes, April 29, 2015)
5 Reasons Boomers Should Consider a Roth,” (US News, April 29, 2015)
Answer These 10 Questions to See If You’re on Track to Retirement,” (Money, April 29, 2015)
Plan Sponsors Are Getting the Retirement Message,” (PLANSPONSOR, April 29, 2015)
Don’t give in to bond market hysteria,” (CNN, April 29, 2015)
For boomers, it’s the retirement plan that never happened,” (CNBC, April 30, 2015)
The Cost of ‘Not Yet’ Saving for Retirement,” (Fox Business, April 30, 2015)
How the Internet of Things Will Transform Retirement,” (Wall Street Journal, April 30, 2015)
4 ‘what ifs’ that may change how you plan for retirement,” (MarketWatch, April 30, 2015)

Wisdom from Some of Our Favorite Blogs:
The 401k Plan Blog: The DOL’s Conflict of Interest Rules – Summarized and lots of links! |
ERISA Lawyer Blog: IRS Finalizes Amendments To The Regulations Under Section 162(m) |
Squared Away Blog: Around 50, U.S. Workers’ Earnings Fall |
Behavior Gap: We Don’t Need to Force Our Decisions |
Fred Reish: What’s Hot . . . in the First Quarter of 2015? |
ERISA Lawyer Blog: First Circuit Rules That Administrator’s Decision To Deny Benefits From A “Top Hat” Plan (Subject To ERISA) May Be Entitled To Deferential Review |
Boston ERISA Law Blog: Should Company Officers Run Retirement and Other Benefit Plans? |
Squared Away Blog: TDFs Appeal to the Most Inexperienced |
Behavior Gap: Ideas for People Who Use Money: Do You Have a Steady Income? |

Hot Tips from Popular Web Resources:
NAPA Net: Perez Nixes Comment Period Extension |
NAPA Net: 7 Signs You Might Have Missed the Latest Leadership Evolution |
NAPA Net: What’s the Best — and Worst — Career Choice? |
NAPA Net: Finances at the End of Life |
Kiplinger: 101 Most Popular Mutual Funds for 401k Plans |
NAPA Net: ‘Game Changer’ Part II: A Fourth Standard of Care |
NAPA Net: 4 Things Your Plan Sponsor Clients Should Know |
NAPA Net: Does Plan Design Influence Participant Loan Behavior? |
NAPA Net: Lawmaker Wants to Mandate Retirement Plans, Employer Contributions |
NAPA Net: Employers’ Lack of Fiduciary Awareness = Opportunity for Plan Advisors |
NAPA Net: Case of the Week: State-Sponsored Retirement Plan Proposals |
NAPA Net: Affluent Investors Diversifying Financial Services Relationships |
NAPA Net: TDFs a Big Draw for Contributions, Fund Transfers |
Motley Fool: 3 Money Mistakes to Avoid Once You Reach Full Retirement Age |
NAPA Net: Warren to Investigate Rewards and Incentives Offered to Annuities Dealers |
NAPA Net: DOL Files Excessive Fee Lawsuit |
NAPA Net: Numbers Don’t Lie on Auto-Enrollment |
NAPA Net: April Showers Good for 401k Balances? |
NAPA Net: What’s Keeping Top Plan Advisors up at Night? |
NAPA Net: The Best Job? Investment Manager |


Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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