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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 6/12/15

June 15
00:02 2015

1020805_25983300_Trending_Topics_2015.06.15_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
7 Deadly Sins Every ERISA Fiduciary Must Avoid: The 5th Deadly Sin – Misapplied Asset Allocation,” (, June 9, 2015) Are our expectations of Asset Allocation too high? This is the first of a special five part series meant to be shared by professionals and non-professionals alike.
How’d an Innocent Fiduciary Like You End Up Asset Allocating?” (, June 10, 2015) Much of asset allocation marketing collateral is founded on a simple misinterpretation, yet this myth persists. Why?

Compliance – They’re Coming After You! And You! And You!:
Like mice scratching for every last crumb, the government revenue collectors (including regulators empowered to fine) leave no stone unturned. What’s under your stone?
EBSA audit quality review a wake-up call for plan sponsors,” (Benefit News, June 8, 2015) Here’s an interview with a couple of AICPA folks that may prove enlightening.
It’s Not About Timing: IRS on Backdoor Roth Conversions,” (Financial Planning, June 8, 2015) Even if the topic doesn’t strike you, read the article just to see how journalism is being done in the age of social media.

Fiduciary – He Said, She Said:
It’s not just a cliché, it’s a literal interpretation.
AARP delivers petitions on fiduciary standard,” (BenefitsPro, June 8, 2015) They amassed 5,000 signatures and they’re sending it to Chuck Schumer and Kirsten Gillibrand. Go Figure.
DOL Fiduciary Rule Out by May 2016: Lawyer,” (ThinkAdvisor, June 8, 2015) If they wait beyond that date, the new administration will squelch the rule before it’s had a chance to get off the ground. There’s a more interesting side story in this article about Elizabeth Warren attacking the DOL’s proposal from the left.
DOL fiduciary proposal feels heat as more industry players pile on,” (InvestmentNews, June 8, 2015) Doth the ladies protest too much? It’s getting to be downright silly what they’re saying. Will this damage their credibility in the long run, especially when their “sky is falling” predictions never pan out?
Fiduciary rule could impact brokers the most,” (Benefit News, June 9, 2015) But not for the reasons stated in this article. Brokers actually stand to gain as RIAs lose their one advantage – being able to differentiate themselves as “fiduciaries.” With the proposed rule, brokers can call themselves “fiduciaries” and retain their self-dealing business model, all for the price of “disclosure.”
Small-plan market to suffer under new fiduciary regime: U.S. Chamber of Commerce,” (Benefit News, June 10, 2015) This makes no sense, but, honestly, the Washington D.C.-based US Chamber of Commerce succumbed to the Beltway mentality long ago. It’s a far cry from its bread-and-brother brethren – the local Chambers of Commerce that dot the landscape of America in Flyover Country.
Chamber of Commerce study fatally flawed,” (Employee Benefit News, June 10, 2015) Point, meet counter-point.
Who is an ERISA fiduciary?” (Benefit News, June 11, 2015) As always, refreshers can be so – what’s the word? – “refreshing.”

Fees – Why Don’t We Talk, Mrs. Robinson?:
Well, if you keep on talking about the same thing, is it any wonder that’s all you talk about?
No Surprise – Fees Remain a Top Topic,” (PLANSPONSOR, June 11, 2015) Surprise! Survey says this is all people talk about!

Investments – The Emperor Looses a Garment:
There’s growing empirical evidence everything we’ve been taught about investments is wrong. But they money’s too good, so nobody seems to care.
Service providers biased towards their own mutual funds,” (BenefitsPro, June 5, 2015) How many red flags does this raise?
Will exposing the BHB myth destroy asset allocation?” (BenefitsPro, June 11, 2015) This will be considered a heretical piece by those practicing the asset allocation religion. But, be prepared, there’s worse news coming.

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.
Some Employers Hit the Reset Button on Workers’ Retirement-Plan Holdings,” (Wall Street Journal, June 4, 2015)
Drastic steps by employers bring retirement rebalancing,” (BenefitsPro, June 5, 2015)
Lacking in financial literacy, workers still value it,” (BenefitsPro, June 9, 2015)
E-delivery of plan documents said to boost retirement plan engagement,” (Benefit News, June 9, 2015)
DC plan participation rates rising, helped by auto-enrollment,” (Benefit News, June 11, 2015)
More Retirement Plans Embrace Auto-Enrollment,” (Wall Street Journal, June 11, 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.
Retirement is Dying,” (Trusts & Estates, May 29, 2015)
Save for retirement – or pay for children’s college?” (CBS News, June 4, 2015)
5 Reasons You Should Consolidate Your Retirement Accounts,” (Forbes, June 4, 2015)
CFPB weighs in on reverse mortgages,” (CNBC, June 5, 2015)
The Old Strategies Retirees Need to Unlearn,” (Wall Street Journal, June 5, 2015)
Travel in retirement without ruining your nest egg,” (USA Today, Jun 7, 2015)
Here’s what happens when you take out a loan on your 401k,” (MarketWatch, June 7, 2015)
Inadequate retirement savings a global issue,” (Benefit News, June 8, 2015)
3 Facts About Social Security Almost No One Knows,” (Money, June 8, 2015)
Student loan debt could destroy your retirement,” (MarketWatch, June 8, 2015)
5 signs you rely too much on Social Security,” (USA Today, June 8, 2015)
Forget Retirement: Older Single Women Love Their Jobs,” (ThinkAdvisor, June 8, 2015)
Why Clients Fail At Retirement,” (Financial Advisor, June 9, 2015)
4 big threats to your retirement,” (MarketWatch, June 9, 2015)
10 Awful 401k No-No’s You Should Avoid,” (Forbes, June 9, 2015)
The Risky Money Assumption Millennials Should Stop Making Now,” (Money, June 9, 2015)
Don’t Default On Student Loans, Think About Retirement Instead,” (Forbes, June 10, 2015)
Are Social Security Benefits Taxable?” (Time, June 10, 2015)
3 Key Trends That Could Reshape IRAs,” (OnWallStreet, June 11, 2015)
Dos and Don’ts for Your Final Working Year Before Retiring,” (DailyFinance, June 11, 2015)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: 7 Common Retirement Plan Mistakes |
Boston ERISA Law Blog: Déjà Vu All Over Again: Patenting Retirement Plan Features |
Squared Away Blog: Student Debt Burdens Non-Grads More |
Proskauer’s ERISA Practice Center Blog: SCOTUS Invites Solicitor General to Submit Its View on ERISA Venue Selection Provisions |
Behavior Gap: The Talk: What to Do About College |
Boston ERISA Law Blog: Susan Mangiero on Tibble and the Complexity of Monitoring Plan Investments |
Behavior Gap: Pick the Right Time to Have a Money Conversation |
ERISA Lawyer Blog: Employee Benefits-Eighth Circuit Rules That Taxpayer Engaged In A Prohibited Transaction, When He Used An IRA To Fund A Business Which Paid Him Wages |
Squared Away Blog: Get a Truly Free Credit Report |
Scholarly Financial Planner: Use of “Fee-Only” Inappropriately or Any Use of “Fee-Based” Can Violate Federal/State Laws |
Behavior Gap: Ideas for People Who Use Money: Does What You Buy Define You? |

Hot Tips from Popular Web Resources:
NAPA Net: CalPERS Looks to Trim External Managers |
NAPA Net: Building Trust and Collapsing Time |
NAPA Net: What’s the Best Retirement Song? |
NAPA Net: Bill Would Shift Participant Disclosure Defaults |
Motley Fool: 4 Ways You’re Sabotaging Your Retirement in Your 30s |
Morningstar: 6 Questions to Ask Before Relocating in Retirement |
NAPA Net: 5 Things You Need to Know About Retirement Readiness |
NAPA Net: Are Participants Ready for Electronic Disclosures? |
Motley Fool: What a Life Estate Is And How It Could Save Your Home |
NAPA Net: Is There a Patent on Automatic Enrollment? |
NAPA Net: Best Practices? Think Herd Mentality |
NAPA Net: Roths on the Rise |
NAPA Net: Case of the Week: DOL Fiduciary Investigation Guidelines |
Morningstar: How to Fine Tune Your Investment Mix in Retirement |
Kiplinger: Learn to Plan for Retirement Like a Pro |
NAPA Net: DOL Pushing to Finalize ‘Conflict of Interest’ Rule by May 2016 |
NAPA Net: NAPA Net the Magazine’s Special Outcomes Issue on its Way |
Morningstar: Need to Work in Retirement? Think Small |
NAPA Net: Millennials’ Retirement Safety Net: Loved Ones |
NAPA Net: Identity Theft Protection for 401k Plans? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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