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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 7/3/15

July 06
00:03 2015

1020805_25983300_Trending_Topics_2015.07.06_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
The Hows, Whys, and Right and Wrong Way to Use Asset Allocation,” (, June 30, 2015) The future of true asset allocation may lie in understanding its past.

Compliance – Happy Less Independent Day:
Just another example of how the space between us and the Founding Fathers is growing.
Three Retirement Loopholes Seen Likely to Close,” (WealthManagement, June 30, 2015) One man’s “loophole” is another man’s hard earned money. Is “closing loopholes” just an Orwellian way to raise taxes without being held accountable for raising taxes?

Fiduciary – The Boat is Slowly Turning:
The great fiduciary fight is waning, and it appears those with the most money have won. As a result, traditional fiduciary articles are reappearing.
DOL Fiduciary Foes Said to Be Writing Best-Interest Standard Bill,” (ThinkAdvisor, June 29, 2015) Goes to show you the power of the purse when it comes to industry lobby groups.
Top 10 fiduciary errors and how to avoid them,” (BenefitsPro, June 29, 2015) This is about and four plan sponsors. It’s good to see fiduciary articles going back in this direction.
Insurance industry wants DOL to telegraph changes to fiduciary,” (InvestmentNews, June 29, 2015) When an article reads like an industry lobbyist’s press release, you know you’ve got an effective PR firm.
Fiduciary ambiguity is primary concern for advisers,” (Benefit News, June 29, 2015) It’s not so much the ambiguity as the all-inclusiveness of it. It’s just another industry lobby hit piece.
SEC Investor Advocate Fleming warns agency against diluting fiduciary standard,” (InvestmentNews, June 30, 2015) Here’s an SEC insider telling it like it is. Too bad he doesn’t have the dollars of those industry lobby groups, lest Washington actually listen to him.
DOL Open to Changes on Fiduciary Proposal,” (On Wall Street, June 30, 2015) Does this mean they’re going to finally put some teeth into it? Or are they merely going to water it down more to cater to the industry lobbyists?

Fees – What 408b-2 Can Teach Us About the Proposed Fiduciary Rule:
The DOL seems to think disclosure is the answer. It hasn’t worked for fee disclosure. What makes them think it will work for the proposed new Fiduciary Rule?
Here’s how much your 401k is really costing you,” (MarketWatch, June 30, 2015) An unbelievable 58% of 401k participants still aren’t aware their 401k plan pays fees. This is three years after mandatory fee disclosure. What does that tell you about the effectiveness of disclosure?
Why Bob Veres Is Wrong on Flat Fees,” (ThinkAdvisor, July 2, 2015) Get article by Bob Clark telling it like it is in the real world.

Investments – Coming Attractions: The Income Scam:
There’s a reason why focusing on income isn’t for more people: They simply don’t have enough money to afford it. But that doesn’t stop the big financial firms from selling their precious annuities.
Gen Y wants safe savings options, yet unfamiliar with annuities,” (Benefit News, June 29, 2015) For those keeping track, this article defines “Gen Y” as between 18 and 34, the precise age when “safe” doesn’t mean “safe.” Why are they thinking this way?
Milevsky’s Bold Plan to Reinvent Retirement Income,” (ThinkAdvisor, June 29, 2015) A tontine for an annuity? Why not? There are plenty of worse ideas.
Why It’s Smart For Retirees To Bulk Up On Stocks,” (Forbes, June 29, 2015) An excellent reminder that “income” is a false siren (indeed, as we’ve profiled, it’s one of the “7 Deadly Sins” – see “7 Deadly Sins Every ERISA Fiduciary Must Avoid: The 1st Deadly Sin – ‘Income Matters’,”, May 24, 2011). Retirees needs to understand that, unless they possess a critical mass of wealth (which would make them among the super-wealthy), they’re going to need a portfolio designed for total return, not income.
QLACs mark first year in traditional IRAs,” (MarketWatch, June 30, 2015) Could it be that the reason why longevity annuities have gotten off to such a slow start is that income isn’t the right objective for most retirement savers?
Millennials want in on annuities,” (USA Today, June 30, 2015) Well, this either means young adults have no clue about matters involving saving and investing or this was the result of a survey conducted by some group promoting annuities. Or, as you might surmise after reading the article, both.
Can Value Investing Still Trump Growth?” (Financial Planning, July 1, 2015) Kind of a misleading headline. A better one might have been “When will Value Investing Stop Trumping Growth?” as the contents of the article really point out how value has a dramatic premium over growth. Of course, everything goes in cycles, so…
Asset allocation is dead–long live asset allocation,” (BenefitsPro, July 1, 2015) A better way to allocate assets.

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.
Young Workers Are Not Saving For Retirement,” (Financial Advisor, June 30, 2015)
Total retirement assets near $25 trillion mark,” (BenefitsPro, June 30, 2015)
Leakage from 401k loans, defaults is greater than thought,” (BenefitsPro, July 1, 2105)
Rebalancing Client Portfolios? Don t Forget Social Security, (On Wall Street, July 2, 2015)
401k brokerage account holders: More male, wealthy and active,” (Employee Benefit News, July 2, 2015)
Retirement Income: Time for a Social Security Check Up?” (On Wall Street, July 2, 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.
This Problem Is Unexpectedly Crushing Many Retirement Dreams,” (Money, June 25, 2015)
For Couples, Not Talking About Money Can Be Costly,” (Wall Street Journal, June 26, 2015)
Why Social Security’s Estimate Might Be Wrong,” (Forbes, June 26, 2015)
Couples have to negotiate their visions of retirement,” (USA Today, June 28, 2015)
4 Important Things You Need to Know About Social Security,” (Yahoo, June 30, 2015)
Planning can help avoid mistakes with Social Security,” (USA Today, June 29, 2015)
The REP. Index: Retirement Then and Now,” (WealthManagement, June 30, 2015).com
6 Ways to Increase Your Retirement Rental Income,” (US News, June 30, 2015)
When a Client Wants to Retire, Remarry and Move,” (Wall Street Journal, June 30, 2015)
Social Security: When to Start at 62,” (On Wall Street, July 2, 2015)

Wisdom from Some of Our Favorite Blogs:
Scholarly Financial Planner: Disclosure is Not Enough: Fiduciaries and the No Conflict Rule |
The Trust Advisor: Millennials Still Have Debt, are Still Scared of the Stock Market, Goldman Sachs Finds |
Proskauer’s ERISA Practice Center Blog: U.S. Supreme Court Says “Regular Review” of ERISA Investments Required |
The Trust Advisor: You Don’t Need to Buy the Latest Newfangled Index ETF to Retire Comfortably |
Squared Away Blog: Once-Jobless Boomers Still Struggling |
Fiduciary Matters Blog: Supreme Court Declines to Hear “Would Have” vs. “Could Have” ERISA Case |
Business of Benefits: Fiduciary Liability for 403(b) Non-ERISA Plans? |
Proskauer’s ERISA Practice Center Blog: Supreme Court Denies Review of Fourth Circuit Loss Causation Case |
The Trust Advisor: Wealthy Suffer From ‘Estate-Planning Fatigue’ |
Behavior Gap: Telling Stories That Blur the Numbers |
The Trust Advisor: Has SCOTUS Created a Way to Get Around the Estate Tax? |
Squared Away Blog: Top Blog Topics: Financial Ed, Retirement |
Scholarly Financial Planner: What Will It Take for Me to Buy My First EV? |
The Trust Advisor: 5 Reasons Millennials Don’t Trust Financial Planners |
Data “Points”: 4 Steps Toward Financial Independence |
Behavior Gap: Ideas for People Who Use Money: What Do We Really Know? |
Data “Points”: 6 Questions to Ask at Your Next Investment Committee Meeting |

Hot Tips from Popular Web Resources:
Morningstar: 7 Retirement-Portfolio Withdrawal Mistakes to Avoid |
The Motley Fool: Max Out Your 401k Contribution in 2015, and You’ll Thank Yourself Later |
NAPA Net: SEC Turns Attention to Retirement Savings |
NAPA Net: A Look Inside Self-Directed Brokerage Accounts |
NAPA Net: Population Shifts Have Implications for Advisors |
NAPA Net: Where Would You Most Like to Vacation This Summer? |
The Motley Fool: Make Your Social Security Check Bigger With These 3 Simple Tips |
NAPA Net: 4 Steps Toward Financial Independence |
NAPA Net: CITs Top Investment Vehicle Among Big DC Plans |
NAPA Net: SCOTUS Takes a Pass on Stock Drop Case |
NAPA Net: Case of the Week: Roth IRA Beneficiary Options |
NAPA Net: Most TDF Mutual Fund Assets in DC Plans, IRAs |
NAPA Net: The Course of Human Events |
NAPA Net: Surveys Say: Bright Futures, Leisure Time ‘Suits,’ But Still Worried About Retirement |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA


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