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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 8/21/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 8/21/15
August 24
00:08 2015

1020805_25983300_Trending_Topics_2015.08.24_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: Congressman Tom Marino says ‘Young Working Americans Can Get Excited About’ Child IRA,” (, August 18, 2015) In this amazing interview, each answer could write its own headline!

Compliance – Rethinking Government’s Role in Retirement Planning:
It’s beginning little by little, but there’s a growing chorus among experienced financial pros that are questioning some of our decades-old thinking on government retirement policy. Will these veterans and their outside-the-box thinking ever trump the old dinosaurs and the too-young-to-know-better crowd? Only time will tell. But hopefully before it’s too late.
Better IRAs for Small Business Employees Are on the Way,” (Time, August 13, 2015) Is this the future of Social Security or the beginning of creating a retirement plan mess akin with the state-by-state health insurance morass Donald Trump has exposed?
Social Security at 80: How’s it doing?” (CBS News, August 17, 2015) Here’s a hint: The current actuarial tables suggest it won’t survive to see its 100th birthday.
What should government’s role be in retirement planning?” (BenefitsPro, August 18, 2015) Right now we have three easily identifiable issue that need addressing. Government can either lead, follow, or simply get out of the way.

Fiduciary – Does It Even Mean Anything Anymore?:
With all the charges and counter-charges and the politics and the lobbying, the whole discussion is devolving into some sort of weird nineteenth century French farce.
Investment manager liable for retirement plan losses,” (BenefitsPro, August 17, 2015) It’s not just the plans sponsors and product vendors who can get into trouble.
DOL Fiduciary Opponents Pin Price on Proposal: $3.9B,” (Employee Benefit News, August 18, 2015) So, let’s see, subtract this number from the estimated $17B in annual savings the Rule will bring and that nets out to a positive $13B for the first, $17B annually thereafter. Sounds like a good trade off.
Arthur Levitt: SEC Deadlocked on Fiduciary, Advisors Need DOL Rule,” (ThinkAdvisor, August 21, 2015) Or is it time to rethink the nature and purpose of the 1940 Investment Advisers Act? Do we still need it? Do we still want it? Why was it created in the first place?

Fees – Again, It’s Not Simply that Fees Matter:
It’s “which” fees matter. (Only an editor will get this joke.)
How Not to Conduct a Legitimate Study on DOL Fiduciary Costs,” (ThinkAdvisor, August 18, 2015) Ouch! Bob Clark nails it. So this is what it sounds like to tell the Emperor he’s naked.
Trial Date Set for Boeing 401k Fee Case,” (Plan Adviser, August 18, 2015) What do we need the DOL for when we have trial lawyers. Wait, isn’t this how the DOL has said their proposed rule will be enforced?
Mutual Fund Expenses Lower Within 401k Plans,” (PLANSPONSOR, August 19, 2015) More importantly, is the performance better, because if it isn’t then it doesn’t matter what the expense ratio levels are. Furthermore, if it is better, why are retail investors subjected to higher expense ratios?

Investments – Speaking of Keeping Things Simple:
There’s an old adage that says “Never trust a contract that’s more than one page long.” The same holds for investments. If it takes more than ten words to describe it, then just skip it.
Five tips for when you want to exchange your annuity,” (MarketWatch, August 13, 2015) Good tips but they still leave you in an annuity.
Is Your 401k Fund Line-Up Biased?” (Forbes, August 18, 2105) They must have re-released this study, because we reported on it in 2013 (see “Study: SEC Fiduciary Delay Costing Retirement Investors $1 Billion per Month,”, February 12, 2013). Maybe we should change our slogan to: – We Print the News Before It Happens.
Why target-risk funds are wrong for 401k plans,” (Employee Benefit News, August 19, 2015) Apparently, the author believes two different people should be invested the exact same way merely because of the coincidence of age, even though they have two extremely different Goal-Oriented Targets. We’ve reported on this before, target date funds are inherently more risky than lifestyle (i.e., target “risk” funds).
How Private Equity Funds Could Jeopardize Your Retirement,” (DailyFinance, August 19, 2015) And, yet, the article doesn’t really connect the dots in a meaningful way to explain why. We’ll just call it “taking your eye off the ball.”

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.
Retirement savings make progress, with caveats,” (CBS News, August 13, 2015)
Turnover on the horizon in 401k market?” (BenefitsPro, August 17, 2015)
Boomers Drive IRA Rollover Surge, Advisors Lead Pack as Recipients: Cerulli,” (ThinkAdvisor, August 17, 2015)
Americans Looking For Retirement Plan Guidance, Survey Says,” (Financial Advisor, August 18, 2015)
Do auto features drive better retirement outcomes?” (Benefit News, August 18, 2015)
Retirement Plan Participants Unhappy With Plan Sponsors,” (ThinkAdvisor, August 18, 2015)
We aren’t saving for retirement,” (BenefitsPro, August 18, 2015)
How employers can boost retirement savings,” (CNBC, August 18, 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.
A 3-step plan to getting the retirement income you need,” (CNN, August 13, 2015)
Can ‘file and suspend’ boost your Social Security benefits?” (CNBC, August 13, 2015)
Delaying Social Security may boost Medicare costs,” (InvestmentNews, August 17, 2015)
Three tips for personal-debt settlement,” (MarketWatch, August 17, 2015)
From ‘buckets’ to ‘paychecks,’ advisors explain portfolio tacks,” (CNBC, August 17, 2015)
Stretching retirement savings beyond the stretch,” (MarketWatch, August 17, 2015)
Social Security Q&A: How Do IRA Withdrawals Affect My Social Security?” (Forbes, August 18, 2015)
The Price You Pay When Adult Children Move Back Home,” (Fox Business, August 20, 2015)
Retirement Confidence Dips; Workers Not Counting on Social Security,” (ThinkAdvisor, August 20, 2015)

Wisdom from Some of Our Favorite Blogs:
Nerd’s Eye View: Essential Requirements In Crafting A One-Page Financial Advisor Business Plan |
ERISA Lawyer Blog: Eighth Circuit Comments On Successor Liability For Delinquent Contributions and ERISA Violations |
Data “Points”: Why the ‘Ideal’ Plan Isn’t Always |
Data “Points”: 3 Things Plan Sponsors Should Know About Changing Providers |
Squared Away Blog: The Future of Retirement Is Now |
Behavior Gap: Tell Someone: How Accountability Makes a Difference |
Behavior Gap: Choose Healthy Accountability, Avoid Stupid Competition |
Boston ERISA Law Blog: Defensive Plan Building, Otherwise Known as “Minimizing Legal Risks in the Design, Implementation and Administration of Employee Benefit Plans” |
The 401k Plan Blog: The Directed Trustee Loophole |
Pension Risk Matters: Fiduciary Standard Thrust and Parry Continues |
The Chicago Financial Planner: The Risks of Too Much Company Stock in Your 401k Plan |
Behavior Gap: What’s the “Why” Behind Your Money Decisions? |

Hot Tips from Popular Web Resources:
NAPA Net: Failure to Diversify Brings $15 Million Judgment |
NAPA Net: The Question(s) You Hate to Get |
NAPA Net: Will Elite Advisors Move Down Market? |
NAPA Net: Are DB Plans More Cost-Effective Than DC Plans? |
Morningstar: How to Take Required Distributions |
Motley Fool: 401k or IRA? How to Decide Where to Save for Retirement |
NAPA Net: Are You Ignoring Your Next Generation of Clients? |
NAPA Net: 7 Things Every ERISA Fiduciary Should Know |
NAPA Net: Vast Majority of Workers Favor AE |
NAPA Net: The Cost of Procrastination |
NAPA Net: Are Golfers Better Investment Managers? |
NAPA Net: Case of the Week: Alcatel-Lucent’s Lump-Sum Offer |
NAPA Net: What’s Driving IRA Withdrawals? |
NAPA Net: Female Breadwinners Not Thrilled With Advisors |
Kiplinger: Can I give an inherited retirement account to my mom? |
Motley Fool: Do You Need a Solo 401k? |
NAPA Net: Filling Your LinkedIn Restaurant with Quality Connections |
NAPA Net: Active U.S. Equities Experiencing Historic Outflows |
NAPA Net: DB-Style Investment Options Growing in 401k plans, and for Good Reason |
NAPA Net: Fiduciary Rule ‘Going to Change the Game’ |
NAPA Net: ‘How Can I Be a Fiduciary if I Don’t Want to Be One?’ |
NAPA Net: Training the Next Generation of Plan Advisors |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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