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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 8/7/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 8/7/15
August 10
00:02 2015

1020805_25983300_Trending_Topics_2015.08.10_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
Square Peg QLACs Can’t Seem to Fit in 401k Fiduciary Round Hole,” (, August 4, 2015) The numbers suggest the QLAC product isn’t quite ready for prime time.

Compliance – The Never Ending Oliver Hardy Moment:
There’s always a moment when Oliver Hardy turns to Stan Laurel and say, “This is another fine mess you’ve gotten me into!” When it comes to the regulatory morass we call retirement, this is definitely an Oliver Hardy moment.
Retirement Problem Spans Coast to Coast,” (PLANSPONSOR, July 30, 2015) Normally this would go in the “Major Plan Sponsor” category but this is more of a subtle plug for pension plans. The problem, though, isn’t the lack of pension plans, it’s the lack of retirement saving.
3 bad choices a DC plan lets you make,” (BenefitsPro, July 31, 2015) There are good ones, but if you’re objective is to push pension plans, you only want to emphasize the bad choices. Here’s the kicker, though: These choices are only bad if you didn’t save enough money. Maybe we don’t need more pension plans, maybe we need more automatic enrollment plans.
Despite slight improvement, we need to fix Social Security now,” (MarketWatch, July 31, 2015) Just another “inside the box” (or is it inside the Beltway?) approach to “fixing” Social Security. Before we repeat the same lost opportunity of the 1980s, can’t we find someone with the courage to think outside the box?
Newly Elected FINRA Leader Raises Fiduciary Hackles,” (OnWallStreet, August 3, 2015) So the regulators are supposed to protect the regulated, not the investors.
Retirement savings shortfalls becoming state problem,” (Benefit News, August 3, 2015) Hmm, when we skimmed it we must have missed the part in the Constitution that said the states are responsible for individuals making poor personal choices.
Christie: Increase Retirement Age by 2 Years Over Next 25 Years,” (Bloomberg, August 3, 2015) This surprises no one.
IRS and Treasury say no more lump-sum offers,” (MarketWatch, August 3, 2015) Expect this to be one of the very first regulations reversed under a new Republican administration. De-risking has helped companies reduce potentially hazardous liabilities and it has helped retirees gain greater financial independence by taking direct control over their own retirement assets, in addition to reducing their risk associated with relying on the sustainability of a corporate pension.
The Retirement Expert Who Got Death Threats For Her Ideas,” (Financial Advisor, August 4, 2015) The article doesn’t give any specifics about “death threats” but manages to bring the TEA Party into the discussion anyway [Editor’s Note: Bloomberg, the source of this article, later redacted the TEA Party reference after contacted the writer and the editors asking how the allegation was sourced.] The piece is a puff piece on Teresa Ghilarducci’s view of utopia, which apparently includes taking your retirement savings away from the individual and placing into one huge government pension plan. She must be really impressed with the economic viability of Social Security.
Listen up, candidates: Social Security is broken,” (CNBC, August 4, 2015) Yep, no foolin’.
State-run pension system is a ticking time bomb,” (Benefit News, August 5, 2015) Tell us something we don’t know.
Withdrawal liability is mounting for multiemployer pension plans,” (Benefit News, August 6, 2015) Perhaps now we can see why folks prefer to opt for the lump-sum payout rather than risk losing it all (or at least a big chunk) in an underfunded pension.

Fiduciary – Kitces Hits a Homer:
Check out the “Catch-22” article. If you’ve ever wanted to see the rhetorical equivalent of a knight fork in chess, Michael Kitces delivers it with the precision of an oratorical surgeon.
DOL Exec Takes Aim At Critics Claiming Fiduciary Rule Would Harm Small Savers,” (Financial Advisor, July 20, 2015) This one’s worth the read just for the comment. But, actually, someone’s gotta say this and it’s more than the DOL that’s saying it. Small fiduciary advisers have been saying this for years, yet the big brokers keep repeating their tired mantra, having learned from Goebbels that a lie repeated often enough eventually becomes accepted as the truth.
DOL fiduciary rule opponents shift strategy,” (BenefitsPro, July 31, 2015) All they are asking is for the DOL to scrap their proposal and start over. That’s all. Who knows? It worked last time.
Time for Wall Street to Show Investors Their Trust Matters,” (ThinkAdvisor, August 4, 2015) More common sense from Knut Rostad.
Big Guns To Spar Live On Fiduciary Rule,” (Financial Advisor, August 5, 2015) The DOL sponsors The Main Event with industry lobbyists arguing the anti and a medley of other groups arguing the affirmative. Nowhere to be seen is the third group – the one that recognizes the DOL’s admittedly unenforceable proposed rule both fails to level the regulatory playing field and eliminate the asset-sucking costs of conflicts-of-interest.
DOL fiduciary rule puts broker-dealers in Catch-22,” (BenefitsPro, August 5, 2015) Michael Kitces asks a brilliant question: How can the proposed rule cause small investors to lose their “advisor” if, legally, brokerage firms cannot currently offer advice in the first place?
DOL to launch marathon of hearings on fiduciary rule,” (InvestmentNews, August 6, 2015) If you thought the prime-time Republican debate was unwieldy, just wait until you see this.

Fees – Are Fees Just a Fad?:
How else to explain the dearth of articles?

Investments – What Does the Media Treat Worse – Donald Trump or Equities?:
At least equities never got accused of calling Rosie O’Donnell a “fat pig.” Still, there remains an utter lack of respect for the asset class that best butters our retirement bread. Why is this so?
Here’s the Best Way to Invest a Roth IRA in Your 20s,” (Money, July 30, 2015) For all you pros out there, how many investing myths can you expose in this article?
Better Ways to Allocate Retirement Portfolios,” (OnWallStreet, August 3, 2015) This article will look vaguely familiar to those who read the series on asset allocation that ran in June. In particular, compare the analysis in this article versus the one in “The Hows, Whys, and Right and Wrong Way to Use Asset Allocation,”, June 30, 2015).
How to maximize retirement paychecks,” (Employee Benefit News, August 3, 2015) Just another sales pitch for annuities.
State Pension Plans Putting Politics Above Retirements,” (Financial Advisor, August 3, 2015) This is about investing too much in local companies. It’s not a bad idea to throw a small amount into hometown heroes, but, as Aristotle advised, “all things in moderation.”
Boomers face hidden danger in 401k plans,” (Employee Benefit News, August 4, 2015) Again, fear mongering about over-exposure to the equity markets for people who still need to invest for the long term.
Many boomers’ 401k plans are way out of balance,” (MarketWatch, August 4, 2015) Despite the alarmist headline, this article actually says the right thing. Stocks aren’t bad, even if you’re retired. The key is to have near-term money needs in safe (i.e. stable value) assets.
MyRAs, QLACs compete with New Coke for epic FAIL title,” (BenefitsPro, August 5, 2015) Why are these recent retirement plan product “innovations” quickly heading the way of the Edsel? When was the last time a research-driven product (as opposed to a market-driven) product sold well in the financial marketplace? And was that really good for the typical investor?
Annuities meaningless if savings practically zero,” (Employee Benefit News, August 6, 2015) Oops, someone forgot to take this into account. Guess it’s back to the drawing board.
Is Social Security a ‘Bond’ in Your Portfolio?” (Yahoo Finance, August 6, 2015) This is not a new idea.

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.
Slott: IRA Pitfall to Avoid,” (Financial Planning, August 3, 2015)
Roth IRA investors a different animal,” (BenefitsPro, August 3, 2015)
The End of the 401k?” (ThinkAdvisor, August 3, 2015)
Massive turnover of 401k plans possible in 2016,” (BenefitsPro, August 4, 2015)
4 ways to a leak-proof 401k plan,” (Employee Benefit News, August 4, 2015)
Employer involvement in 401k drives employee engagement,” (Benefit News, August 7, 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.
It’s never too early—or late—to plan for your retirement years,” (CNBC, July 30, 2015)
Living In Low Cost State Could Backfire For Retirees, Warns Think Tank,” (Financial Advisor, July 30, 2015)
Personal finance Q&A: Saving for retirement should be primary goal,” (LA Times, August 2, 2015)
Seven demands retirees should place on their money,” (MarketWatch, August 3, 2015)
How to Save for Retirement at Your First Job,” (US News, August 3, 2015)
Are Your Aging Parents Less Financially Savvy Than A High School Dropout?” (Forbes, August 3, 2015)
What to know about inheriting an IRA,” (CBS News, August 3, 2015)
How A Couple Of ‘Frugal Weirdos’ Are Saving 71% Of Their Income So They Can Retire At Age 33,” (Forbes, August 4, 2015)
A Retirement Fund ‘Top Heavy’ With Stocks Could Be Risky For Boomers,” (MainStreet, August 4, 2015)
Aging parents and adult kids compete for retirement savings,” (BenefitsPro, August 5, 2015)
How to play catch up with your retirement savings,” (CNN, August 5, 2015)
Should retirees shoulder the risk or transfer it?” (MarketWatch, August 5, 2015)
Do You Have A Transportation Plan For Retirement?”(Forbes, August 5, 2015)
Can Your Boomerang Kid Ruin Your Retirement?” (TheStreet, August 5, 2015)
Living With Your Adult Child? Charge Rent or Retire Poorer,” (ThinkAdvisor, August, 6, 2015)

Wisdom from Some of Our Favorite Blogs:
Proskauer’s ERISA Practice Center Blog: Eleventh Circuit Again Affirms Dismissal of Stock Drop Claim Against Delta Air Lines |
Data “Points”: Are You Exploiting Naïve Myopic Workers With That Employer Match? |
The Chicago Financial Planner: What I’m Reading – NFL Training Camp Edition |
Behavior Gap: How Do You Define Enough? |
Boston ERISA Law Blog: Seeking Shelter from the Storm: the Washington Post on Retirement Readiness |
The Chicago Financial Planner: Small Business Retirement Plans – SEP-IRA vs. Solo 401k 2015 Update |
Pension Risk Matters: Beauty Makeovers and the Retirement Industry |
Behavior Gap: What’s the Price of Your Attention? |
The 401k Plan Blog: What’s a Plan to Do? |
fi360: Understanding Marketing Volume IV: SEO and SEM |
Squared Away Blog: Retirement Researchers Convene Today |
ERISA Lawyer Blog: IRS Says That Small Business Can Get IRS Penalty Relief For Unfiled Retirement Plan Returns |
Behavior Gap: Be Happy. Limit Your Options |

Hot Tips from Popular Web Resources:
Kiplinger: How to Fix 3 Retirement-Savings Flaws |
Motley Fool: Did You Apply for Social Security Too Early? Here Are Two Things You Can Do About It |
NAPA Net: Have You Ever Fired a Client? |
NAPA Net: Do Advisors Have The Right Stuff? |
NAPA Net: Will All Plan Advisors Be Required to be Fiduciaries? |
Kiplinger: Retirees, Consider This Valuable New Strategy for Passing IRAs to Your Heirs |
NAPA Net: Things Heat Up for 401k Balances in July |
NAPA Net: What Plan Sponsors Should Know About Changing Providers |
NAPA Net: What’s Driving Provider Changes? |
NAPA Net: IRS Shuts Down Email Questions to Employee Plans Office |
NAPA Net: Various Groups Back Fiduciary Proposal |
NAPA Net: Qualified Plans and the One-Rollover-Per-Year Rule |
NAPA Net: “Perfect Storm” Pressures Pension Plan Sponsors to Act |
NAPA Net: Roth IRAs, TDFs, Growing Among Younger Workers |
Kiplinger: How Much Social Security Will You Get in Retirement |
NAPA Net: Target Date Funds Not for Everyone |
NAPA Net: Revenue-Sharing Case Closes With a Whimper, Not a Bang |
NAPA Net: Automatic Solutions, Calculators Lifting Savings Rates |
NAPA Net: Medicare Premiums a Key Factor in Plan Design |
Kiplinger: Make Penalty-Free Withdrawals From Your Retirement Accounts |
NAPA Net: Readers Weigh in on the Client Firing “Experience” |
NAPA Net: Labor Department Unveils Agenda for Fiduciary Rule Hearings |
NAPA Net: African-Americans Less Likely to Participate, Work with Advisors |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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