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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/13/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/13/15
November 16
00:02 2015

Welcome 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. “When everybody’s a fiduciary…  no one is.”

FiduciaryNews Lead:
Will New DOL Rule Contain Fiduciary Surprise for 401k Recordkeepers?” (, November 10, 2015) While everyone’s talking about the potential impact the DOL’s proposed new Fiduciary Rule will have on IRAs and the brokerage industry, the greater impact may be on recordkeepers within the 401k industry.

Compliance – myRA Fallout Continues:
But it’s just the tip of the iceberg. Individual states managing private retirement plans is the real problem.
3 Things to Know About Obama’s New MyRa Retirement Plan,” (Money, November 4, 2015) Here’s the mass media view of the story.
Can myRa Bring Retirement Planning to the Masses?” (WealthManagement, November 4, 2015) Here’s the trade journal point of view. You can guess the answer to the headline question.
Firms Offering Social Security Advice Scramble to Update Systems,” (Wall Street Journal, November 5, 2015) No need to hurry. The rule doesn’t take effect until next year.
Is this the cure for America’s retirement ills?” (CBS News, November 5, 2015) A surprising stark assessment of the government’s latest gimmick to pretend to address an issue that is already being addressed better in the private sector.
The IRS wants to pay you to save,” (Employee Benefit News, November 6, 2015) Interesting juxtaposition given last week’s “launch” of myRA. Is this the beginning of an “incentive vs. mandate” debate? The start of a full fledge melee between those who believe in leading a horse to water and those who feel justified to compel said horse to drink that water? Stay tuned, fiduciary fans!
SIFMA Speaks Out Against State-Run Plans,” (Plan Advisor, November 6, 2015) ‘bout time somebody did!
Yes, Social Security is unfair, especially to women. But can it be fixed?” (Los Angeles Times, November 6, 2015) Misleading headline. The article profile how dual-income and single-income high earning families can profit from Social Security – even after the closing of the loophole. The best way to “fix” it is to eliminate spousal benefits. That has other issues, but they can be addressed on an exception by exception basis.
Corporate pension funded status gained in October,” (BenefitsPro, November 10, 2015)
Can myRa Bring Retirement Planning To The Masses?” (Financial Advisor, November 11, 2015) As the article states: “It’s a good start, but only if it leads to something bigger…much bigger in fact.”

Fiduciary – It’s Your Play, SEC:
Did we forget about them? Maybe they hoped we did, but we didn’t.
SEC Chairwoman White says agency is ‘full-out’ working on fiduciary rule,” (InvestmentNews, November 10, 2015) The delay is to avoid “unintended consequences.”
Deliberate or Just Slow? SEC is in No Rush on Fiduciary Rule,” (On Wall Street, November 10, 2015) Same story, different take, with quotes from Barbara Roper.
Fiduciary liability unclear when selecting and monitoring default retirement investments,” (InvestmentNews, November 12, 2015) Is it better to use age-based QDIOs when you know age doesn’t matter when it comes to growth needs or is it better to use a traditional demographic-based balanced fund when you know there are outliers within your employee universe? Plan sponsors want to know, but the DOL isn’t making it too clear what the answers are (and, more importantly, which the risks are).

Fees – A Good Try:
We’re getting closer to the truth.
Why You Should Check Your 401k Plan’s Fees,” (Wall Street Journal, November 8, 2015) For the most part, a pretty good article. It focuses on the correct fees to focus on, right up until the end, when it starts talking about mutual fund expenses rather than fees.

Investments – Focus on Interest Rates:
We’re at that part of the market cycle when stock picking and interest rate worries take the helm. Which way will investors steer their retirement savings ships?
Low interest rates make immediate annuities attractive,” (MarketWatch, November 4, 2015) This might not sell you.
Investing In Real Estate For Retirement Income,” (Forbes, November 4, 2015) Sure, but only if you like being a landlord.
5 Tips for Using Dividend Stocks to Pay for Retirement,” (US News, November 4, 2015) Ah, dividends, the old standby.
Don’t Let Stock Market Scares Dictate Your Strategy,” (Time, November 9, 2015) But you already knew this.
Your 401k may be skimping on this key investment,” (CNBC, November 10, 2015) Because you know it’s all ‘bout the alts, (Boom!) ‘bout the alts (Boom!) no plain vanilla.
The unfortunate side effect of shifting from DB to DC,” (Benefit News, November 11, 2015) This is a pitch for QLACs.
Active v Passive? The Unexpected Winner,” (Financial Planning, November 11, 2015) Not really a surprise given a 2005 study that already showed this.
When it comes to investing, it pays to keep it simple,” (MarketWatch, November 11, 2015) Amen, brother!

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 Plans: A Long Hike,” (, November 5, 2015)
Encouraging participants to roll assets into your plan can be a win-win,” (InvestmentNews, November 8, 2015)
Arguments To Justify A Delayed Claiming Age For Social Security,” (Forbes, November 10, 2015)
New DOL fiduciary rule may give advisers unexpected opening,” (BenefitsPro, November 11, 2015)
Did You Start Investing As Early As Most Millennials?” (Investors’ Business Daily, November 11, 2015)
How Millennials and Boomers Are Killing Gen X’s Retirement Savings,” (Money, November 11, 2015)
Are current income replacement ratios flawed?” (BenefitsPro, November 11, 2015)
Social Security Tips for the Astute Retirement Advisor,” (On Wall Street, November 12, 2015)
Using data to drive successful plan outcomes,” (Employee Benefit News, November 13, 2015)
Helping employees get on the right retirement track,” (Employee Benefit News, November 13, 2015)
3 retirement plan provisions to discuss with clients in 2016,” (Employee Benefit News, November 13, 2015)

Trends and Truths 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.
5 Smart Things to Do the Minute You Retire,” (Money, November 2015)
Five Myths About IRAs,” (Wall Street Journal, November 4, 2015)
Why the head of AARP thinks you shouldn’t retire,” (The Washington Post, November 5, 2015)
How Smart Retirement Investors Profited from the August Market Plunge,” (Time, November 6, 2015)
Baby steps to building a retirement,” (The Washington Post, November 6, 2015)
Don’t compare your savings to that of your peers,” (MarketWatch, November 9, 2015)
9 retirement planning deadlines you shouldn’t overlook,” (US News, November 9, 2015)
Working longer for more savings? Don’t count on it,” (InvestmentNews, November 10, 2015)
Earning Social Security on the Battlefield and the Home Front,” (Fox Business, November 10, 2015)
Millennials are a ‘generation lost’ when it comes to financial matters,” (BenefitsPro, November 10, 2015)
5 tax strategies to boost your retirement savings,” (MarketWatch, November 10, 2015)
Study: Student loans getting in the way of retirement,” (CBS News, November 11, 2015)
Why Market Timing is Especially Bad for Retirees,” (US News, November 11, 2015)
Will the retirement 4% rule work for you?” (CNN, November 11, 2015)
Nine tax-friendly ways to save beyond a retirement fund,” (CSMonitor, November 12, 2015)
What’s the right 401k contribution rate?” (Employee Benefit News, November 13, 2015)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: Investment Rate of Return Assumptions Matter|
Nerd’s Eye View: Robo-Advisors Squeeze Advisor Profits Not Fees |
The Retirement Plan Blog: IRS Announces 2016 Retirement Plan Limits: Most Remain Unchanged |
Behavior Gap: Exercise Your Idea Muscle |
ERISA Lawyer Blog: IRS Announces 2016 Pension Plan Limitations |
Squared Away Blog: Men Save More – Women Save Better |
Fiduciary Matters Blog: Case Against Novant Health Settles Early for $32 Million |
fi360: DOL Webinar:  Your Fiduciary Rule Questions Answered – Part 3 |
Fiduciary Path: Can Advise(o)rs Disclose Away Their Fiduciary Obligations? |
Fiduciary Path: How to Draw the Bright Line Between RIA Fiduciaries and Product Pushing, Conflicted Competitors |
Squared Away Blog: Mortgage Payoff? Freedom vs the Math |
ERISA Lawyer Blog: DOL Discusses Whether A Stop-Loss Insurance Policy Is An ERISA “Plan Asset” |
The 401k Plan Blog: Mailbag; What about Hedge Fund companies using their own hedge funds in their own 401k Plan? |

Hot Tips from Popular Web Resources:
Kiplinger: Earnings Test for Social Security Benefits |
NAPA Net: Stock Drop Appeal Comes Up Short — Again |
NAPA Net: What’s on the Quarterly Review Meeting Agenda(s)? |
NAPA Net: The ‘Birth’ of a Notion? |
The Motley Fool: Ignore the Retirement Alarmists: The 4% Rule Is Imminently Safe |
NAPA Net: Most Americans Afraid of… Advisors? |
NAPA Net: 7 Things You May Not Know About the Saver’s Credit (and 4 You Should) |
NAPA Net: For Commonwealth’s Mahan and Roche, the Future is Now |
NAPA Net: Morningstar Upgraded Rating of 1 Fund, Downgraded 7 in October |
Morningstar: 8 Questions About Social Security Claiming Strategies |
NAPA Net: Bill Looks to Shield IRAs from DOL’s Fiduciary Reach |
NAPA Net: Case of the Week: Congressional Report Summarizes DOL Fiduciary Rule |
NAPA Net: Borzi Updates Council on State Plan Guidance, Fiduciary Proposal |
Kiplinger: Retirement Savers, Why the New myRA Plan Isn’t Best for You |
NAPA Net: Breaking Down an Excessive Fee Settlement |
NAPA Net: Mrozek: Merrill Fostering Specialist DC Advisor Groups |
NAPA Net: Does Sharing Peer Savings Data With Participants Matter? |
NAPA Net: Bramlett: Here’s How to Rectify Fee Inequity in Revenue Sharing |
Kiplinger: Calculating the Tax Bite When Converting a 401k to a Roth IRA |
NAPA Net: White: SEC Working on Fiduciary Standard ‘Expeditiously’ |
NAPA Net: Reader Poll: Plan Design and Markets and DOL – Oh, My! |
NAPA Net: When Are 3 Fiduciary Insurance Policies Not Enough? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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