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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/20/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/20/15
November 23
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:
Exclusive Interview: Ron Rhoades Threatens to Oppose Any Weakening of Fiduciary Standard,” (, November 17, 2015) Ron also says to “sunset” BICE, eliminate all conflicts-of-interest, and don’t trust FINRA.

Compliance – The Sting:
Why is the Government Competing with the Free Market? This is a serious matter. No one is talking about it, save for a few industry insiders.
DOL issues proposed safe harbor for state-run retirement plans,” (BenefitsPro, November 16, 2015) This could be the beginning of the end of the free market privately run retirement plan industry. Consider it a brilliant flanking maneuver to initiate the nationalization of the industry just as all resources have been devoted to the feint frontal assault (the new fiduciary standard).
Open MEPs get DOL blessing,” (Employee Benefit News, November 16, 2015) While the article doesn’t make this very clear one way or another, these “Open” MEPs may only apply to state run retirement plans. This means the same problem that Donald Trump complained about regarding state regulated health insurance is now coming to a retirement plan near you.
More States Are Initiating Programs to Encourage Retirement Savings,” (The New York Times, November 16, 2015) Will these survive a Republican Congress – er, wait! – Republican Administration?
Democrats Propose Social Security Change to Help Single Women,” (TIME, November 18, 2015) And this, boys and girls, is why Washington causes so many problems. They use a hammer when is a screwdriver is best. The issue they’re trying to address isn’t fixed by messing with the public pension system. It must be addressed through a wholly different program. Fortunately, the end of the article says how Trump wants to fix it. His idea has nothing to do with taking more money out of your pocket via payroll taxes.

Fiduciary – The Misdirection:
“Let’s all get up and dance to a song that was a hit before your mother was born…” Now you know the meaning behind The Beatles song Your Mother Should Know.
Regulators May Put Robo Firms Under Fiduciary Microscope,” (Financial Planning, November 17, 2015) It’s about time.
DOL fiduciary rule could decimate number of IBDs,” (InvestmentNews, November 18, 2015) Well, if they don’t adopt a fiduciary platform they’re headed to extinction anyway (see Lead Story).
Broker-dealer advisors at historic crossroads,” (BenefitsPro, November 18, 2015) Will the non-fiduciary broker-dealer advisor business model survive? With or without the DOL’s new rule, consumer patterns suggest B/D advisors must adopt the fiduciary standard or perish (or simply return to the traditional brokerage business model). What does your crystal ball say?
Are Brokers Really as Anti-DOL Fiduciary as Their BDs?” (ThinkAdvisor, November 18, 2015) Yet another Bob Clark must read. As they say, “It’s funny because it’s true.” Especially is comment about AARP in the first paragraph.
Fiduciary Issues That Could Reshape Advisor Industry Are Actively in Process,” (Financial Planning, November 19, 2015) This is all about the SEC. It offers an interesting tidbit at the end. The SEC will be down to three commissioners at the end of the year. Will they go ahead with their new fiduciary rule before the new commissioners are approved? They’re not telling.

Fees – The Hook:
Get ‘em all riled up about something they can’t do anything about and then watch ‘em ask somebody to do something – anything – to placate their vacant hunger for action, however misdirected.
Why Investors Still Don’t Know Their 401k Costs,” (Wall Street Journal, November 12, 2015) Old news. But the more important question is even if they did, what could they do about them anyway. Only the plan sponsor knows for sure.

Investments – The Set-Up:
So many questions. So few answers. Or is that they entire idea?
Social Security As An Investment,” (Forbes, November 12, 2015) An interesting idea.
All That Glitters: What Happens When IRA Clients Want to Hold Gold?” (Financial Planning, November 16, 2015) This is what happens when Stupid doesn’t Keep It Simple.
Final DOL Rule Could Place Indexed Annuities Under Variable Umbrella,” (ThinkAdvisor, November 17, 2015) And this is a problem why?
Protecting your portfolio from the downside,” (MarketWatch, November 17, 2015) You’ve got to ask yourself one question: “Did this work in 2008/09? Did this work in 2002?” OK, so that’s two questions, but you get the point.
Why 401k plan sponsors shouldn’t use custom TDFs,” (Employee Benefit News, November 18, 2015) One man’s (rather detailed) opinion.
Dangers of De-risking Portfolios in Retirement: FinaMetrica’s Resnik,” (ThinkAdvisor, November 18, 2015) This we already knew, but it’s amazing how many people don’t.

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 Account Mistakes – Not For Dummies,” (Forbes, November 15, 2015)
Baby boomers, shift to 401k plans will send megabucks to advisers by 2020,” (InvestmentNews, November 16, 2015)
4 questions plan sponsors are asking about new Form 5500 drafts,” (Employee Benefit News, November 16, 2015)
Sue Over A Bad 401k,” (Forbes, November 16, 2015)
Employees slow to embrace Roth 401k plans,” (Benefit News, November 19, 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.
Why Millennials Are Saving at a Younger Age Than Any Other Generation,” (Money, November 12, 2015)
How to make a health savings account work for you,” (CNBC, November 12, 2015)
The secrets of America’s ‘supersavers’,” (CBS News, November 13, 2015)
Four smart strategies to help you save for retirement,” (USA Today, November 14, 2015)
Yes, Virginia, you should be worried about retirement,” (BenefitsPro, November 16, 2015)
To retire with a mortgage or not: 5 FAQs,” (USA Today, November 16, 2015)
Millennials Are a ‘Generation Lost’ When It Comes to Financial Matters,” (ThinkAdvisor, November 17, 2015)
Why do some people retire? It’s just the right time — and they want to golf,” (The Washington Post, November 17, 2015)
Most Gen Xers Paralyzed by Retirement Fears,” (ThinkAdvisor, November 17, 2015)
The Times Are A-Changing Your Retirement,” (Financial Planning, November 18, 2015)
A 3-step retirement savings plan for 20-somethings,” (CNN, November 18, 2015)
More Women Than Men Worry About Retirement,” (Financial Advisor, November 18, 2015)
One Couple’s Plan for Retiring by Age 33,” (Money, November 18, 2015)
What to do if you have a crummy 401k plan,” (CNBC, November 18, 2015)
Some Workers Spend Less, Some More After Retirement, Study Indicates,” (Financial Advisor, November 18, 2015)
Spending patterns change in retirement–but not always how you’d think,” (BenefitsPro, November 19, 2015)
Boomers Retirement May Run Low on Cash,” (OnWallStreet, November 20, 2015)
More than half of women very concerned about retirement savings,” (Benefit News, November 20, 2015)
In Surprise, Spending in Retirement Rises in Many Households: EBRI,” (ThinkAdvisor, November 20, 2015)

Wisdom from Some of Our Favorite Blogs:
ERISA Lawyer Blog: Sixth Circuit Rules That Claim Of Impermissible Cutback Is Time Barred |
Scholarly Financial Planner: Fiduciary Duties Conform to the Level of Protection Required |
Behavior Gap: How What We Wear & What We Drive Makes Us Feel |
Nerd’s Eye View: Peer-To-Peer Investing As A Fixed Income Alternative |
ERISA Lawyer Blog: Sixth Circuit Rules That Continued Investment In Employer Stock Did Not Violate ERISA’s Prudence Rule |
Behavior Gap: How Well Does Your Advisor Handle Uncertainty? |
Scholarly Financial Professional: Third-Party Exams for RIAs Proposed; Is It Time to Embrace a True Profession? |
Squared Away Blog: Listen to Your Elders Please |
The Chicago Financial Planner: 5 Reasons 401k Lawsuits Matter to You |

Hot Tips from Popular Web Resources:
NAPA Net: DOL Gives State-Run Plans an Edge Over Private Sector |
NAPA Net: IRS Publishes Final Cash Balance Transition Rules, Extends Effective Date |
The Motley Fool: 7 Hidden Fees to Watch Out for in Retirement |
NAPA Net: 6 Things Boomers Need to Know About Saving for Retirement |
NAPA Net: Why Free is so Costly |
NAPA Net: Transfers Slow, But Participants Still Fled TDFs in October |
Morningstar: Pros and Cons of Income-Generating Strategies in Retirement |
NAPA Net: DOL’s Proposed Safe Harbor for State Savings Programs: A Closer Look |
NAPA Net: Case of the Week: Year-End Participant Notices |
NCPA: Politics and Investment Options Don’t Mix | Retirement Reform Policy |
NAPA Net: Benefits Matter, But Many Aren’t Satisfied |
NAPA Net: Ethics Violations Draw Compliance Focus |
NAPA Net: Gen X to Advisors: Don’t Judge Me |
NAPA Net: Who ‘Owns’ Responsibility for Retirement Readiness? |
NAPA Net: Opportunity X |
NAPA Net: House Committee Presses SEC’s White on Fiduciary Standard |
NAPA Net: Health, Family and a Chance to Make a Difference |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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