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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/6/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 11/6/15
November 09
00:11 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:
Tips on How to Both Save for Retirement and Pay Off Student Loans,” (, November 3, 2015) Paying student loans and saving for retirement is not an either/or, it’s an imperative.

Compliance – New is the New New:
Looks like we’ve been the target of a diversionary tactic. Doesn’t it feel good?
Budget Deal Underscores Danger Of Relying On Social Security For Retirement Income,” (Forbes, October 29, 2015) And this is news to who? The real problem with Social Security is the questionable ethics upon which it is based. In the era during which it was spawned, it would have been called a “numbers racket” had it been promulgated by organized crime rather than organized government. Those who are counting on Social Security are gambling. Worse, they don’t have a choice. The government, through payroll deduction, is forcing them to play through their payroll taxes.
How the Budget Deal Changes Social Security for Couples,” (Money, October 29, 2015) It ends a loophole for wealthy dual-income couples that was inadvertently created 15 years ago when Congress was trying to do something to correct a totally different issue. Funny how things tend to work out like that whenever Washington does something. Maybe this while “gridlock” thing isn’t so bad after all?
Budget Bill’s Ending of Social Security File-and-Suspend Strategy ‘Not All Bad’,” (ThinkAdvisor, October 29, 2015) Maybe because it’s the beginning of the end of this terrible Ponzi Scheme.
Advisers rethink retirement plans amid Social Security changes,” (InvestmentNews, October 30, 2015) Again, this loophole was being taken advantage of by mostly high net worth dual income couples. For many, if not most, “file and suspend” was not a viable strategy.
Military not impressed with new retirement plan,” (BenefitsPro, November 2, 2015) Interesting. This might be worthy of further study. Why do you think people would turn down an offer to earn more money? Could it be because they believe they’d rather have less of a sure thing (that they don’t know really isn’t “sure”) than more of a not-so-sure thing? Could it be they don’t trust themselves to maintain the long-term discipline necessary to earn that more money? There’s a fascinating less somewhere in all this.
Servicemembers Like Their Pension System but Support Reform,” (ThinkAdvisor, October 29, 2015) Point, meet counter-point.
3 Big Pension Changes in the Budget Bill,” (ThinkAdvisor, November 4, 2015) More budget fall out.
Treasury Rolls Out Retirement Savings Accounts Nationwide,” (Financial Advisor, November 6, 2015) Uh, wasn’t this already done?
The government’s new retirement savings account is now available across the US,” (Business Insider, November 5, 2015) Here’s a better idea.
myRA Guide: How to Navigate Uncle Sam’s Newest Retirement Savings Plan,” (TheStreet, November 6, 2015) More on the same subject.

Fiduciary – Tea Leaves:
The more we speculate the more fun we have.
“$1 Trillion Could Move To Index Funds If Advisor Rule Passes, Morningstar Says,” (Financial Advisor, November 2, 2015) What an odd thing to say, especially without stating any reason why they would believe this. If anything, the new rule will cause a consolidation of index funds.
Deadlock: Why the SEC’s Stalled on a Fiduciary Standard for Brokers,” (ThinkAdvisor, November 4, 2015) Not just deadlocked, but, according to the article, “hopelessly deadlocked.”
12 predictions about what the Labor Department’s fiduciary rule will look like when implemented,” (InvestmentNews, November 5, 2015) And here’s one for a  baker’s dozen: Just as the incoming Obama administration did to a controversial DOL rule made late in the Bush administration, the incoming Trump administration will return the favor in late January 2017.
Should colleges be held to a fiduciary standard?” (BenefitsPro, November 6, 2015) Hey, if it’s good for investors it’s got to be good for parents of college students.

Fees – C’mon Man!:
At this point, isn’t caveat emptor just a better way of handling it?
How Your 401k Fee Disclosure Statement Can Save You Money,” (Yahoo Finance, October 30, 2015) Wow, is this a bad article. Once again, the popular press confuses mutual fund expenses with fees, and renders dangerously bad investment advice as a result. Who watches the “watchdog”?
DOL Proposal Could End Commissions, Morningtstar Says,” (Financial Planning, November 2, 2015) They make it sound like a bad thing, as though they never heard of the prohibition of self-dealing when acting in a fiduciary capacity. Unlike what the article implies, there is no indications brokers will not be able to continue collecting commissions when they act in a broker capacity (as opposed to acting as an advisor).
Are retirement fees really the enemy?” (Employment Benefit News, November 3, 2015) That’s a really good question.
Morningstar says even opponents of DOL are lowballing costs,” (BenefitsPro, November 5, 2015) Kind of a convoluted analysis. Good luck following it. The next question is whether you can believe it.

Investments – Of Fads and Facts:
While others are selling the sizzle, the smart set keeps their eye on the steak.
Retirement Savings Bonus: How to Avoid Overpriced Annuities,” (Forbes, November 2, 2015) This implies that some annuities are not overpriced.
Equity exposure in TDFs still needed in retirement,” (Benefit News, November 3, 2015) This is one of the long held complaints about TDFs.
Retirees should resist the urge to speculate on stocks,” (MarketWatch, November 3, 2015) More like why they shouldn’t do it themselves and hire a dispassionate pro instead.

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.
Space Travel, Robots and Your Clients’ Retirement,” (ThinkAdvisor, November 2, 2015)
Women’s Lower Pay Means They Have Less Saved In 401k Plans Than Men, Vanguard Says,” (Financial Advisor, November 2, 2015)
Should 70 Be The New 65 With Retirement?” (Financial Advisor, November 2, 2015)
The difference in retirement funds for top female and male CEOs,” (The Washington Post, November 2, 2015)
Why You Should Target Retirement Income Instead of Retirement Savings,” (Money, November 2, 2015)
10 questions to ask about retirement preparedness,” (BenefitsPro, November 5, 2015)
Boeing settles 401k suit for near-record $57 million,” (InvestmentNews, November 6, 2015)
Retirement Account Balances Suffer in Q3 Market Volatility, Fidelity Reports,” (ThinkAdvisor, November 6, 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.
Americans Progress on Savings, but Lack Goals and Strategies,” (Financial Advisor, October 28, 2015)
Don’t let health-care expenses derail your retirement,” (CNBC, October 29, 2015)
When to start Social Security? This tool can tell you,” (CBS News, October 29, 2015)
Intel sued for investing employee 401k funds in hedge funds, private equity,” (InvestmentNews, October 30, 2015)
Don’t pay taxes on Roth conversions with retirement money,” (MarketWatch, October 30, 2015)
Social Security Q&A: Shouldn’t I Use My Life Expectancy To Decide When To File?” (Forbes, October 30, 2015)
Kick adult kids from the nest, speed your retirement,” (USA Today, October 31, 2015)
How Executives Can Minimize the Retirement Tax Hit,” (Wall Street Journal, November 2, 2015)
Older Parents Squeezed Between Paying for College, Retirement,” (ThinkAdvisor, November 2, 2015)
The Times Are A-Changing Your Retirement,” (Financial Advisor, November 2, 2015)
What Social Security’s New Rules Really Mean For My Secretary And Others Nearing Retirement,” (Forbes, November 3, 2015)

Wisdom from Some of Our Favorite Blogs:
The 401k Plan Blog: Retirement Income Options – In Plan vs. Out of Plan, Revisited |
Squared Away Blog: 5 Financial Goals for Teens, Young Adults |
Scholarly Financial Planner: The Exceptional Financial Adviser: An Expert, Trustworthy, Candid Life Coach |
Data “Points”: 4 Reasons Why Plan Sponsors Should Care About Outcomes |
Data “Points”: 4 Reasons Why Plan Sponsors Should Care About the Fiduciary Proposal |
Data “Points”: 15 Retirement Plan Points to Ponder |
Nerd’s Eye View: New File-And-Suspend And Restricted Application Deadlines |
Behavior Gap: Here’s a Secret Ninja Trick: Listen More, Talk Less |
fi360 Fiduciary Talk 8: A look into the DOL Crystal Ball |
ERISA Lawyer Blog: IRS Introduces myRA – The New Saving Account Vehicle |
Scholarly Financial Planner: Act Now! In The Battle for the Future of the U.S. Economy & Americans’ Retirement Security |
RetirementRevised: MyRA launch shows we need to get over our problems with mandates |
RetirementRevised: How file-and-suspend ended: Here’s the back story |
Fiduciary Matters Blog: Spano v. Boeing Excessive Fee Case Settles for $57 Million |
Scholarly Financial Planner: Congress: The DOL’s “Conflict of Interest” Rule is Good for American Business |
The Chicago Financial Planner: 5 Tips to Manage Taxable Mutual Fund Distributions |

Hot Tips from Popular Web Resources:
Kiplinger: How Good Is Your Employer’s 401k Plan? |
NAPA Net: Custom TDF Allocations Draw 401k Lawsuit |
NAPA Net: Working With Investment Committees |
NAPA Net: California Announces ‘Nudge’ Collaboration with UCLA’s Benartzi |
NAPA Net: ‘Recommendation’ May Entail More Than Meets the Eye |
NAPA Net: Dear DOL: How About Another Comment Period on Fiduciary Rule? |
NAPA Net: 5 Reasons Why More Plans Don’t Offer Retirement Income Options |
NAPA Net: Economy Clips Saving, Not Spending, of Millennials |
NAPA Net: Health Care’s Toll on Retirement Savings |
NAPA Net: Case of the Week: All About Fidelity Bond Requirements |
NAPA Net: October ‘Treats’ Average 401k Balances |
NAPA Net: MyRAs: They’re ‘Official’ |
NAPA Net: Fiduciary Education Needs More Attention |
NAPA Net: Trone: If Advisors Don’t Set Standards, Government Will |
The Motley Fool: 5 Income Juggernauts You Can Safely Buy in Your 80s |
NAPA Net: Bipartisan Legislative Solution Promised to Deal with Fiduciary Rule Concerns |
NAPA Net: Reader Poll: Plan Committees — Dealing With Different Sizes, Shapes and Origins |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA


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