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FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 12/11/15

FiduciaryNews Trending Topics for ERISA Plan Sponsors: Week Ending 12/11/15
December 14
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:
9 Gifts To Best Prepare Employees for Retirement Readiness,” (, December 8, 2015) You’ll find retirement readiness a lot easier to attain by following these helpful tips.

Compliance – It’s So Crazy It Just Might
While the many Nero wannabes in Washington prefer fiddling, there are radical ideas that might represent an incredible breakthrough in creating long-term economic and financial sustainability for all the citizens in our nation. Of course, solving problems put policy wonks out of business, which is probably why they don’t solve problems, which is probably why they are universally loathed, which is probably why so many people are dreaming of a Trump Christmas.
Will state-sponsored retirement plans end the fiduciary rule civil war?” (BenefitsPro, December 7, 2015) Nothing unifies competing clans more than a common enemy.
Rep. Polis at center of DOL fiduciary storm,” (BenefitsPro, December 9, 2015) We don’t usually post “the sausage being made” articles concerning Congressional goings on since they’re usually more smoke than fire. This one, however, does a great job of displaying all that is wrong with Washington – assuming you can read between the lines. By labeling one side “moderate” and framing the issue in faux-partisan terms, it plays directly into the lobbyists’ hands. It’s not at all about the citizens. It’s all about maintaining the elite. For those requiring a longer explanation, you’ll need to read up on political theory, guerrilla marketing, and brand management. Otherwise, try reading any of Robert Cialdini’s books on persuasion. It’ll be pretty obvious what’s going on after that.
How Lump Sums Could Help Fix Social Security,” (ThinkAdvisor, December 10, 2015) Interesting idea that flies in the face of many of the aforementioned policy wonks but makes a lot of sense for those with field experience. Researchers seem to have discovered workers will work longer if they are promised a lump sum. This could help extend the life of Social Security.

Fiduciary – Listen to Deep Throat:
In the classic movie All The President’s Men, infamous disgruntled former FBI Deputy Director gets revenge by instructing two ambitious journalists to “follow the money.” It’s pretty good advice. For example, it’s the underlying premise in the current presidential sweepstakes. It also works when trying to unravel this whole fiduciary thing.
‘Studying’ Fiduciary Rule Further Means Killing It, Says Levitt,” (Financial Advisor, December 7, 2015) The title says it all.
Follow the (Proprietary) Money: The Curious Case of Broker Johnny Burris,” (ThinkAdvisor, December 9, 2015) Excellent case study from Bob Clark.

Fees – “Now Give Me Money…”:
“…(That’s what I want)…” And speaking of following the money, that’s exactly what we find in this section. Actually, the point here is that it’s hard to follow the money. But it’s this hidden money that drives everything. Sort of like all that secret PAC money pulling the strings of certain puppets posing as presidential pretenders.
Rule Will Make Variable Annuity Commissions And Fees Clearer,” (Financial Advisor, December 8, 2015) The dirty little secret is that these products have been exempt from certain fiduciary protections, meaning fees can be conveniently hidden depending on the circumstances.

Investments – Old Story of Annuities:
Einstein defined insanity as trying the same thing over and over again and expecting different results. Does this mean the annuity industry is crazy? Some might say the same about the entrenched political establishment. Whatever the case, it’s amazing how one can easily use current events as a thematic metaphor!
Insurers slow to introduce QLACs for 401k market,” (InvestmentNews, December 4, 2015) It appears it’s easier to sell annuities to retail clients rather than fiduciaries responsible for the best interests of other people. Who knew?
3 Risks of Investing in Annuities,” (US News, December 4, 2015) Actually, there are a few more than three listed in the article.
These Trusts Can Shake Up Your Clients 401k,” (Financial Planning, December 7, 2015) This is all about cheerleading for CITs. It sort of leaves out the important point about CITs lacking the same level of rigorous regulation as mutual fund (yes, they are regulated by banking regulators, but, let’s be honest, it’s not the same). The author therefore omits to disclose it was pooled investment vehicles that played a major role in the crash of 1929 and led to many of the securities regulations we have today.
Variable Annuities For Your Overspending Retiree Clients?” (Financial Advisor, December 8, 2015) The perils of one size fits all.
The challenge of keeping clients away from shiny new investing trends,” (InvestmentNews, December 9, 2015) A very good reminder from your favorite sketch artist Carl Richards.
Retired? How much money should you keep in stocks?” (CNN, December 9, 2015) Unfortunately, this is one of those “anything goes” articles.
Why a gold and oil crash won’t scare prudent retirement investors,” (MarketWatch, December 10, 2015) The answer is all in the title.
What the looming Fed rate hike means for your retirement,” (CNBC, December 11, 2015) A good overview of all the possibilities.

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.
Business Owners May Be Better Off With Solo 401k Than SEP IRA,” (Forbes, December 3, 2015)
What is forcing workers to retire earlier than they planned?” (BenefitsPro. December 4, 2015)
Few employees aware of retirement transition benefits,” (Benefit News, December 4, 2015)
3 more-positive ways to think about saving for retirement,” (MarketWatch, December 4, 2015)
8 questions to test financial literacy,” (BenefitsPro, December 5, 2015)
Restaurant-friendly 401k plans help retain workers,” (Employee Benefit News, December 7, 2015)
The 5-minute 401k investment plan,” (CNN, December 7, 2015)
Fixing The Weakest Link: Strengthening Retirement Security By Default,” (Forbes, December 7, 2015)
5 tips to kick off retirement planning conversations,” (Employee Benefit Adviser, December 8, 2015) |
Retirement Providers Will Increase Auto Enroll, Default Contribution Rates,” (ThinkAdvisor, December 8, 2015)
5 tips to kick off retirement planning conversations,” (Employee Benefit News, December 8, 2015)
Do 401k plans need fixing?” (Benefit News, December 9, 2015)
Retirement plans in 2019: A sea change coming,” (BenefitsPro, December 9, 2015)
More time off, better 401k matches top employee wish lists,” (Benefit News, December 9, 2015)
How Digital Players Are Digging Into the 401k Space,” (Financial Planning, December 9, 2015)
New study looks at couples’ retirement spending patterns,” (BenefitsPro, December 10, 2015)
Can 401k re-enrollment fight plan participant inertia?” (Benefit News, December 10, 2015)
Enrollment in 401k plans and HSAs surging, among other trends,” (BenefitsPro, December 10, 2015)
Tackling major issues confronting the DC industry,” (Employee Benefit News, December 10, 2015)
401k, Roth Accounts Have More New Enrollees Than Ever: Merrill,” (ThinkAdvisor, December 11, 2015)
Help keep employees off the retirement readiness naughty list,” (BenefitsPro, December 12, 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.
When It Pays to File Early for Social Security,” (Time, December 1, 2015)
How Much You Gain in Social Security by Working Longer,” (Wall Street Journal, December 3, 2015)
Changing Strategies for Social Security,” (The New York Times, December 4, 2015)
5 Ways For Stay-at-Home Spouses To Plan For Retirement,” (Forbes, December 4, 2015)
Americans not buying retirement products,” (BenefitsPro, December 7, 2015)
Student Loans Are Sabotaging Retirement Savings,” (Financial Advisor, December 7, 2015)
Why retirees are moving again,” (US News, December 7, 2015)
How Super Savers Take Retirement to the Next Level,” (Money, December 8, 2015)
Potential Directions For Social Security,” (Forbes, December 8, 2015)
Are you ready to spend $250K on retirement health care costs?” (Yahoo Finance, December 9, 2015)
The One Money Move to Make Before the End of the Year,” (Money, December 9, 2015)
Can my dad file at 81, recoup lost Social Security?” (Yahoo, December 9, 2015)
How Divorced Women Often Get Hurt When Dividing Retirement Assets,” (Wall Street Journal, December 9, 2015)
Rethinking retirement income replacement rules,” (InvestmentNews, December 10, 2015)
The long-term consequences of student loans,” (CNBC, December 10, 2015)
Ways for Seniors to Adapt to No 2016 Cost of Living Adjustment,” (Fox Business, December 10, 2015)
How to Cope With the Stress of Retirement,” (DailyFinance, December 10, 2015)
How To Help A Nonworking Spouse Save For Retirement,” (Forbes, December 11, 2015)

Wisdom from Some of Our Favorite Blogs:
Nerd’s Eye View: Is Financial Planning Software A Bad Retirement Simulator? |
RetirementRevised: Eight questions about Social Security claiming strategies |
Behavior Gap: It Just Doesn’t Matter |
The Retirement Plan Blog: Progress Through Business launches social enterprise platform: Progress Daily |
Nerd’s Eye View: Capturing The Illiquidity Premium Is A Privilege |
Behavior Gap: How You Dress Does Affect How You Feel |
Proskauer’s ERISA Practice Center Blog: Sub-Assignee Has Standing To Assert ERISA Claims |
Squared Away Blog: How Couples Deplete Retirement Savings |
The Retirement Plan Blog: Welfare Benefit Plans: More than just the Affordable Care Act |
RetirementRevised: Why a mandatory retirement saving plan still isn’t dead in the U.S. |
RetirementRevised: File-and-suspend phaseout sparks scramble for optimization tools |

Hot Tips from Popular Web Resources:
NAPA Net: Target-Date Fund Misperceptions Abound |
NAPA Net: 2015’s Most Disruptive Retirement Industry Person/Event |
NAPA Net: A Good Week for Form 5500 Filers |
NAPA Net: Fiduciary Legislation to be Honed for the Holidays |
The Motley Fool: This Stealth Social Security Cut Will Start in 2017 |
NAPA Net: Portman, Cardin Weigh in on Fiduciary Proposal |
NAPA Net: 6 Tips on Shopping for a Provider |
NAPA Net: Future Focus: the ‘Emergence’ of the Total Benefit Advisor? |
NAPA Net: Cost of True Love Rises — a Bit |
Morningstar: Fighting Inflation in Retirement |
Kiplinger: A Squeeze on Social Security Benefits |
NAPA Net: Advisors Less Bullish on Markets |
NAPA Net: Case of the Week: Funding Stabilization Extended for DB Plans |
NAPA Net: Candidate Clinton Throws in with Fiduciary Proposal — and Then Some |
NAPA Net: The Unspoken Retirement Worry |
NAPA Net: How RIAs Are Different |
NAPA Net: Highways Yes, Pensions No — Let Pension-less Seniors Build Our Roads |
NAPA Net: The Advent of the Chief Retirement Officer |
Kiplinger: Clients should just say no to universal life insurance as a retirement fund |
Kiplinger: A Costly RMD Mistake Retirees Can Make |
NAPA Net: What ‘Obsession’ Was 2015’s Most Disruptive? |
NAPA Net: Elite Plan Advisors Cooking up Small Plan Solutions |
NAPA Net: Survey Finds Gap in Retirement Medical Communications |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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