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The Ten Most Popular 2015 Articles for the 401k Plan Sponsor and Fiduciary

The Ten Most Popular 2015 <em></em> Articles for the 401k Plan Sponsor and Fiduciary
December 29
00:05 2015

There’s a good reason why certain articles strike a vibrant cord with readers: they provide immensely important facts and details. In the case of the 401k plan sponsor and fiduciary, those facts and details often represent key strategies they can employ to help them carry out their duty. If you had a chance to pick the brains of the broad expanse of this kind of reader, wouldn’t you agree you will discover some of these strategies? Read (or reread) the following articles and begin picking away at those brains. Don’t be surprised if this collective wisdom confirms certain instincts you have always possessed, drives a stake in the heart of a myth you’ve long embraced, and opens your mind to an idea you’ve never thought to consider. Enjoy these chestnuts.

#10:Why Isn’t 401k Fee Disclosure Working?” – This is the first in a series of articles describing the failure of fee disclosure. It was written in response to the fears among some that the DOL would rely on the crutch of fee disclosure rather than true conflict-of-interest reform. In retrospect, those fears may have been well-founded. On the other hand, who needs fee disclosure when you have Jerry Schlichter?

#9:Investing vs. Saving – Why the 401k Fiduciary Must Emphasize Only One” – On the Road to Success, discovering the critical steps is often more important than the length of your stride. This article explores the divide between saving and investing, and why the former takes precedence over the latter. Indeed, this may have a significant impact on plan design going forward.

#8:These 7 Employee Concerns can Befuddle a 401k Plan Sponsor/Fiduciary” – 401k plan participant concerns come in three varieties: Those you know about and should do something about; Those you know about and shouldn’t do something about; and, Those you don’t know about and better do something about right now. This is a flavorful article that delves into some meaty behavioral finance issues. Consider it a pre-requisite to #3 (below) on this list.

#7:401k Plan Sponsor Fiduciary Alert: Conflicts-of-Interest More Important than Mutual Fund Expense Ratios” – It’s not the operating costs, it’s the shareholder fees. They’ll get you every time. An exaggerated emphasis on mutual fund expense ratios is a continuing misconception among both plan sponsors and professionals. Even with the DOL’s proposed “Conflict-of-Interest” (a.k.a. “Fiduciary”) Rule, most commentators frame it in terms of the mutual fund expense ratio. It’s not about the expense ratios, folks, it’s about the actual conflicts-of-interest. Until plan sponsors and professionals grasp this obvious point, the potential for more Tibbles looms.

#6:Fred Reish Unravels Washington Regs and Explains 401k Plan Sponsor Fiduciary Liability” – Things in the news aren’t as they seem, but that doesn’t mean they’re not as they seem. The unflappable Fred Reish pontificates from on high, feeding red meat to the masses. Not only that, but – SPOILER ALERT! – he correctly anticipates the true fallout from the inevitable Tibble decision.

#5:What is a “Collective Investment Trust” and Does It Make Sense for a 401k Fiduciary to Use One?” – Older than mutual funds, the dangers in CITs exposed by the crash of 1929 led to the creation of mutual funds. Can their modern descendants reclaim the mantle long held by mutual funds? What’s most interesting about this article is the interaction within the lively comments that follow it. The article brings up some valid concerns. Apparently not all readers agreed. And not all readers agreed with the readers who didn’t agree. See. Very lively.

#4:Are Target Date Funds a Ticking Time Bomb?” – Like lemmings to the sea, retirement savers default to a controversial product. Should plan sponsors be worried? Most definitely, “Yes.” Are they worried? Probably not. That’s the job of the professional fiduciary. As the article explains, TDFs rightfully generate worrisome questions, yet they continue to grow in popularity. The piece ends with this enticing question: “Can the retirement plan industry overcome the inertia of TDFs before the ticking stops?”

#3:The Best and the Worst of 401k Plan Design Elements” – If you’re a plan sponsor, it’s time to review how your plan measures up against these design elements. If you’re looking to become a plan sponsor for a new plan, consider whether or not you should include these design elements. It’s quite unusual for something published late in the year (this article first appeared on October 27th) to score high on this list. The simple fact is, the earlier in the year the publication date, the more time readers have to discover the article. Now, with that in mind, you should be even more impressed with the content of this piece. It’s actually quite thorough and destined to be one of the most all-time favorite articles from Why? Because it answers the most pressing questions plan sponsors have.

#2:12b-1 Fees/Revenue Sharing Add to 401k Plan Sponsor Fiduciary Liability Woes” – In some distant future, what fossilized evidence of poor judgment will come back to haunt unsuspecting 401k plan sponsors. This was written in anticipation of The Big Event – the Supreme Court’s ruling on the Tibble case. Ironically, the Supreme Court wasn’t arguing on the fiduciary breach itself, but on the nature of one’s fiduciary duty (itself perhaps the more significant issue). Like many of these “must read” articles, the comments section is quite rich and invigorating.

#1:10 Unexpected Changes Tibble Really Brings to 401k Fiduciary Providers and Plan Sponsors” – How many of these did you foresee coming? In the long anticipated ruling, the Supreme Court scored one for the fiduciary. Not only was this the most read article of the year, it has to rank as one of the most commented on. Funny thing, though, of all the dire predictions, number ten seems to be the most accurate. If you think about it, that’s the way things usually go. In this particular case, the environment that led to Tibble disappeared long before the nine robed justices proclaimed the obvious. And that’s really the role best suited for the Supreme Court – it works best when it’s a lagging indicator, it’s most vilified when it takes on airs of a leading indicator.

Are you interested in discovering more about issues confronting 401k fiduciaries? If you buy Mr. Carosa’s book 401(k) Fiduciary Solutions, you’ll have at your fingertips a valuable reference covering the wide spectrum of How-To’s every 401k plan sponsor and service provider wants and needs to know. His latest book Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort answers the same questions from the retirement saver’s point of view and is also available from your favorite bookstore.

Mr. Carosa is available for keynote speaking engagements, especially in venues located in the Northeast, MidAtantic and Midwestern regions of the United States and in the Toronto region of Canada.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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