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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 1/15/16 Trending Topics for ERISA Plan Sponsors: Week Ending 1/15/16
January 18
00:02 2016

Welcome to 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 Story:
3 Rules for Retirement Savers During Falling Markets,” (, January 12, 2016) Why disciplined retirement savers benefit from falling markets.

Compliance – The State is in Flux:
Sometimes trends appear because a series of events occur. Sometimes trends reveal themselves when a series of events fail to occur. The latter may have been such the case last week when, after much heralded overtly public fanfare where the President declared his unyielding support for the DOL’s fiduciary efforts, his voice ignored the topic in his final State of the Union Address.
Raising Retirement Age Disproportionately Hurts Poor, Study Says,” (Financial Advisor, January 12, 2016) Researchers reached this conclusion because – get this – they say the rich outlive the poor.
SEC to Intensify Probes Into Retirement Planning, Cybersecurity,” (Financial Planning, January 12, 2016) Do plan sponsors relying on dual-registrant brokers need to be worried?
Obama Gives Retirement Issues Light Touch,” (Financial Advisor, January 13, 2016) It looks like the fiduciary fad has served its purpose to further deteriorate the image of private retirement plans; hence, allow the introduction of state sponsored competition.
Third defined benefit relief law less charming to plan sponsors,” (Employee Benefit Adviser, January 13, 2016) The article refers to pension plans and the title says it all (but the article provides details).

Fiduciary – It’s Just Another Product:
For a long time, “fiduciary” was a philosophy, a moral ethic, a line in the sand that couldn’t be crossed lest one fall into the Dark Side. Today, it’s increasingly becoming just another product.
Can Your Retirement Strategy Survive a Market Crash?” (Money, January 6, 2016) Wow. This presents a problem. Here we have the mainstream media advising readers to reassess their retirement strategy in the midst of falling markets, when experienced professionals are telling them this is the worst thing to do. Maybe the media is responsible for the retirement “crisis”?
Third-party fiduciary services growing,” (Benefit News, January 14, 2016) This article addresses the growing trend of plan sponsors using 3(21) and 3(38) advisers.

Fees – 12b-1 Redux?:
We haven’t heard about the evils of 12b-1 fees in a long time. Now, all of the sudden, the SEC has declared “I’m shocked, shocked to find that 12b-1 fees are going in here!”
New 401k suit targets Vanguard fund fees,” (InvestmentNews, January 5, 2016) It can happen to anyone. Anyone, that is, that offers different class shares.
Costs hurt more than you think in down market,” (MarketWatch, January 9, 2016) Maybe, maybe not. If you’re paying an AUM fee, the total money spent will actually go down. If you’re paying a flat fee, the costs will take an increasingly larger percentage bite out of your assets.
What’s Up With 12b-1 Fees?” (ThinkAdvisor, January 13, 2016) The article reviews a recent SEC case against an adviser regarding 12b-1 fees and concludes the SEC’s actions raise more questions than it answers.
Do you know where your 401k fees are hiding?” (CNBC, January 13, 2016) Not for nothing, but this story looks very similar to stories on this topic written at the beginning of last year.
SEC Slams RIA for 12b-1 Violations,” (InvestmentNews, January 15, 2016) Another one bites the dust.

Investments – This is What a Correction Means:
Two things are certain when the stock market falls – you’ll find a slew of crazy alternative investment ideas and active management will beat the market.
3 Toys With a Better Rate of Return than Your 401k,” (Money, January 11, 2016) Really? Are we this desperate?
401k suit targeting Vanguard fees could support case for active funds,” (InvestmentNews, January 12, 2016) In a follow up to an earlier article on this story (see above in the “Fees” section), the idea here is that this case may be signaling a shift from low fees to best value (which is what the DOL wanted all along).

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.
Big Number Of Near Retirees Earning $100,000-Plus ‘Catching Up’ On Savings,” (Financial Advisor, January 11, 2016)
Retirement readiness metrics key to 401k plan success,” (Benefit News, January 11, 2016)
How To Get Big Company 401k Benefits At Small Firms,” (Forbes, January 11, 2016)
Catch-Up Contributions Can Put Retirees Way Ahead,” (Wealth Management, January 11, 2016)
Catch-Up Contributions Put Retirees Way Ahead,” (Money, January 11, 2016)
The digital adoption gap in retirement communications,” (Employment Benefit News, January 11, 2016)
How big your retirement fund should be at every age, according to one guide,” (The Washington Post, January 12, 2016)
Best practices for retirement plan RFP success,” (Employee Benefit News, January 12, 2016)
Teach your retirement savers well,” (BenefitsPro, January 13, 2016)
What if, like Powerball, your boss offered you a lump-sum payment?” (MarketWatch, January 13, 2016)
Know what retirement clients need most from you,” (Employee Benefit News, January 14, 2016)
For some savers, a managed 401k’s tailoring beats a target date fund,” (USA Today, January 14, 2016)
401k plan participants saving more, taking out less,” (Benefit News, January 15, 2016)

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.
Ready to retire in 2016? Make these 3 moves now,” (CNBC, January 7, 2016)
Using Roth IRA earnings for a first-time home purchase,” (Los Angeles Times, January 11, 2016)
Raising Retirement Age Disproportionately Hurts Poor,” (Bloomberg Business, January 11, 2016)
4 Building Blocks of a Secure Retirement,” (Yahoo, January 11, 2016)
Lessons From A Market Crash To Help Avoid A Retirement Crash,” (Financial Advisor, January 12, 2016)
Tune up financial plans from lessons learned in 2015,” (MarketWatch, January 12, 2016)
Now’s your last chance to use these Social Security strategies,” (CNBC, January 12, 2016)

Wisdom from Some of Our Favorite Blogs:
Fred Reish: The Year of the Fiduciary Rule |
Nerd’s Eye View: Looming Battle Of Privacy Rights Over Client Financial Data |
Boston ERISA Law Blog: Bell v. Anthem, Excessive Fee Cases, and the Economics of Settlement |
Squared Away Blog: Retirement Just Might Be Boring |
ERISA Lawyer Blog: Eighth Circuit Rules That Plaintiffs Did Not Make Out A Case Of Breach Of ERISA Fiduciary Duty By Charging Excessive Fees |
The 401k Plan Blog: What’s in a name? |
Boston ERISA Law Blog: Another Case Showing That You Should Not Assume That Your Plan Provider Is a Fiduciary |
Nerd’s Eye View: Reducing Retirement Return Assumptions Based On High Valuation? |
Behavior Gap: Other People Don’t Know Your Financial Situation |
The Chicago Financial Planner: 3 Financial Planning Lessons from the Cincinnati Bengals |
Proskauer’s ERISA Practice Center Blog: Is a Qualified Retirement Plan Required to Apply Windsor Retroactively? |

Hot Tips from Popular Web Resources:
Kiplinger: How Retirees Should React to the Stock Market Selloff |
NAPA Net: Plan Sponsor’s Excessive Fee Suit Dismissed |
The Motley Fool: Should You Refinance Your Mortgage Near Retirement? |
NAPA Net: IRS Offers Price Incentives to ‘Come Clean’ |
NAPA Net: Cheap ‘Shot’: How Low Must You Go? |
NAPA Net: Stable Value Making a Comeback? |
NAPA Net: Coming Soon: Big(ger) Focus on Fees |
NAPA Net: SEC Draws a Bead on 401k Specialists |
NAPA Net: Is There More Than One 401k Safe Harbor Plan Design? |
NAPA Net: JPMorgan Stock Drop Suit Survives Second Challenge |
NAPA Net: What’s in Your Value Proposition? |
NAPA Net: What’s Next for Behavioral Finance? |
NAPA Net: A Tipping Point for Financial Wellness |
NAPA Net: Deferrals Up, Plan Loans Down, PSCA Says |
Kiplinger: 7 Important Financial Moves If You Turn 65 in 2016 |
NAPA Net: New Jersey Pivots on State-Run Retirement Plan Design |
NAPA Net: What New Ideas Are Connecting With Plan Sponsors? |
NAPA Net: 2016 No Game Changer for Retirement Income |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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