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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 2/26/16 Trending Topics for ERISA Plan Sponsors: Week Ending 2/26/16
February 29
00:03 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:
Will Increased 401k Fee Scrutiny Trump DOL’s New Fiduciary Rule?” (, February 13, 2016) Fee Disclosure and class-action suits have been the one-two punch that has spurred interest in greater 401k fee scrutiny.

Compliance – Ground Hog Day:
That was supposed to happen early this month but it appears to be an ongoing phenomenon with Washington.
Expert calls White House’s multiemployer retirement proposal shortsighted,” (BenefitsPro, February 17, 2016) You can tell this is lame duck season. This tired pension proposal has been previously rejected by Congress and isn’t supported by key players in the industry.

Fiduciary – The Mad Dog Fight:
Punch, counter-punch, jab, jab, uppercut, uppercut,… These are the sound effects to the ongoing battle for the high ground of “fiduciary.” Not only does it pit industry versus regulator, but we’re also seeing civil wars brewing with both the industry world and the regular realm.
Adviser Twitter fight erupts when Dave Ramsey bashes DOL fiduciary rule,” (InvestmentNews, February 23, 2016) Radio talk show host bashes new rule.
3 Big Holes in DOL Fiduciary Proposal, ICI Says,” (ThinkAdvisor, Febraury 23, 2016) Not sure of the statistics cited here are peer reviewed, but they do look similar to what the non-peer reviewed data offered by industry  lobbyists.
DOL, SEC Clashed Over Fiduciary Rule,” (Financial Advisor, February 24, 2016) Read this just to see the nasty email exchanged between the SEC and the DOL.
SEC Cracks Down on Bad Actors in Retirement Space,” (Financial Planning, February 24, 2016) Is the SEC experiencing DOL envy?
Grandfathering of Assets Under DOL Fiduciary Proposal, Explained,” (Wealth Management, February 24, 2016) So, here’s the problem with “grandfathering” pre-existing conditions. They may indemnify the service provider, but they don’t let the plan sponsor off the hook. This is just a class action opportunity waiting to happen. Does the DOL realize that? Or was that the intention all along?
No, DOL Fiduciary Rule Not Driving Advisors Away From Firms: Brian Hamburger,” (ThinkAdvisor, February 25, 2016) Instead, according to Hamburger, what is will require is for the existing personnel to expand their skill set.
Does DOL fiduciary rule comply with Obama executive order?” (BenefitsPro, February 26, 2016) The ICI is asking if executive orders from both the Clinton and Obama administrations present problems for the DOL’s new Fiduciary Rule.

Fees – And in the End…:
…the marketplace will decide. It is, after all, the ultimate acid test for all theories, whether they be marketing-based or regulatory-based. You can lead a horse to water but you can’t make it drink. Likewise, you can regulate an industry but, as we’ve seen in black markets, you can’t prevent someone from buying something.
Free market always one step ahead of regulators,” (BenefitsPro, February 24, 2016) It’s very possible all the focus on 401k fee litigation has obviated the need for the DOL’s proposed fiduciary rule – at least as it pertains to 401k plans.
Don’t let hidden costs destroy your retirement savings,” (MarketWatch, February 24, 2016) The article was good until it made the naïve suggestion that investing in index funds would cure this ills.

Investments – More Bad Stuff:
Why is it that things that seem too good to be true really are too good to be true? This should be the ultimate rule of thumb. How many times do we have to say this: There’s no such thing as a free lunch.
Are 401k plans and 529 plans Safe Places to Invest?” (Money, February 17, 2016) Apparently the author confuses short-term volatility with “safety” when it comes to investing for long-term goals. A classic mistake.
Interested in variable annuities? Read this first,” (MarketWatch, February 19, 2016) Not a bad checklist.
Wells Fargo Warns Against Investors Over Relying On Bonds For Retirement,” (Financial Advisor, February 22, 2016) Unless you’re rich, but we already knew that.

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.
6 ideas on investments for plan sponsors,” (BenefitsPro, February 19, 2016)
Plan sponsors believe DC plans need redesign,” (BenefitsPro, February 19, 2016)
Warning: Some Social Security Reps Are Themselves Confused About The New Law,” (Forbes, February 19, 2016)
Small companies needn’t fear launching retirement plan,” (Employee Benefit News, February 22, 2016)
Millennials and retirement preparedness,” (BenefitsPro, February 22, 2016)
Why employers should encourage HSA use,” (Employee Benefit Adviser, February 23, 2016)
Retirement crisis? Do you really need to ask?” (BenefitsPro, February 23, 2016)
The two best ways to structure a QLAC,” (MarketWatch, February 23, 2016)
What Americans Are Saving For – It’s Not Retirement,” (Forbes, February 23, 2016)
How to Make the Most of Your Retirement Health Care Options,” (TIME, February 23, 2016)
Tax options for handling employer stock in a 401k,” (BenefitsPro, February 24, 2016)
Helping small employers launch retirement plans,” (Employee Benefit Adviser, February 25, 2016)
401k sponsors increasing focus on retirement income solutions,” (Employee Benefit News, February 25, 2016)
7 best practices for defined benefit plan sponsors,” (Employee Benefit News, February 25, 2016)
How employers can help workers deal with longevity risk,” (Employee Benefit News, February 26, 2016)
How Advisors Can Protect Lawyers’ Retirement Funds From a Crash,” (ThinkAdvisor, February 26, 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.
Some Surprisingly Good News About Retirement–Sort Of,” (Forbes, February 17, 2016)
The rule that could cut your Social Security,” (Yahoo, February 17, 2016)
What’s missing from Americans’ plans to live long,” (CBS News, February 19, 2016)
5 considerations when retirement planning for 2,” (USA Today, February 21, 2016)
Why a Falling Stock Market Won’t Delay Boomer Retirements,” (ThinkAdvisor, February 22, 2016)
Despite Volatile Markets, Boomers Aren’t Postponing Retirement,” (Financial Planning, February 22, 2016)
6 Ways to Prevent Going Broke in Retirement,” (ThinkAdvisor, February 22, 2016)
New Study Questions Retirement Planning Calculators’ Accuracy,” (Wall Study Journal, February 22, 2016)
Dreams of Living Well in Retirement Dim for Americans,” (Bloomberg Business, February 22, 2016)
50-something and little saved to retire on? What you can do,” (CNBC, February 23, 2016)
The tiny change that can leave you much better off in retirement,” (The Washington Post, February 23, 2016)
Don’t overlook this tax credit for saving,” (CNBC, February 23, 2016)
The Real Reason People Don’t Save For Retirement,” (Forbes, 24, 2016)
Clements: Keeping Clients from Sabotaging Their Retirement,” (Financial Planning, February 25, 2016)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: Why Doesn’t Every Plan Have Automatic Enrollment? |
Nerd’s Eye View: Are Robo-Advisors An Investment Company Under Rule 3a-4? |
fi360 Fiduciary Talk 13: The DOL Sends Fiduciary Rule to OMB for Final Review |
The Retirement Plan Blog: Late 401k deposits? “An ynche in a misse is as good as an ell.” |
fi360: Not just the DOL: Retirement plan advisers must prepare for increased SEC scrutiny |
Behavior Gap: Money is About Feelings |
Boston ERISA Law Blog: What Would Alexander Hamilton Say About Excessive Fees in 401k Plans? |
The Retirement Plan Blog: The State of Small Business Owners and Retirement as an Infographic |
Nerd’s Eye View: Retirement Date Risk And Sequence Of Returns |
Behavior Gap: Better Questions to Ask About Risk |
fi360 Fiduciary Talk 14: Class Action Lawsuits Against Fiduciary and 401k Plans |
fi360 Fiduciary Talk 15: SEC Retirement Targeted Industry Reviews and Examinations Initiative |
The 401k Plan Blog: DOL Fiduciary Rule Set To Shake Up Retirement Marketplace |
Nerd’s Eye View: Will Congress Repeal The Tax-Free Roth IRA Promise? |

Hot Tips from Popular Web Resources:
Kiplinger: Retirement Tax Breaks Threatened by Obama’s Final Budget |
NAPA Net: Retirement Planning Tools Undermining Retirement Planning?
NAPA Net: Which Retirement Planning Calculator(s) Do You Use — and Why? |
NAPA Net: Prime Time? Suit Challenges Plan’s Lack of a Stable Value Offering |
NAPA Net: CBO Corrects its Social Security Replacement Rate Calculations |
NAPA Net: Fiduciary Decision to Dump Employer Stock Upheld |
NAPA Net: What You Can Get With an RFP |
NAPA Net: CITs Mainstream in DC Plans |
NAPA Net: Fortune 500 Undergoes Big Shifts in Plan Offerings |
Kiplinger: Government Spells Out New Social Security Rules |
The Motley Fool: The Average American Household Approaching Retirement Has This Much Saved Up |
NAPA Net: Senate Committee Report Disses ‘Flawed’ Fiduciary Rule, Process |
NAPA Net: Is There a Cycle to Participant Loan Activity? |
NAPA Net: Will HSAs Grow to Become Attractive to DCIOs? |
Morningstar: 401k Investors: Avoid These 20 Mistakes |
NAPA Net: Ryan Says ‘Bureaucrat Bullies’ Behind Fiduciary Rule |
NAPA Net: Are Employers Worried Enough About Worker Retirements? |
NAPA Net: 5 Ways Pension Funds Are Taking Action |
NAPA Net: What’s the ROI on Financial Wellness? |
NASDAQ: How to Move from Confused to Confident about Retirement |
NAPA Net: Are Plan Fiduciaries Liable for Cyberattacks? |
NAPA Net: Retirement Calculators Play a Part — for Most |
NAPA Net: A Failure to Communicate? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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