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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/11/16 Trending Topics for ERISA Plan Sponsors: Week Ending 3/11/16
March 14
00:04 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:
Media Short-Cuts on Expense Ratios Can Misdirect 401k Fiduciary Due Diligence,” (, March 8, 2016) Simply by eliminating all funds with commissions, 12b-1 fees, and revenue sharing from the 401k investment due diligence process can greatly reduce the fiduciary liability exposure to the plan sponsor.

Compliance – 401Killing:
Don’t you wish you’re PR department was as efficient as that of the folks who seek to destroy the 401k? It seems like they can get the press to reprint all their  talking points at the drop of a hat.
One Fix for the American Nest Egg: Make People Save,” (Wall Street Journal, March 3, 2016) They’re half right. Now all they need to do is to punt Social Security and use the existing payroll tax to fund retirement savings accounts for all employees.

New chartbook slams 401k plans,” (BenefitsPro, March 7, 2016) From the same usual suspects that tell you the glass is always half empty.
Lack of federal action has spurred state pension initiatives,” (MarketWatch, March 9, 2016) Or, maybe the lack of federal action means most people think retirement saving should be an individual responsibility, not the responsibility of the state.

Fiduciary – It’s Bigger Than We Thought:
It looks like the need for consistent fiduciary regulation may be greater than we thought. And it’s not just humans that we’re worried about, it’s their robot masters, too.
Extraordinary Study Reveals Widespread Broker Misconduct,” (ThinkAdvisor, March 8, 2016) Is anyone  surprised? Bueller? Bueller?
More Revelations From Anti-DOL Fiduciary Rule Crowd,” (ThinkAdvisor, March 9, 2016) Once again Bob Clark exposes the defrocked emperor.
5 things to know about the DOL fiduciary rule,” (BenefitsPro, March 10, 2016) ERISA attorneys throw their two cents in prior to the official release.
Regulators grapple with how a robo-adviser can be a fiduciary,” (InvestmentNews, March 10, 2016) Is this a loophole waiting to happen, or is it a loophole waiting to be closed?

Fees – Measure by Measure:
You can lead a horse to water, but you can’t make him drink. You can measure something that’s measurable, but that doesn’t mean it’s meaningful.
Are we afraid to admit mutual fund expense ratios are a bad metric?” (BenefitsPro, March 9, 2016) Statistics might lie but the raw numbers don’t.

Investments – Common Nonsense:
If it makes sense that an idea doesn’t make sense, and we all agree, should we call it “common nonsense”?
‘Do Good’ Funds Make a Push for Your 401k,” (Wall Street Journal, March 6, 2016) Despite the obvious risks, case law in the Prudent Man rubric suggests a fiduciary is OK placing 5% or less in “risky” assets.
Lower projected returns may challenge retirement modeling,” (BenefitsPro, March 9, 2016) They made the same predictions 15 years ago. They were directionally correct but ended up estimating too low. Remember, in the end, everything regresses back to the mean.
Is Passive Investment Actively Hurting the Economy?” (The New Yorker, March 9, 2016) This has been said before. Here: “3 Reasons to Outlaw Index Investing Right Now (and One Selfish Reason Not To) in 5 Acts,” (, May 12, 2010).
Volatility drives stock market fears in 401k plans,” (InvestmentNews, March 11, 2016) It happens all the time. People chase the market or the market chases away people.

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.
Is it time to start making updates to DC plans?” (Employee Benefit News, March 6, 2016)
Why employers should have confidence in the Roth promise,” (Employee Benefit Adviser, March 8, 2016)
Generation X falling short on retirement preparedness,” (Employee Benefit News, March 9, 2016)
5 ways to stop the employee engagement crisis,” (BenefitsPro, March 10, 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.
Divorce After 50: How to Protect Your Retirement Finances,” (TIME, March 3, 2016)
Personal Finance Q&A: Don’t cash out retirement fund to pay off credit card debt,” (Los Angeles Times, March 5, 2016)
6 best part-time jobs for retirees,” (MarketWatch, March 6, 0216)
New career in retirement? Keep this in mind,” (USA Today, March 6, 2016)
Retiring? Don’t use a ‘best places to retire’ list to pick your new home,” (MarketWatch, March 7, 2016)
Mass confusion over new Social Security rules,” (InvestmentNews, March 7, 2016)
This Common Mistake Is Hurting Your Retirement Savings,” (Fortune, March 7, 2016)
Will Social Security Be There for Me?” (TIME, March 7, 2016)
Too Many Women Fall Into Poverty in Retirement,” (Financial Planning, March 8, 2016)
Here’s how debt can wreck your retirement,” (USA Today, March 8, 2016)
A Retirement Cost Reality Check, in 4 Charts,” (ThinkAdvisor, March 9, 2016)
Small balance cash-outs: The easy choice isn’t the right one,” (Employee Benefit News, March 9, 2016)
Ways to steady retirement goals during choppy markets,” (InvestmentNews, March 11, 2016)

Wisdom from Some of Our Favorite Blogs:
Nerd’s Eye View: FINRA BrokerCheck: Crucial Financial Advisor Due Diligence |
Pension Risk Matters: Financial Technology and the Fiduciary Rule |
Nerd’s Eye View: A Hierarachy Of The Value A Financial Advisor Provides |
Squared Away Blog: Study: College Debt Hurts Retirement |
Behavior Gap: Shifting Between Consumption & Creation |
fi360: Document Your Best Intentions |
The Chicago Financial Planner: 20 Best Investing Blogs of 2016 – The College Investor |
Nerd’s Eye View: Dollar Cost Averaging Manages Risk But Reduces Returns |
Behavior Gap: Investing & Politics: Our Short-Term Voting Machine |
TrustAdvisor: Changes to Social Security Replacement Rate Can Hurt Retirees |
TrustAdvisor: Why Age 70 is Crucial for Retirement Planning |
Squared Away Blog: A Familiar Dilemma: to Work or Retire |
Behavior Gap: Time to Synthesize |
Nerd’s Eye View: Psychological Profiling Tools For Financial Advisors |
fi360 Fiduciary Talk 16: Political Climate, Presidential Fiduciary Politics and Regulators |
Scholarly Financial Planner: Wall Street’s Hypocrisy and the DOL Fiduciary Rule |
The Chicago Financial Planner: The Bull Market Turns Seven Now What? |

Hot Tips from Popular Web Resources:
Kiplinger: Reverse Mortgages Get a Makeover |
NAPA Net: 10 Steps Toward Strong Participant Experiences |
NAPA Net: How Confident Are You About Retirement? |
NAPA Net: Whither Variable Annuities After the DOL Rule? |
NAPA Net: American Retirement Association to Hold Annual Business Meeting |
The Motley Fool: 3 Retirement Mistakes You Need to Stop Making Today |
NAPA Net: The Largest Barrier to Retirement Saving? |
NAPA Net: 5 Ways to Boost Retirement Confidence |
NAPA Net: Twice as Nice — Giving Back to the Community at the 401k Summit |
NAPA Net: IRS Cautions on New HR Phishing Scheme |
The Motley Fool: What the Average American’s Social Security Retirement Check Would Look Like if Cuts Are Made |
Kiplinger: Surprising Things You May Not Know About Retirement |
Morningstar: Are Nondeductible IRAs Suitable for the Long Haul? |
NAPA Net: DOL Information Filing Fans Fiduciary Flare-Up |
NAPA Net: Retirement Calculator Use Rises – But So Does Stress |
NAPA Net: The Generation Gap Also Has Gender Gaps |
NAPA Net: Lawsuit Against IRS Over VCP Administration Advances |
The Motley Fool: Can I Have 2 401k Plans at the Same Time? |
NASDAQ: How Do I Know If I’m Prepared for Retirement? |
NAPA Net: Managed Accounts Have an Interest Gap |
NAPA Net: Does Use of Proprietary TDFs Require More Due Diligence? |
NAPA Net: Senators Find Faults in CFPB’s Social Security Planner |
NAPA Net: Cracking the BeFi Code |
NAPA Net: Connecticut Coverage Mandate Could Affect Employers with ERISA Plans |
NAPA Net: How Confident Are Retirement Pros About Retirement? |
NAPA Net: Survey: Employers Should Be Required to Offer 401k Plans |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA


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