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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/25/16 Trending Topics for ERISA Plan Sponsors: Week Ending 3/25/16
March 28
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:
7 Rollover Tips for Those with Money Still in Former Employer 401k Plans,” (, March 22, 2016) Should you stay or should you go? The answer is so obvious you don’t have to ask your hairdresser to know for sure.

Compliance – Haters Gotta Hate:
For the second week in a row we’re inundated with anti-401k stories. But even they can’t overshadow the obvious problem of state-sponsored defined benefit plans. At some point, pension liabilities will lead to a taxpayer revolt. But will it be too late to prevent a “peasants vs. the palace guard” scenario?
Is a Mandatory Retirement Savings Plan in Your Future?” (Money, March 17, 2016) A fairly comprehensive overview of the evil 401k-haters’ plot.
Obamacare for the 401k world?” (The Hill, March 21, 2016) Oops! Washington insider calls out the 401k-haters.
Does new EBRI data bolster argument for state mandates?” (BenefitsPro, March 22, 2016) The data isn’t new, it’s just a new report.
Ill. Supreme Court overturns city pension reforms,” (Chicago Sun-Times, March 23, 2016) Bad news for Chicago tax payers. This will take an amendment to the state constitutional to return to fiscal responsibility.
Bill reintroduced to push publication of pension liabilities,” (BenefitsPro, March 23, 2016) Well, this might be a bit revealing, assuming the bill becomes law. By requiring states to publicly disclose pension liabilities, voters will have a chance to see just how risky their state’s financial situation is.
Retirement savings system an ‘inefficient patchwork’,” (Employee Benefit News, March 24, 2016) They’re really pushing this. Maybe they’re hoping this constant drip-drip-drip of 401k-hate will convince the broader population to not believe their eyes.
ICI Tells California to Halt State-Run Retirement Plan,” (ThinkAdvisor, March 25, 2016) Ouch! The mutual fund industry, which could possibly benefit from state-sponsored retirement plans, is holding back support because it fears the state fees are too high (i.e., more costly than if the retirement savers used existing IRA vehicles). That must hurt.

Fiduciary – SEC in Cahoots with DOL!:
Hope and Crosby. Abbott and Costello. And now, the SEC and the DOL. Playing, for a limiting time only, in a regulation deeply affecting you!
DOL fiduciary rule will cause retirement plan advisers to outsource liability,” (InvestmentNews, March 20, 2016) Not for nothing, but this is already the case. What the new Fiduciary Rule will do will be to expose the fiduciary liability plan sponsors didn’t know they had.
SEC gave DOL help in crafting fiduciary proposal: White,” (BenefitsPro, March 23, 2016) Interesting. Who benefits from this claim?
The DOL (and SEC) Fiduciary Rule and the Two-Hat Dilemma,” (ThinkAdvisor, March 23, 2016) It’s the ol’ “sales” vs. “advice” problem. You’ll be hearing more and more about this. Of course, we interviewed Ron Rhoades about this several years ago and guess what the title was: “Exclusive Interview with Ron Rhoades: Revenue Sharing – Two Hats are Worse than One,” (, January 31, 2012).
Industry should understand being a fiduciary is right for both clients and business,” (InvestmentNews, March 23, 2016) The inimitable Carl Richards can paint a picture to describe anything.

Fees – If Conflict is the Disease, this is the Cure:
We’re starting to see the cumulative impact from all those class action suits targeting conflict-of-interest fees. But wait! There’s more! The SEC might just be gearing up to extend the effort beyond retirement plans and into formerly fiduciary free taxable account havens near you.
Total plan fees for 401k plans decline,” (BenefitsPro, March 23, 2016) Reflecting the trend since 2010, this year’s 401k Averages Book shows another, albeit slight, decline in fees. This may in part be due to high profile class action lawsuits and the subsequent reduction in revenue sharing fees.
SEC’s 12b-1 Crackdown to Go From Trickle to Deluge,” (ThinkAdvisor, March 24, 2016) Could this be the outcome of the SEC working with the DOL on the new Fiduciary Rule?

Investments – More Bad Ideas:
As if last week wasn’t enough.
Why Retirement Gets Tricky When the Stock Market is Down,” (Fortune, March 17, 2016) Nothing particularly groundbreaking in the article. On the other hand, this is a mass media outlet and, as usual, it’s that headline that tells the true story. Editors write headlines they think will appeal to or attract readers. This headline is telling you the editors from at least one mainstream publication feel people are worried.
Behind the growing popularity of target-date funds,” (Employee Benefit News, March 21, 2016) Yada, yada, yada…
How to Use a 401k or IRA to Buy Real Estate Overseas,” (Yahoo Finance, March 22, 2016) Yeah… that’s probably not a good idea.

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.
Can An ESPP Save Your Retirement?” (Forbes, March 17, 2015)
Voices: Final Weeks for Social Security ‘File and Suspend’,” (Wall Street Journal, March 17, 2016)
How to Get People to Delay Retirement,” (Wall Street Journal, March 20, 2016)
Workers Signal Uptick In Retirement Confidence,” (Financial Advisor, March 22, 2016)
How Social Security Can Cut Workers’ Benefits,” (Money, March 22, 2016)
Guiding employers toward a multi-channel healthy retirement approach,” (Employee Benefit Adviser, March 23, 2016)
Free Chipotle Gift Card if You Show 401k to Startup Blooom,” (TIME, March 23, 2016)
Employees’ retirement confidence grows, but savings still ‘alarmingly low’,” (Employee Benefit News, March 24, 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.
Five lesser-known things to consider when claiming Social Security,” (MarketWatch, March 18, 2016)
These retirement tips equal six figure savings,” (USA Today, March 19, 2016)
Solving a retirement saving puzzle,” (CBS News, March 21, 2016)
The Importance a Contingent Beneficiary for a Retirement Account,” (Wealth Management, March 21, 2016)
When delayed retirement credits are delayed,” (InvestmentNews, March 21, 2016)
Time to Get Specific with Boomers on Social Security,” (Financial Planning, March 21, 2016)
Why a Roth IRA Is Great for Young Adults,” (Money, March 21, 2016)
5 Common Mistakes Investors Make With Social Security,” (Yahoo Finance, March 21, 2016)
The Importance a Contingent Beneficiary for a Retirement Account,” (Wealth Management, March 21, 2016)
Retirement confidence plateaus in 2016: EBRI,” (InvestmentNews, March 22, 2016)
Fewer of Us Save, More Are Confident of Retirement. Are We Crazy?” (Bloomberg, March 22, 2016)
For Retirees, Giving Back Is a High Priority,” (ThinkAdvisor, March 22, 2016)
Retirement may be dicey for single women,” (CNBC, March 22, 2016)
Old 401k money: Should it stay or should it go?” (BenefitsPro, March 23, 2016)
HSA or 401k?” (Huffington Post, March 23, 2016)
Your Retirement Savings Are Big Enough, Study Shows,” (Yahoo Finance, March 23, 2016)
Impulse spending cripples millennials’ saving efforts,” (BenefitsPro, March 24, 2016)

Wisdom from Some of Our Favorite Blogs:
The Trust Advisor: Fiduciary Fracas: Congress Needs To Find The Regulators Fast |
ERISA Lawyer Blog: Seventh Circuit Rules That Plan Administrator’s Determination of Pension Offest Was Correct |
Pension Risk Matters: Fiduciary Rule: Instant Gratification or Panic |
Data “Points”: The ‘Plot’ Thickens |
Data “Points”: 5 Ways to Boost Retirement Confidence |
ERISA: Seventh Circuit Holds That A Plan Established By A Church-Affiliated Organization Is Not A Church Plan, And Therefore Is Not Exempt From ERISA |
Squared Away Blog: Rise in Fraud Reports is Unrelenting |
Behavior Gap: What If Money Can Buy Happiness? |
Nerd’s Eye View: Using A Portfolio Stress Test To Measure Diversification |
ERISA Lawyer Blog: IRS Says That Just One Multiemployer Annual Actuarial Certification Should Be Sent Per Year |
RetirementRevised: Retirement confidence improves, but actual planning lags |
Proskauer’s ERISA Practice Center Blog: On Remand, District Court Rules for the Fiduciaries in Tatum v. R.J. Reynolds |
The Chicago Financial Planner: Life Insurance Over Age 50 – Approval and Savings Tips |
Boston ERISA Law Blog: 12th National Forum on ERISA Litigation – View From the Bench |

Hot Tips from Popular Web Resources:
NAPA Net: Court Says Call Center Communication Didn’t Change Beneficiary Designation |
NAPA Net: There’s a Storm Coming – Are You Ready? |
NAPA Net: NAPA Members Fought the Bill… and the Bill Lost |
Morningstar: How Has the Retirement Bucket Strategy Performed? |
The Motley Fool: Can an Annuity Be Rolled Over to a 401k? |
NAPA Net: Retirement Confidence Remains Resilient |
NAPA Net: Reason ‘Able’ |
NAPA Net: Average 401k Fees, Revenue Sharing Continue to Fall |
NAPA Net: Employer Stock a Buffer Against 401k Loans? |
The Motley Fool: Who Is Exempt From Social Security Taxes? |
Kiplinger: Stop Paying the Hidden Fees in Your 401k |
NAPA Net: Lehman Brothers Stock Drop Case Gets Another Hearing |
NAPA Net: Most Haven’t Tried Robo Advice – and Don’t Want To |
NAPA Net: Case of the Week: Aggregation of Church Plans |
NAPA Net: SEC Seeks Funding for More Exams |
NASDAQ: Why Probability Software Is Unreliable for Retirement Planning |
NAPA Net: Study Finds Averages Alone Don’t Tell the Full Story in Active/Passive Debate |
NAPA Net: The Future of the Small DC Market |
NAPA Net: TDFs Top $1 Trillion, Still Concentrated |
The Motley Fool: What Is the Penalty for Cashing Out an IRA Certificate of Deposit? |
NAPA Net: What’s New With RFPs? |
NAPA Net: Will Referral Fees in DC Plans Survive? |
NAPA Net: Tax Reform Resurfaces on Capitol Hill |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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