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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/4/16 Trending Topics for ERISA Plan Sponsors: Week Ending 3/4/16
March 07
03:11 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:
Retirement Plan Options for Small Business Owners” (, March 1, 2016) “Small business owners really need to have a clear understanding of all the retirement plans… Finding the right strategy will help you grow your business and save for your retirement.”

Compliance – Government Cannibalism:
When bureaucrats begin devouring each other, and incomplete legislative ideas arrive DOA, you’ve got to have a smile on your face.
DOL Retirement Income Replacement Tools Are Faulty, GAO Charges,” (Financial Advisor, March 2, 2016) It’s always fun to watch part of the government critique another part of the government.
Workers and employers would be forced to save 3% of pay under new retirement proposal,” (InvestmentNews, March 2, 2016) Good for a headline – but that’s about it.

Fiduciary – Throwing Out the Bath Water:
As we’ve learned in every science fiction movie, there’s nothing like a good old-fashioned purge to get things right again. Of course, in science fiction, it’s the evil bad guys who do the purging. In the capitalist markets, it’s the tired business models that find themselves assigned to the trash bin.
MetLife exits brokerage business as DOL rule looms,” (InvestmentNews, February 29, 2016) The new rule dooms the sale of annuities to retirement plans. But that’s the way it was originally meant to be.

Fees – Not Again!:
Really? Do we need yet another article spewing that old trope about lower expense ratios? Can’t these reporters read the facts?
Want To Really Supersize Your Nest Egg? Combine Extra Savings With Low Investing Fees,” (Money, March 2, 2016) Again with the “low expense ratio is the Holy Grail” thing? How many times do we have to see this be disproven before people finally get it?

Investments – Busting Myths:
What was in the investment reporting water this week? It seems like where ever we turned we saw another article busting someone’s favorite investment myth.
John Bogle on why great performance can be a danger sign,” (MarketWatch, February 25, 2016) This is all about “regressing to the mean” – a much underappreciated fact of life that everybody already knows about. Except for John Bogle. Apparently, index funds never regress to the mean, just actively managed funds.
Be careful when buying real estate with IRA money,” (MarketWatch, February 26, 2016) This is a warning often heeded too late to be of any real help.
ZIRP & NIRP: Killing Retirement As We Know It,” (Financial Advisor, February 29, 2016) Only in the sense the traditional fixed income option is not really viable right now given the historically low interest rate environment.
The Debate Over Monte Carlo Simulations,” (Financial Advisor, February 29, 2016) Oddly, this argument in favor of Monte Carlo Simulations does a good job explaining the folly of using Monte Carlo Simulations.
Most People Are Using Target-Date Funds Incorrectly,” (Time, March 1, 2016) Apparently folks are not forgetting what they are setting. Oops. At least it was a nice theory.
Why too much guaranteed retirement income can be a bad thing,” (CNN, March 2, 2016) Yeah, there’s this think about long-term growth that can’t be ignored.
Time to Rethink TDF Use in Retirement Plans: Financial Engines,” (ThinkAdvisor, March 4, 2016) Are there some cracks in the armor of the Target Date Fund?

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.
Who’s not meeting their retirement saving goals?” (BenefitsPro, February 26, 2016)
How employers can help workers deal with longevity risk,” (Employee Benefit News, February 26, 2016)
Using compliance reviews to prepare employers for audit,” (Employee Benefit News, February 26, 2016)
How your company match can spur greater retirement saving,” (BenefitsPro, February 26, 2016)
10 ways to improve participant experience,” (BenefitsPro, February 28, 2016)
Defined contribution plans in need of makeover,” (Employee Benefit News, February 29, 2016)
Divide between 401k participants and sponsors, study shows,” (BenefitsPro, February 29, 2016)
What Does Retirement Mean When Aging May Soon Be a Thing of the Past?” (, February 29, 2016)
How to use a Roth IRA as part of your estate plan,” (MarketWatch, February 29, 2016)
A Strategy for RMDs That an Affluent Retiree Doesn’t Need,” (Wall Street Journal, February 29, 2016)
Social Security Finally Explains Its New Claiming rules,” (TIME, February 29, 2016)
Pension vs. annuity: Which is better?” (USA Today, February 29, 2016)
401k Plan Re-enrollment Lowers Investor Costs: Vanguard Case Study,” (ThinkAdvisor, March 1, 2016)
Employers are increasing focus on retirement income solutions,” (Employee Benefit Adviser, March 1, 2016)
Get your client’s workforce ready for retirement,” (Employee Benefit Adviser, March 1, 2016)
5 key pitfalls of retirement planning tools,” (BenefitsPro, March 2, 2016)
Why employers should have confidence in the ROTH promise,” (Employee Benefit News, March 2, 2016)
How enrollment meetings help improve retirement prospects,” (Employee Benefit News, March 2, 2016)
Money market funds come under fire in spate of 401k suits,” (InvestmentNews, March 3, 2016)
Retirement Plan Sponsors Have ‘Succumbed to Short-Term Pressures’: MFS,” (ThinkAdvisor, March 4, 2016)
Slowing Growth Clouds Retirement Picture,” (Financial Advisor, March 4, 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.
4 things you need to know about the Social Security spousal benefit,” (BenefitsPro, February 24, 2016)
Is Social Security Too Generous?” (TIME, February 25, 2016)
Student debt and retirement saving don’t add up,” (CBS News, Febraury 25, 2016)
How To Figure Out The Amount of Your IRA Required Minimum Distribution,” (Forbes, February 28, 2016)
How Does The Line Of Credit For A Reverse Mortgage Work?” (Forbes, March 1, 2016)
Are you a retirement ‘have’ or a ‘have not’?” (CBS News, March 1, 2016)
Social Security Replacement-Rate Debate Matters For Clients,” (Financial Advisor, March 2, 2016)
Older women 80% more likely than men to be impoverished,” (MarketWatch, March 2, 2016)
How advisers can help workers deal with longevity risk,” (Employee Benefit Adviser, March 2, 2016)
Retirement Income 25% Lower for Women: NIRS,” (ThinkAdvisor, March 2, 2016)
How to Pay School Loans and Save for Retirement at the Same Time,” (Bloomberg Business, March 4, 2016)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: Investment Management and Stress |
Squared Away Blog: Loneliest Seniors Vulnerable to Fraud |
Behavior Gap: Funny Money |
Behavior Gap: Get a Handle on Risk: Follow the Rules YOU Set |
fi360: This Business is Personal |
Nerd’s Eye View: Google’s Nascent Robo-Advisor – Google Compare – Shuts Downs |
Behavior Gap: The Risk You Should Worry About |
Pension Risk Matters: Simplifying Investment Product Jargon |

Hot Tips from Popular Web Resources:
Kiplinger: What to Do If You Get Misinformation From Social Security |
NAPA Net: Are Financial Advisors Still Exempt from Overtime Laws? |
NAPA Net: Better Than a ‘Best’ Picture? |
NAPA Net: Clock is Ticking on the Fiduciary Rule |
NAPA Net: Why Are the States Leading on Auto-IRA the States Leading on Auto-IRA? |
Morningstar: Don’t Be Dogmatic About Retirement-Portfolio Withdrawals |
The Motley Fool: 4% Retirement Rule: Why It Might Not Work for You, and What You Should Do About It |
NAPA Net: Is Your 401k Better Off Now Than 2 Years Ago? |
NAPA Net: 4 Things Before You Get to That RFP… |
NAPA Net: MassMutual to Acquire MetLife’s Retail Advisor Force |
NAPA Net: DOL Looking for Comments on a Planned Research Project |
NAPA Net: Survey Says TDFs ‘Widely Misused’ |
NAPA Net: Smart Beta Crash Ahead? |
NAPA Net: GAO Has Some Ideas About Replacement Rates |
NAPA Net: Time Matters in Benefit Overpayment Suit |
NAPA Net: 16 Facts That Affect Women’s Retirements |
NAPA Net: Try, Try Again — A Reenrollment Case Study |
NAPA Net: Is There a ‘Market’ for Financial Adviser Misconduct? |
NAPA Net: Asset Allocation and the Changing Role of the Plan Advisor |
NAPA Net: GOP Budget Resolution Targets Fiduciary Rule |
NAPA Net: FINRA to Review BDs’ Cultural Values, Adherence to Them |

Miss anything? Feel free to add a comment below.

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About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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