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FiduciaryNews.com Trending Topics for ERISA Plan Sponsors: Week Ending 4/15/16

FiduciaryNews.com Trending Topics for ERISA Plan Sponsors: Week Ending 4/15/16
April 18
00:05 2016

Welcome to FiduciaryNews.com 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:
New Fiduciary Rule: What the DOL Got Right, Came Close on, and Missed Entirely,” (FiduciaryNews.com, April 12, 2016) Any regulation that requires 10 pages of explanation for every page of regulation is bound to have something good, something not-quite-good-enough, and something not-so-good.

Compliance – Stop Them Before They “Help” Us Again!:
How many times must we be warned that the worst thing that can happen is the government trying to solve the problem? The Founding Fathers believed individuals should be free to fail or succeed on their own. They purposely designed a system where it was nearly impossible for the government to successfully intervene with the natural order of individual rights. Call it the “Prime Directive” two centuries before Gene Roddenberry came up with the idea.
Could U.K. retirement program expansion offer U.S. answers?” (BenefitsPro, April 11, 2016) It’s called a government sponsored 401k, and the British government collects a front-end load of 1.8% of all savings, which, by the way are mandatory. Sounds like they’ll need a BICE to get anywhere near American retirement savers money to do that. Which brings up the following questions: Do the increasingly popular state-mandated retirement programs violate the DOL’s new Fiduciary Rule?
Secure Choice: For whose benefit?” (BenefitsPro, April 13, 2016) There are a lot of naked emperors running around out there, and California might just be the biggest of them all.
Fiduciary Rule Won’t Solve Retirement Savings Crisis,” (Wealth Management, April 13, 2016) The Fiduciary Rule was never meant for this purpose. The original objective of the Fiduciary Rule was to level the regulatory playing field between service providers that are currently subject to different regulatory regimes. Of course, the purpose then morphed into how to best “preserve” all business models – the exact opposite of the original objective.

Fiduciary – It’s All Over But the Shouting:
JK, the shouting has hardly begun.
SIFMA Applauds Some Changes In DOL Rule,” (Financial Advisor, April 8, 2016) Not surprising. They got most of what they want. They still found space to complain about what they didn’t get, though.
SIFMA says DOL fiduciary rule pertaining to IRA rollovers still too restrictive,” (InvestmentNews, April 8, 2016) Apparently they needed more space.
DOL fiduciary rule lumps FIAs with VAs,” (BenefitsPro, April 8, 2016) Apparently, their lobbying group was not as effective as others.
The fiduciary rule: Key question for advisers remains,” (Employee Benefit Adviser, April 11, 2016) Another expert repeats the same message found here: “A fiduciary rule that’s better than ‘Best Interests’,” (BenefitsPro, April 6, 2016).
DOL Fiduciary Rule: The Good, the Bad and the Ugly,” (ThinkAdvisor, April 11, 2016) A good lobbyist never sees the glass 80% full, he sees it as 20% empty.
Financial Planning Coalition ‘Applauds’ DOL Fiduciary Rule,” (ThinkAdvisor, April 11, 2016) With friends like this…
How will the DOL enforce its fiduciary rule?” (InvestmentNews, April 12, 2016) You’ve heard of “crowd-funding” and “crowd-sourcing”? This is “crowd-enforcing.” It’s not meant to be mob rule, but who knows how it will turn out.
DOL Fiduciary Rule: A Simple Solution,” (ThinkAdvisor, April 13, 2016) What Bob Clark is saying is that we need to get rid of dual registration. He’s not really saying that, but that’s what he’s saying.
After DOL Rule, SEC Inches Toward Uniform Fiduciary Standard,” (Financial Planning, April 13, 2016) Yeahno. The SEC has too many other issues to deal with this right now.
Give the DOL an ‘A’ for effort,” (BenefitsPro, April 13, 2016) With an extended implementation date and the prospect of a Republican presidency, in the end, the effort probably amounts to nothing.

Fees – Life Gets More Confusing:
By failing to identify the truly conflicts-of-interests (i.e., the “bad” fees of commissions, 12b-1 fees, and revenue sharing), we’ve just opened the door for more confusion. Welcome to the New World.
Why Taxes, Not Fees are Retirement Savers’ Biggest Enemy,” (Fox Business, April 7, 2016) This is an interesting idea. In short, an extra percent in fees can eat up about a third of your retirement savings. In addition, taxes will eat up around a third of your retirement savings. You can do something about the fees. What can you do about the taxes? (Hint: The solution has four letters – until the government says it doesn’t.)
What is ‘reasonable’ cost under DOL’s fiduciary rule? Well, it depends,” (InvestmentNews, April 11, 2016) It depends on what the tort attorneys eventually extract from the courts.
The new fiduciary rule: A potential catch-22,” (Employee Benefit News, April 13, 2016) The problem is “best interest” is not defined and too many are defining it, as this author does, as lower fees. Trouble is, the studies show it’s not low fees or high fees, it’s which fees. Read this article instead: “A fiduciary rule that’s better than ‘Best Interests’,” (BenefitsPro, April 6, 2016).

Investments – Framing Investments for a Fiduciary World:
It’s almost like you’re guilty before proven innocent.
A deferred-income annuity may help you get more cash later,” (MarketWatch, April 7, 2016) This is pretty much a sales pitch, but it’s always good to see a sales pitch, just so you know what’s going on when you get one.
Target-Date Funds Are Simple, but They Still Require Careful Aim,” (The New York Times, April 9, 2016) Could it be the mainstream media is finally catching on to TDFs?
Which Is Better For Retirement Income: Insurance Or Investments?” (Forbes, April 12, 2016) The author maintains it’s not an “either/or,” but only offers the same-old/same-old when it comes to justifying insurance. Will we ever know the real answer?
Retirement yield may return to norm in 10 years: TIAA CEO,” (CNBC, April 12, 2016) If you’ve got the 10 years, that is.
CITs gaining ground in 401k plans,” (Employee Benefit News, April 14, 2016) Once again, it’s because CITs don’t have the regulatory burden imposed the SEC on mutual funds.
Indexed Annuities Run Afoul of DOL Fiduciary Rule,” (ThinkAdvisor, April 14, 2016) They’ll have to use the BICE.

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.
Baby boomers report lack of confidence in retirement savings,” (Employee Benefit News, April 11, 2016)
5 things plan sponsors should know about the DOL’s fiduciary rule,” (Employee Benefit News, April 11, 2016)
Workers reporting greater optimism about retirement savings, yet still anxious,” (Employee Benefit News, April 12, 2016)
Boomers not moving beyond 401k plans, IRA plans,” (Employee Benefit Adviser, April 12, 2106)
When you look in on that senior, see about their financial security, too,” (The Washington Post, April 13, 2016)
4 benefits small businesses should prioritize,” (Employee Benefit News, April 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.
Understanding The Tools In Your Retirement Income Toolbox,” (Forbes, April 7, 2016)
Nearly retired? Ask 3 questions to keep your money safe,” (USA Today, April 9, 2016)
Why Do More Boomers Think They’re On A Sinking Retirement Ship?” (Financial Advisor, April 11, 2106)
Why Retirement Reality Is Finally Sinking In for Baby Boomers,” (Money, April 11, 2016)
Why a lump-sum payment should be part of Social Security,” (MarketWatch, April 11, 2016)
ICYMI: Here’s why raising the retirement age is a terrible idea,” (Los Angeles Times, April 11, 2016)
Social Security Q&A: What If I Can’t Get An Appointment Before May?” (Forbes, April 11, 2016)
One in Three Americans Have Nothing Saved for Retirement,” (Fox Business, April 11, 2016)
Safe withdrawal rates from retirement plans still unclear,” (BenefitsPro, April 12, 2016)
Max Out 401k And IRA: Why You Shouldn’t,” (Bankrate, April 12, 2016)
Looking for Retirement Jobs? 4 Things to Consider,” (Money, April 12, 2016)
What to do so you can retire early,” (MarketWatch, April 12, 2016)

Wisdom from Some of Our Favorite Blogs:
Nerd’s Eye View: Best Interests Contract Exemption Under DOL Fiduciary |
The 401k Plan Blog: The Real Threat – State Run Plans |
ERISA Lawyer Blog: DOL Finalizes New Definition Of Fiduciary |
Squared Away Blog: White-Collar Jobs Age-Sensitive Too |
Behavior Gap: Choose To Be Uncomfortable |
RetirementRevised: Free guide explains phase-out of Social Security file-and-suspend option |
Nerd’s Eye View: How Do You Measure The Best Retirement Income Strategy? |
Behavior Gap: Doing Things That Might Not Work |
Squared Away Blog: Why Most Elderly Pay No Federal Tax |
fi360: Tweaks to final DOL fiduciary rule |
Fred Reish: An Overview of the Fiduciary Rule |
RetirementRevised: Going back for a doctorate at mid-life and beyond |
RetirementRevised: Retirement planning 101 for young people |

Hot Tips from Popular Web Resources:
Kiplinger: Medicare, Social Security and Your HSA |
NASDAQ: How a Better FICO Score Leads to Better Retirement |
NAPA Net: The Final Fiduciary Regulation: A Game Changer |
NAPA Net: Are Concerns About Lifetime Income Portability Still Valid? |
NAPA Net: Could Your 401k Be Disqualified by a Forfeiture Account? |
Society for Human Resource Management: How the DOL Fiduciary Rule Will Affect Plan Sponsors |
The Motley Fool: How to Plan for Retirement in Your 30s |
NAPA Net: Maryland’s State-Run IRA Bill Heads for Governor’s Signature |
NAPA Net: 5 Reasons to Plan and Save for Retirement Now |
NAPA Net: 4 Best Practices for Constructing a Plan Investment Menu |
NAPA Net: Women’s Retirement Challenges Belied by Their Assumptions |
NAPA Net: What Will the ‘Tomorrowland’ of Retirement Look Like? |
NAPA Net: Case of the Week: Form 5500’s New Compliance Questions |
NAPA Net: Participant Traders Looked for Shelter in Q1 |
NAPA Net: Most Don’t Know Good Drawdown Rate – But it’s Getting Closer |
NAPA Net: Tibble Gets Another Shot, But Comes Up Short |
NAPA Net: DCIOs Adjusting to ‘New Realities’ |
NAPA Net: TDFs Still Climbing; No Peak in Sight |
NAPA Net: Big Settlements and the Plan Advisor |
NAPA Net: Ready or Not? Readers Weigh in on Fiduciary Regulation |
NAPA Net: Treasury, IRS Pull Back on Cross-Tested Plan Changes |
NAPA Net: DOL Rule Affects Advisor Searches |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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