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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 7/1/16 Trending Topics for ERISA Plan Sponsors: Week Ending 7/1/16
July 05
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:
Best Savings Strategies for Employees with Bad Retirement Plans,” (, June 28, 2016) Why do we encourage employees to look for blame in their company’s plan when they shoulder the bulk of the responsibility for whether or not they retire in comfort?

Compliance – The Definition of Insanity:
How many times must this be repeated? The definition of insanity is trying the same solution over and over again with the sincere belief the results will be different this time. The only time trying the same thing produces a different (usually worse) result is when Hollywood remakes and old film. In both cases, we’re seeing the awful fruits of a lack of imagination.
America isn’t saving enough for retirement. Can that be fixed before it’s too late?” (Los Angeles Times, June 27, 2016) File this under the category “Never Waste a Good Crisis.” The funny thing is that by the time this article propagated across the internet, the crisis it was referring to (the market’s reaction to Brexit), already dissipated.
How to shore up Social Security for 75-plus years,” (CBS News, June 28, 2016) If you ever wanted to see what inside-the-box (a.k.a. Beltway) thinking is like, read this article. It’s a repetition of past ideas that merely kicked the Ponzi can down the road.

Fiduciary – Interesting Twists:
Is Borzi signaling concessions in the guise of clarification? Or does she really mean closing some loopholes by tightening up some of the language? In the meantime, perhaps the industry is only now beginning to understand how truly comprehensive the meaning of fiduciary is.
DOL Fiduciary Rule May Need Some Tweaks: Borzi,” (ThinkAdvisor, June 29, 2016) We’re talking clarification, not any major changes.
Professionals and Conflicts of Interest: Not Hard to Gauge,” (ThinkAdvisor, June 29, 2016) Interesting thoughts on the impact of “fiduciary” beyond investments.

Fees – Behavioral Subtleties:
We all want people to make the best decisions. To encourage this, we provide incentives for making correct decisions and disincentives for making incorrect decisions. This applies equally to plan participants, plan sponsors, and plan service providers.
DOL fiduciary rule will nudge 401k advisers to zero-revenue-share fund lineups,” (InvestmentNews, June 28, 2016) Which is precisely where they should be. The trouble, of course, is that, unlike commissions and 12b-1 fees, revenue sharing is not always obviously disclosed in the mutual fund prospectus.

Investments – Why Market Timing Fails:
There’s this thing in physics called the “Heisenberg Uncertainty Principle.” It means you cannot precisely determine two complimentary factors describing a particle at the same time. For example, the more you know about the velocity of a sub-atomic particle, the less you know about its exact location. And vice-versa. Similarly, the more certain you are of the direction of the market’s next move, the less likely you’ll know when that move will occur.
401k providers see participant calls surge in wake of historic Brexit,” (InvestmentNews, June 24, 2016) As with all things, what goes up must come down and what goes down must go up. Only the disciplined will thrive in these circumstances.
Why you shouldn’t abandon bonds,” (CNN, June 29, 2016) Just because people are saying rates are going to rise doesn’t make them any more correct today than it did five years ago.

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.
Why employers don’t offer retirement plans,” (BenefitsPro, June 22, 2016)
Tweak to retirement plan rule will have more employers filing 4010 reports,” (Employee Benefit Adviser, June 22, 2016)
Retirement income calculators: What to know about their projections,” (BenefitsPro, June 24, 2016)
Small companies lag in retirement offerings,” (Employee Benefit News, June 24, 2016)
Should HSAs and 401k plans be more closely linked?” (Employee Benefit News, June 26, 2016)
Supreme Court Denies Petition for GM 401k Company Stock Case,” (PLANADVISER, June 27, 2016)
Planners Help Boomers Figure Best IRA, 401k Withdrawal Strategies,” (Financial Advisor, June 27, 2016)
Should We Base Retirement Income Planning On Historical Data?” (Forbes, June 28, 2016)
DOL Seeking Nearly $6M from ESOP,” (PLANADVISER, June 28, 2016)
More Small Businesses Improving DC Plan Design,” (PLANADVISER, June 28, 2016)
Most retirees get little advisor help on Social Security: Study,” (CNBC, June 28, 2016)
Stop getting 401k participants worked up about nothing,” (BenefitsPro, June 29, 2016)
Transamerica settles 401k excessive-fee lawsuit with its employees for $3.8 million,” (InvestmentNews, June 29, 2016)
Fellow of Society of Actuaries Suggests New Retirement Spending Rule,” (PLANADVISER, June 29, 2016)
Small businesses less generous with 401k contributions: Vanguard,” (InvestmentNews, June 29, 2016)
Fiduciaries of Small 401k Off the Hook for Excessive Fee Suit,” (PLANADVISER, June 30, 2016)
401k Participation Up 19% From 2011: Wells Fargo,” (ThinkAdvisor, June 30, 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.
This simple retirement spending strategy takes on the 4% rule,” (InvestmentNews, June 22, 2016)
For U.S. Retirees, 2017 COLA Lacks Fizz,” (Wealth Management, June 23, 2016)
6 challenges to achieving retirement security,” (CBS News, June 24, 2016)
Does a Stretch IRA Always Make Financial Sense?” (Wealth Management, June 24, 2016)
Here are some tips for divvying up your retirement investments,” (Los Angeles Times, June 26, 2016)
Nonprofit Work After Retirement? Maybe You Can Make It Pay,” (The New York Times, June 26, 2016)
Planners Help Boomers Figure Best IRA, 401k Withdrawal Strategies,” (Financial Advisor, June 27, 2016)
What the Brexit means for your retirement,” (Yahoo, June 27, 2016)
The biggest mistakes executives make with retirement packages,” (MarketWatch, June 27, 2016)
Your boomerang kid may be sabotaging your retirement,” (Chicago Tribune, June 27, 2016)
Americans Are Afraid Of Longer Life,” (Financial Advisor, June 27, 2016)
5 Challenges Facing the Next Wave of Retirees,” (ThinkAdvisor, June 28, 2016)
It’s time for boomer clients to spend — and pay taxes on — their 401k,” (On Wall Street, June 28, 2016)
6 things you can do in your 20s and 30s to retire wealthier,” (MarketWatch, June 28, 2016)
Smaller employers far less likely to offer 401k plans,” (Employee Benefit News, June 28, 2016)
Aging parents: Your adult kids aren’t total ingrates like you think they are,” (Yahoo Finance, June 28, 2016)
Strapped retirees are turning to reverse mortgages,” (CNBC, June 28, 2016)
Catch-22: Too young to retire, too old to rehire,” (CNBC, June 29, 2016)
6 Ways to Profit From the Sharing Economy in Retirement,” (US News, June 29, 2016
How retirement planning for childless couples is different,” (USA Today, June 29, 2016)
What Americans get wrong about retirement and what they fear,” (BenefitsPro, June 30, 2016)
What would your 90-year-old self tell you to change today?” (MarketWatch, June 30, 2016)
Will You Regret Taking Social Security ASAP?” (Fox Business, June 30, 2016)
Millennials can save more for retirement by learning from baby boomers’ mistakes,” (MarketWatch, June 30, 2016)

Wisdom from Some of Our Favorite Blogs:
The Chicago Financial Planner: Brexit and Your Portfolio |
fi360: Podcast: Talk 31 – DOL Rule from a Sales vs. Advisory Cultural Perspective |
Squared Away Blog: Not All Baby Boomers Can Work to 70 |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #11 |
Business of Benefits: MEPS Aren’t What They Are Seem; Alternative More Efficient at Achieving Scale |
Pension Risk Matters: Pensions and Politics |
Nerd’s Eye View: Non-Spouse Beneficiaries Rules For An Inherited 401k |
Behavior Gap: Your Market Viewpoint: 5 Days or 5 Years |
The Trust Advisor: The Retirement Puzzle: How To Live On 60% Of Your Income |
Squared Away Blog: 401k Investment Options: Less is More |
Behavior Gap: Detoxing Your Clients from Financial Pornography |
A NEW WAY TO FOUR01K: Cheap 401k Fees Are Not The Answer |

Hot Tips from Popular Web Resources:
NAPA Net: What Will Brexit Bring? |
NAPA Net: Legislation to Call for Federal Mandate on Retirement Savings, Matches |
NAPA Net: The Financial Literacy Paradox |
Kiplinger: How to Take Your First Required Minimum Distribution |
NAPA Net: Industry Preps for DOL Fiduciary Rule |
NAPA Net: 4 Things Plan Fiduciaries Have in Common With the Second Continental Congress |
NAPA Net: Study Finds Different Retirement Calculators Give VERY Different Results |
The Motley Fool: Can Waiting Until 70 to Claim Social Security Be a Big Blunder? |
NAPA Net: $3.8 Million Settlement Struck in Excess Fee Suit |
NAPA Net: Wellness Programs Under Scrutiny |
NAPA Net: Excessive Fee Lawsuit Dismissed – by Plaintiffs |
NAPA Net: Case of the Week: Is Electronic Documentation Adequate for Hardship Distributions? |
NAPA Net: It’s Official: IRS Trims Determination Letter Program |
Kiplinger: Americans Need To Stop Winging Their Retirements |
NAPA Net: How Much Did 401k plans Lose to Brexit? |
NAPA Net: What Did You Say? Differences in Male/Female Communication |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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