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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 7/15/16 Trending Topics for ERISA Plan Sponsors: Week Ending 7/15/16
July 18
00:02 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:
Child IRA Special Series: This is a follow up on an idea we first wrote about a couple of years ago. Here we flesh it out to go beyond the concept and into the actual practice. The three articles answer “What is The Child IRA?” “How to do The Child IRA?” and “Who’s actually using The Child IRA?” Here are the articles (in order):
Everything You Always Wanted to Know About The Child IRA?” (, July 12, 2016) How $1,000 a year through the end of high school can give a newborn baby at $2.25 million head start to living a comfortable retirement!
How to Take Advantage of The Child IRA Under Current Laws,” (, July 13, 2016) Current or prospective parents and grandparents may be interested in looking into child modeling as a way for their children and grandchildren to generate the earnings necessary to take advantage of The Child IRA.
Who is Using The Child IRA Right Now,” (, July 14, 2016) The Child IRA is not only a great idea, it’s an active strategy being used by professionals right now.

Compliance – Destroying Private Retirement:
But for what purpose? Who will gain if there are no longer viable private retirement alternatives? If you don’t know the answer to this rhetorical question you’re not paying attention.
IRS Releases Information on Required Minimum Distributions,” (Trusts & Estates, July 11, 2016) Useful information but needlessly complicated.
Alicia Munnell Examines 6 Ways to Boost Retirement Savings,” (ThinkAdvisor, July 11, 2016) This is a mix of the old and the new which is bound to make everyone both happy and infuriated at the same time.
Regulators Propose Form 5500 Annual Report Modernization,” (PLANADVISER, July 12, 2016) A lot of talk about health benefits but not about retirement plan fee disclosure.
Big IRA and 401k plans are at risk: Where else to save?” (CNBC, July 12, 2016) Not to worry. This is just the same budget proposal from the White House we saw last year. What’s telling is how much the current occupants of the While House just don’t get it. They don’t get basic economics. They don’t get basic property rights. The basically don’t get America, or at least the Founding Fathers’ original vision for their new country.
For many multiemployer pension plans, the writing is on the wall,” (BenefitsPro, July 14, 2016) This is all about underfunded plans and de-risking. No one should be surprised. Neither should anyone be surprised if the situation gets worse. After all, these are pensions we’re talking about.
DB Determination Letters Must Include Risk Transfer Info,” (PLANADVISER, July 14, 2016) It’s not clear if the intention here is to further discourage the offering of lump-sum payouts or merely a follow-up to last year’s new year that made it more difficult for retirees to extract their assets from pensions.

Fiduciary – The Dust is Beginning to Settle:
As a result, we’re seeing less new articles and more recaps.
The ABC’s of the DOL fiduciary rule,” (InvestmentNews, July 12, 2106) A good primer for those just catching up.

Fees – After All These Years…:
Do we have the DOL to thank for the SEC’s sudden interest in pursuing 12b-1 misconduct? It’s not like they hadn’t known about this. Oh, well, at least they’re beginning to ask the right questions.
SEC Launches Exam Sweep of Advisors’ Share Class Picks,” (ThinkAdvisor, July 13, 2016) They’re coming after all those 12b-1 fees.
SEC to audit RIAs over the types of mutual fund share classes they sell to clients,” (InvestmentNews, July 13, 2016) Same story, different take. It’s clear broker-dealers better make sure all their i’s are dotted and t’s are crossed.
401k investors concentrated in low-cost mutual funds: Investment Company Institute,” (InvestmentNews, July 14, 2016) Don’t confuse this with low fees, the article is about low operating costs.
Mutual Fund Fees for 401k Investors Continue to Decline,” (PLANADVISER, July 14, 2016) This article gets it right. It’s talking about the movement towards no-load funds.

Investments – It’s this simple:
No one remembers the wrong decisions they don’t make, but those are probably some of the best “decisions” ever made.
How dumb investment decisions may be doing you in,” (MarketWatch, July 14, 2016) This is on the theme of winning by not losing.

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.
Matches Still Not Universal,” (PLANADVISER, May/June 2016 Issue)
What’s a ‘Hybrid’ 401k and Why Is It So Popular?” (The 401k Specialist, July7, 2016)
Edison International Wins Dismissal of Stock Drop Suit,” (PLANADVISER, July 8, 2016)
Target-Date Twist in Latest 401k Fee Lawsuit,” (The 401k Specialist, July 8, 2016)
‘Something has got to give’: The way people save for retirement needs to change,” (Yahoo, July 10, 2016)
Workers Better Off Mixing Traditional, Roth Accounts, Study Says,” (Financial Advisor, July 11, 2016)
Should employees be offered a Roth 401k option?” (Employee Benefit News, July 11, 2016)
Paper Reveals Benefits of Auto Features for DC Plan Sponsors,” (PLANADVISER, July 11, 2016)
10 features of small-biz retirement plans,” (BenefitsPro, July 11, 2016)
How a quirk of pension law can save thousands for clients,” (Financial Planning, July 11, 2016)
Does Your Employer Offer a Roth 401k? If Not, Your Retirement Could Suffer,” (Bloomberg, July 11, 2016)
Most Americans Haven’t Done Much Retirement Planning,” (PLANADVISER, July 12, 2016)
The future of retirement: An actuarial view,” (BenefitsPro, July 12, 2016)
How employers can optimize their 401k RFP approach,” (Employee Benefit News, July 12, 2016)
The Catch 22 of Aging, Savings and Investing Knowledge,” (PLANADVISER, July 14, 2016)
Closing The Gap In Retirement Drawdown Planning,” (Financial Advisor, July 14, 2016)
How fix a critical flaw in 401k plans,” (CBS News, July 14, 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.
10 Things Seniors Want You to Know About Managing Money,” (US News, July 7, 2016)|
Can I Unretire to Fund a Roth IRA?” (MONEY, July 7, 2016)
The Best Cities for a Worktirement,” (Fox Business, July 7, 2016)
The One Big Advantage of a 457 Retirement Account,” (MONEY, July 8, 2016)
A grandfather’s financial advice to his grandchildren,” (MarketWatch, July 8, 2016)
Tips on 2 Social Security restricted application scenarios,” (USA Today, July 10, 2016)
Mix Roth, Traditional 401k Plans for Better Outcomes,” (ThinkAdvisor, July 11, 2016)
The Smartest Financial Decision You’ll Ever Make,” (MONEY, July 11, 2016)
Relatively Few Americans Enter Retirement Debt Free,” (PLANADVISER, July 12, 2016)
Men Feel More Educated About How to Plan for a Secure Retirement,” (PLANADVISER, July 12, 2016)
Are Your Kids Ruining Your Retirement?” (MONEY, July 12, 2016)
4 Ways to Botch Your Retirement Plan,” (US News, July 12, 2016)
Would you make this sacrifice to help your child retire a multi-millionaire?” (BenefitsPro, July 13, 2016)
This common delusion can wreck your lifestyle in retirement,” (MarketWatch, July 13, 2016)
Employer retirement education boosts financial health: Dave Ramsey,” (BenefitsPro, July 14, 2016)
Social security and you: Disability benefits won’t reduce your retirement payments,” (Houston Chronicle, July 14, 2016)
Think like a farmer to build a strong retirement plan,” (Employee Benefit Adviser, July 15, 2016)
Could you live on just $32,000 per year? Most retirees do,” (USA Today, July 16, 2016)

Wisdom from Some of Our Favorite Blogs:
Scholarly Financial Planner: “Pain. Anger. Sorrow.” (The Impetus for Change?) |
Chicago Financial Planner: Avoid these 9 Investing Mistakes |
Squared Away Blog: What’s New in Public Pension Funding |
Behavior Gap: Talking About Money, Part 2 |
Squared Away Blog: Financial Anxiety Amid Economic Growth |
Behavior Gap: Talking About Money, Part 3 |
Proskauer’s ERISA Practice Center Blog: Update on Lawsuits Challenging the U.S. Department of Labor’s Fiduciary Rule |
Boston ERISA Law Blog: Floating a Few Thoughts on Kelley v. Fidelity |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #12 |
Business of Benefits: 403(b) Policy Loan’s Continued Form 5500 Reporting Problem |
The Trust Advisor: ‘Something Has Got To Give’: The Way People Save For Retirement Needs To Change |
The Trust Advisor: Five Steps Late Bloomers Can Take To Ensure A Smooth Retirement |

Hot Tips from Popular Web Resources:
NAPA Net: DOL Makes Some BIC Fixes |
NAPA Net: Do 401k Plans’ Tax Advantages Matter? |
NAPA Net: Inside the Minds of HR Professionals |
NAPA Net: Which Plans Are Targeted for Regulatory Review? |
NAPA Net: Morningstar, ARA Partner on a New Fiduciary Adviser Standard |
NAPA Net: 3 Things Retirement Savers Can Learn from Pokémon Go |
NAPA Net: DOL Releases Proposal to Revamp Form 5500 |
NAPA Net: 10 Rules on Trust from Don Trone |
The Motley Fool: Can Taxing the Wealthy Save Social Security? |
NAPA Net: GOP Policy Pokes at Retirement Provisions |
NAPA Net: Case of the Week: Failure to Suspend Deferrals after Hardship Distribution |
NAPA Net: SHRM Study Finds Nuanced Changes in Retirement Benefits |
Kiplinger: Do Not Let Election Drama Sway Investment Decisions |
NAPA Net: DOL Fires Back at Litigation Claims |
NAPA Net: The Consolidation Curve and How it Affects DC Record Keepers |
NAPA Net: IRS Now Wants a Heads Up on Risk Transfer Provisions |
NAPA Net: Kravitz: Cash Balance Boom Continues |
NAPA Net: Target Targeted in Stock Drop Suit |
NAPA Net: Reader Poll: What Could Tax Reform Do to Retirement Savings? Hint: It’s Not Good. |
NAPA Net: SEC Puts RIAs on Notice Regarding Share Class Recommendations |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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