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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 8/5/16 Trending Topics for ERISA Plan Sponsors: Week Ending 8/5/16
August 08
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:
The Three Biggest Mistakes Retirement Savers Make During Down Markets,” (, August 2, 2016) It is critically important that retirement savers make a long-term game plan for their savings and investing strategy.

Compliance – New Dire Prediction for Social Security:
Well, that’s what eventually happens to all Ponzi Schemes.
Why 401ks Are More Important Than Ever,” (The 401(k) Specialist, July 25, 2016) A Wharton professor has revised the Social Security projections and now finds the government pension plan will run out of money earlier than expected – 2031.
4 versions of the Best Interest Contract Exemption,” (BenefitsPro, August 1, 2016) A good run-down by Marcia Wagner of the practical implications of the DOL’s new rule.
IRS Explains What Plan Sponsors Should Do With Compliance Statements,” (PLANADVISER, August 3, 2016) The list includes typical failures and recommended corrections.

Fiduciary – A Falling Tree:
The crazy thing is, questions about IRA Rollovers under the new Fiduciary Rule and the lack of any real teeth in the enforcement of the new Rule are related. For example, what if that court case which is bound to happen turns out to favor the defendant? Then it will have defined an incredibly wide loophole in the Rule. You can then be sure you will soon see many trucks being driven through it.
Rollovers Under the Fiduciary Rule,” (PLANADVISER, May/Jun 2016) A good run down of one possible set of rules. The truth is we won’t know the real rules until the first successful court case involving a fiduciary breach under the new Rule.
Proposed: The DOL Fiduciary Standard Is Unworkable,” (ThinkAdvisor, August 3, 2016) Said another way: If a regulation is unenforceable, does it really exist at all?

Fees – When It Rains It Pours:
Forget IRA Rollovers. The first line of defense will be “fees that matter,” with the lowest hanging fruit being index fund expense ratios and actively managed funds share class conflict-of-interest fees.
Worry Over 401k Fees Rises as Lawsuits Increase,” (ThinkAdvisor, August 5, 2016) Given the number of 401k fee lawsuits we’ve seen in the past couple of weeks, should this surprise anyone?

Investments – Two Sides of the Same Coin:
Sometimes the simplest solutions are the best. Trouble is, it’s hard to justify a high fee unless you’ve got a complex resolution.
Weighing Sequence Of Returns Risk For Retirees,” (Forbes, August 2, 2016) Sequence of returns risk is a real risk. But is the cure worse? And is there a simpler solution?
Personal Liquidity and Emergency Cash Challenges for Retirees,” (PLANADVISER, August 3, 2016) This is why asset allocation can get you in trouble. You always want to have an emergency cash bucket. That’s the most important “asset allocation” strategy you should employ.

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.
Is your company prepared for a DOL investigation?” (BenefitsPro, July 28, 2016)
Post-DOL: Time to Consider 3(21) and 3(38) Services?” (Wealth Management, July 29, 2016)
Employers Want To Do More To Help You Save For Retirement,” (Forbes, July 30, 2016)
Employers urged to tap automatic 401k plans,” (Employee Benefit News, August 1, 2016)
Sizing up online retirement calculators,” (Financial Planning, August 1, 2016)
Plan sponsors getting through to millennials on retirement,” (Employee Benefit News, August 1, 2016)
Employers urged to tap automatic 401k plans,” (Employee Benefit News, August 1, 2016)
What the DOL fiduciary rule means for HSAs,” (BenefitsPro, August 2, 2016)
State Street to pay ERISA plan clients $60 million in settlement,” (BenefitsPro, August 2, 2016)
Franklin Templeton latest asset manager accused of self-dealing in 401k plan,” (BenefitsPro, August 2, 2016)
Good news for retired clients: COLA and TIPS,” (BenefitsPro, August 2, 2016)
Brexit shows the importance of account consolidation,” (MarketWatch, August 2, 2016)
Retirement plan participation rates vary by sector, geography,” (BenefitsPro, August 2, 2016)
Brexit shows the importance of account consolidation,” (MarketWatch, August 2, 2016)
5 Views on Improving Your Retirement,” (Wall Street Journal, August 2, 2016)
These Young Savers Have Big, Fat 401k Plans,” (Financial Advisor, August, 3, 2016)
How to help your 401k participants make better investment decisions,” (Employee Benefit News, August 3, 2016)
Using online tools to shape retirement targets,” (On Wall Street, August 3, 2016)
Neuberger Berman sued for excessive 401k fees,” (InvestmentNews, August 4, 2016)
Form 5500 changes could increase obligations for plan sponsors,” (Employee Benefit Adviser, August 4, 2016)
Adopting a coaching mindset to help employees plan for retirement,” (BenefitsPro, August 4, 2016)
Are Roth IRA Investors Different from Traditional IRA Investors?” (Financial Advisor, August 5, 2016)
How the fiduciary rule is affecting 401k rollovers,” (Employee Benefit News, August 4, 2016)
The hidden threat to 401k plans,” (Employee Benefit Adviser, August 5, 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.
Americans seek raises, even in retirement income,” (BenefitsPro, July 26, 2016)
How to retire without regrets,” (The Washington Post, July 30, 2016)
Olympic dreams lead some parents to shortchange retirement savings,” (USA Today, August 1, 2016)
Of Retirement Age, but Remaining in the Work Force,” (The New York Times, August 1, 2016)
How To Make Longer Working Lives Work,” (Forbes, August 1, 2016)
How not to die hungry: Turn your 401k into a pension,” (Employee Benefit Adviser, August 1, 2016)
Wealthier retiree households rely on financial accounts,” (BenefitsPro, August 2, 2016)
When is it OK to skimp on retirement saving?” (On Wall Street, August 2, 2016)
Getting Social Security statements will now be more annoying for some,” (MarketWatch, August 2, 2016)
To achieve success, retirement savers must ‘Know Thyself’,” (BenefitsPro, August 3, 2016)
Millennials Think $1 Million Retirement Nest Egg Is Impossible,” (PLANADVISER, August 3, 2016)
Parents put kids’ college savings above retirement, study says,” (BenefitsPro, August 4, 2016)
Good collaboration can pave the way for a secure retirement,” (Financial Planning, August 5, 2016)

Wisdom from Some of Our Favorite Blogs:
Boston ERISA Law Blog: Two Reasons Why the Department of Labor’s New Fiduciary Regulations Are Likely to Spawn More Litigation Against Financial Advisers |
The Retirement Plan Blog: The cost of ERISA non-compliance just got more expensive |
ERISA Lawyer Blog: IRS Provides A Note On Correcting Required Minimum Distribution Failures |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #14 |
Nerd’s Eye View: The Potential Problem With Tax-Managed Mutual Funds |
Behavior Gap: Finding Enough Before it Becomes Too Much |
The Trust Advisor: Savvy Ways To Withdraw Retirement Funds |
Nerd’s Eye View: The Problem With Reverse Churning In Advisory Accounts |
Squared Away Blog: Social Security Credits for Moms? |
RetirementRevised: Will government workers facing Social Security cuts get relief? |
Pension Risk Matters: Valuing Public Pension Fund Liabilities |

Hot Tips from Popular Web Resources:
Kiplinger: His and Her 401k Death Benefits |
NASDAQ: Cash-Strapped in Retirement? Time to Research Refinancing |
NAPA Net: IRS Backs Off Requiring Unpaid RMD Disclosures on 5500 |
NAPA Net: How Long Is Your Workweek – and Is it Affecting Productivity? |
NAPA Net: Orphan Plans Under the DOL Rule |
NAPA Net: Average 401k Balances Bounce Back in July |
NAPA Net: The Cost of Complying with the DOL’s Fiduciary Regulation |
NAPA Net: 5 Ways Industry Surveys Can Be Misleading |
NAPA Net: Proprietary Funds Prompt Another Participant Suit |
NAPA Net: What Sponsors Want From Their Advisors |
NAPA Net: Stable Value Fees Again Draw Excessive Fee Suit
NAPA Net: Case of the Week: ERISA Fidelity Bond vs. Fiduciary Liability Insurance |
NAPA Net: Consistent Millennial Savers Set Record |
NAPA Net: DOL Offers $100,000 Grant to Spur Retirement Plan Ideas |
Kiplinger: Beware the Hidden Costs of Mutual Funds |
Kiplinger: 6 Costly Retirement Planning Mistakes |
NAPA Net: Another Proprietary Fund Offering, Another Lawsuit |
NAPA Net: 401k Heaven is Real – But so is 401k Hell |
NAPA Net: Despite Student Debt, Millennials Making Room for Retirement |
NAPA Net: Think Tax Reform Can’t Happen? Think Again |
NAPA Net: Does Your Work Week Make Your Work Weak? |
NAPA Net: How Will the Fiduciary Rule Change Paid Adviser Recommendations? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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