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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 9/2/16 Trending Topics for ERISA Plan Sponsors: Week Ending 9/2/16
September 06
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:
How the 401k Fiduciary Can Help Retirement Savers Make Better Decisions (Part II),” (, August 30, 2016) A five-point plan all 401k plan sponsors can implement right now to help employees make better retirement saving decisions.

Compliance – The Shotgun Approach:
When you know where your target is, you use a rifle. When you have no clue where your target is, you use a shotgun. Sure, there’s collateral damage, but it’s usually too dark to see anything, so what does it matter?
DOL Move To Boost State-Run Small Business IRAs Met With Industry Ire,” (Financial Advisor, August 25, 2016) If you don’t know what all the hubbub is by now, give this article a read.
U.S. Nudges States to Help Private-Sector Workers Save for Retirement,” (Wall Street Journal, August 25, 2016) More on the story from the mainstream point of view.
Yale Professor: Raise Retirement Age To 76,” (Financial Advisor, August 25, 2016) Some people think only in terms of rearranging the deck chairs, while others think outside of the box and come up with real solutions. Lately, Yale has found itself increasingly on the stale end of ideas. And what’s with a Law School professor opining on economics?
California to launch retirement accounts for workers without pension, 401k plans,” (Mercury News, August 30, 2016) A view from the front lines.
IRS provides procedure on IRA, retirement plan rollovers,” (BenefitsPro, August 31, 2016) Another take on the above story.

Fiduciary – Do You Know the True Extent of Your Fiduciary Liability…:
…or do you only think you know? That’s an important distinction that every fiduciary best be aware of… and quick!
Staying Within Bounds,” (PLANADVISER, July/August 2016) Food for thought in the changing world of the DOL’s new Fiduciary Rule.
What Advisors May Not Know About the DOL Fiduciary Rule,” (ThinkAdvisor, August 29, 2016) Attorney Marcia Wallace lays out some sound advice.
Bankrupt 401k Fiduciary Must Still Restore Losses to Plan,” (PLANADVISER, September 1, 2016) Bankruptcy is no safe haven when it comes to a fiduciary breach.

Fees – How About Good Old-Fashioned Capitalism?:
They say there’s nothing like honest-to-goodness competition to clean up the dirtiest of markets. Rather than reign in those with high fees, why not loosen the shackles on those with low fees? That’ll clear things up right quick!
Retirement plans are among the fee-stricken,” (Employee Benefit News, August 29, 2016) In some cases, yes, in other cases, no. But never let a good meme go to waste.
Decision in AXA excessive-fee lawsuit preserves the status quo,” (InvestmentNews, August 31, 2016) The insurance industry dodges a bullet – for now.

Investments – If it’s So Obvious…:
…why have so many insisted on fighting it? Look, this isn’t rocket science folks. Actions have consequences. It’s all about psychology, not mathematics. But that’s a truth too many fear. (Why? Psychologists tend to do pretty well for themselves. And people trust them.)
The Fundamental Reason Buffett Beats The Market,” (Private Wealth Magazine, August 24, 2016) This isn’t news to many experience portfolio managers. Of course, as the article states, once everyone knows the secret, it’s not a secret anymore, and it won’t work.
Are Index Funds Eating the World?” (Wall Street Journal, August 26, 2016) You know this is getting serious when Jason Zweig spills ink on the topic. Still, been there, done that, wrote about it five years ago: “3 Reasons to Outlaw Index Investing Right Now (and One Selfish Reason Not To) in 5 Acts,” (, May 12, 2010).
Is there any value to investment policy statements?” (Employee Benefit Adviser, September 1, 2016) While it’s a growing trend to incorporate behavioral economic lessons into Investment Policy Statements (e..g., a category-based or “tiered” investment menu) and then have it flow smoothly into an employee education policy, this article appears to confuse said education policy with an Investment Policy Statement.

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.
Are 401k 3(38) Services Worth the Price?” (The 401k Specialist, August 22, 2016)
Advisers should help millennials understand hazards of tapping 401k savings,” (InvestmentNews, August 26, 2016)
Law firms risked it all on 401k fee suits – and it’s paying off,” (BenefitsPro, August 29, 2016)
Help small businesses save thousands via a quirk in pension law,” (Financial Planning, August 29, 2016)
Employee socioeconomic status could lead to premature retirement,” (BenefitsPro, August 29, 2016)
ERISA Lawsuit Calls Out TDF Fees and Revenue-Sharing,” (PLANADVISER, August 29, 2016)
The No-Taxes Retirement Plan Distribution Strategy,” (ThinkAdvisor, August 29, 2016)
How plan sponsors should respond to 401k money market fund rules,” (Employee Benefit News, August 30, 2016)
District Court dismisses 401k fiduciary breach lawsuit against Chevron,” (InvestmentNews, August 30, 2016)
A new 401k education paradigm?” (BenefitsPro, August 31, 2016)
Many 401k Participants Save Without Plan, Survey Says,” (Financial Advisor, August 31, 2016)
Chevron 401k case dismissed,” (BenefitsPro, August 31, 2016)
ERISA Suit Against Chevron DC Plan Tossed,” (PLANADVISER, August 31, 2016)
Cybersecurity concern increasing for retirement plan participant data,” (BenefitsPro, August 31, 2016)
Why College 403(b) Plans Are Such a Juicy Target for Lawsuits,” (ThinkAdvisor, August 31, 2016)
Why more advisers are telling clients not to retire,” (Financial Planning, August 31, 2016)
More Focus Should Be Given to Gen X DC Plan Participants,” (PLANADVISER, September 1, 2016)
401k Plan Fiduciaries on the Hook for More Than $200K,” (PLANADVISER, September 1, 2016)
Chevron 401k suit dismissal seen as ‘big loss’ for plaintiffs’ bar,” (InvestmentNews, September 2, 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.
What the ‘New Retirement’ Looks Like,” (Fox Business, August 25, 2016)
Roth IRAs may work for older savers after all,” (BenefitsPro, August 26, 2016)
How the Switch to 401k Plans Is Exacerbating the Wealth Gap,” (MONEY, August 26, 2016)
How To Budget For Retirement,” (Forbes, August 28, 2016)
Whether Young Or Old, Few Feel Ready For Retirement,” (Financial Advisor, August 29, 2016)
Top 10 Retirement Planning Mistakes Lawyers Make,” (ThinkAdvisor, August 29, 2016)
The secret to a happier, healthier life: Just retire,” (MarketWatch, August 29, 2016)
How one campaign is pushing workers to save for retirement,” (Employee Benefit Adviser, August 29, 2016)
Other Financial Objectives Compete with Retirement Savings,” (PLANADVISER, August 29, 2016)
One Way To Get Your 401k Investment Mix Right,” (Forbes, August 29, 3016)
Caretaking Competes With Retirement Savings for Asian Americans,” (PLANADVISER, August 30, 2016)
Never told a spouse how much money is in your 401k? You’re not alone,” (Employee Benefit Adviser, August 30, 2016)
How much guaranteed retirement income do you need?” (CNN, August 31, 2016)
One Big Tax Benefit From A Roth 401k,” (Forbes, August 31, 2016)
4 Numbers That Help You Plan for a Secure Retirement,” (MONEY, August 31, 2016)
Are you worried about running out of money during retirement?” (MarketWatch, September 1, 2016)
Prepare for the Rising Cost of Living in Retirement,” (US News, September 1, 2016)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: How the Class of 2020’s Retirement Plans Will Be Different |
Pension Risk Matters: Surveys Highlight Importance of Fiduciary Focus When Hiring Advisors |
ERISA Lawyer Blog: IRS Issues New Revenue Procedure To Help People Make IRA and Retirement Plan Rollovers |
Boston ERISA Law Blog: Thoughts From the Beach on the Excessive Fee Cases Against Prestigious Universities |
Pension Risk Matters: Con Keating Weighs In About Pension Liability Valuation |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #17 |
The Trust Advisor: How to Use CRM as Defense Against the Fiduciary Rule |
Nerd’s Eye View: IRS Eases Rules To Fix IRA 60-Day Rollover Mistakes |
The Trust Advisor: Forbes: Your IRA Can Be A Lousy Business Partner |
Data “Points”: A Matter of Time |

Hot Tips from Popular Web Resources:
NCPA: Washington Update | Retirement Reform Policy |
NAPA Net: Fiduciary Rule Opponents, Backers Make Their Case |
NAPA Net: Lawsuit Challenges TDF Selection, Excessive Fees |
NAPA Net: Sellers Beware: Buyers Are Waking Up |
Kiplinger: Common Social Security Myths |
NAPA Net: Expert Opinions on the DOL Fiduciary Regulation – Part 1 |
NAPA Net: A Matter of Time |
NAPA Net: 4 Steps to Evaluating a Financial Wellness Partner |
NAPA Net: Millennials: Digital DIY Retirement Savers? |
Morningstar: Military’s New Hybrid Retirement Plan a Mixed Bag |
The Motley Fool: This Social Security Fix Avoids Benefits Cuts |
Kiplinger: Deadline Nears to Reverse Conversion |
NAPA Net: Court Rejects Excess Fee Litigation Claims |
NAPA Net: Expert Opinions on the DOL Fiduciary Regulation – Part 2 |
NAPA Net: Are Early Claimers Making a Mistake? |
NAPA Net: IRS Relaxes Loan, Hardship Restrictions for La. Flood Victims |
NASDAQ: Couples Retirement Savings Survey: 33 Percent Aren’t Stashing Away Anything |
NAPA Net: Do Advisors Have a ‘Trust Gap’ with Asian-Americans? |
NAPA Net: Expert Opinions on the DOL Fiduciary Regulation – Part 3 |
NAPA Net: Fiduciary Training: An Opportunity for Elite Advisors |
NAPA Net: What Did August Bring for Average 401k Balances? |
Kiplinger: Preferred Stocks Offer Advantages |
NAPA Net: Expert Opinions on the DOL Fiduciary Regulation – Part 4 |
NAPA Net: Texas Court Narrows Circle of ‘Friends’ in Fiduciary Case |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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