What do you think of our site upgrade?
Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 10/14/16 Trending Topics for ERISA Plan Sponsors: Week Ending 10/14/16
October 17
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:
Why are Millennials Suddenly So Interested in What “Fiduciary” Means?” (, October 11, 2016) Financial professionals may have an idea of what millennials want, but millennials have their own ideas – and their “trusted” sources of information may just surprise you.

Compliance – Surprise! It’s Your Responsibility:
For all the talk about the government doing something, or your employer doing something, a look at the countries with the most successful retirement programs reveals “It’s all about you.” Yes, you are the key to retirement success, no matter what politicians would have you believe.
What U.S. Retirees Can Learn From New Zealand and Australia,” (Fox Business, October 11, 2016) Looks like we have two of the three legs (i.e., Social Security and corporate retirement plans), now all we need is robust personal savings. Um, not for nothing, but hasn’t this been the mantra for the last two generations?

Fiduciary – When Greek Tragedy Becomes Pop Culture:
We’re beginning to see “fiduciary” slowly seeping into the context of our pop culture, There’s only one question that remains: Which Hollywood script will we see first: The Oscar winning epic drama or the South Park spoof?
Morgan Stanley and Fiduciary: Never the Twain Shall Meet?” (ThinkAdvisor, October 11, 2016) Knut Rostad explains how compensation structures trump corporate policies when it comes to employee motivations and actions. And therein lies the problem with conflicts-of-interest.
This is what millennials really want to know about ‘fiduciary’,” (BenefitsPRO, October 12, 2016) This is the follow-up article to this week’s top story in

Fees – Recordkeepers Responding to Fiduciary?:
In a time when investment advisers – well, actually, financial planners –are under increased pressure to stop charging fees based on assets under management, how could recordkeepers possibly justify doing so?
Defined contribution plan fees dropped in 2015,” (Employee Benefit News, October 10, 2016) The focus is on recordkeeping fees, e.g., “Overall, the survey found that recordkeeping costs declined from $64 per participant in last year’s survey to $57 per participant in this year’s survey.”

Investments – Speaking of Changing Paradigms:
Have you noticed? There’s been a marked increase in stories questioning the practicality of the old way of thinking about investment theory and portfolio management. Can this be tied to the increased attention being paid to fiduciary.
What’s the Best Way to Keep My Retirement Portfolio Mix on Track?” (MONEY, October 6, 2016) Yes, rebalance, but only infrequently. The author is talking one every several years, not once a year (unless volatile markets make the percentages go totally out of whack).
Investing for a 115-Year Life Span – and a 50-Year Retirement,” (TheStreet, October 6, 2016) Get used to accepting more “risk” to reduce the risk of outliving your retirement funds. Or just work longer.
Time for Rate Risk ‘Refresher’ for 401k Participants?” (The 401(k) Specialist, October 10, 2016) Apparently the markets forgot about the looming Fed-inspired correction.
Kitces: The pitfalls of assessing clients’ risk tolerance,” (Financial Planning, October 11, 2016) This very long article does a good job of explaining the emerging view that “risk” contains three components: “Risk Tolerance” (How much “risk” one is willing to take); “Risk Capacity” (How much “risk” one must take to have a reasonable chance to achieve a specific objective); and, “Risk Perception” (What exactly is “risk” and why does it mean so many different things to so many different people). Now you know why the article is so long. The length, unfortunately, buries a key fiduciary point, the only element that’s relevant to the fiduciary is “Risk Capacity,” for, assuming the goal itself is reasonable, this is the only part of risk that is in the best interest of the beneficiary.
Too Little Risk Is a Dangerous Move for Retirement Savers,” (PLANADVISER, October 11, 2016) Now isn’t this a funny coincidence coming on the heels of the Kitces article above.
Should You Set a Stop-Loss on Your Retirement Account in a Bear Market?” (US News, October 11, 2016) Hmm, so it’s better to realize the loss that to simply have a multi-year emergency fund in stable value investments? Reasonable people may argue over this.
How your 401k participants can use active management,” (Employee Benefit News, October 13, 2016) While the article makes some good sense, the recommendations may not align with the facts presented. For example, the author correctly states active management offers better downside protection, especially for, again, correctly assumed by the author, for those employees who do not want full downside exposure to their equity holdings. But then the author says “efficient” asset classes should use index funds but “inefficient” asset classes should use actively managed funds. The only way this isn’t contrary to the downside protection fact is if one assumes all markets are inefficient… oh, wait, that’s right. Say no more. What a sneaky author.

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.
401k Fun: Retireholi(k)s Offers Advice With Attitude,” (The 401(k) Specialist, October 6, 2016)
Having a Philosophy Can Refocus Client on the ‘Why’ of Retirement Plan Decisions,” (PLANADVISER, October 7, 2016)
More Than Ever, Clients Want Help With Retirement Income Planning,” (PLANADVISER, October 7, 2016)
United Technologies Announces Pension Buyout, Lump-Sum Window,” (PLANADVISER, October 7, 2016)
Sanofi Defeats ERISA Stock-Drop Challenge,” (PLANADVISER, October 10, 2016)
Mixed Ruling in Wawa Stock-Drop Complaint Partial Dismissal,” (PLANADVISER, October 10, 2016)
4 tips for designing an effective employee retirement plan,” (Employee Benefit News, October 11, 2016)
6 companies with the best retirement plans,” (BenefitsPRO, October 11, 2016)
Succeeding with 401k Re-enrollments,” (Wealth Management, October 11, 2016)
How retirement ready are employees?” (Employee Benefit News, October 11, 2016)
401k Leakage ‘Linsanity’: NBA Mom Took Money to Fund Son’s Dream,” (The 401(k) Specialist, October 11, 2016)
Wells Fargo embroiled in 401k lawsuit over cross-selling scandal,” (InvestmentNews, October 12, 2016)
One way to make employees feel better about their retirement plans,” (BenefitsPRO, October 12, 2016)
Should I take social security later even if it means tapping more of my savings?” (CNN, October 12, 2016)
Are employees too intimidated for financial advice?” (Employee Benefit News, October 12, 2016)
5 Ways A Reverse Mortgage Can Help Your Retirement,” (Forbes, October 12, 2016)
U.S. Bars RBS From Managing 401k Plans In Rare Warning,” (Financial Advisor, October 13, 2016)
Coordinate Retirement Withdrawal Strategies to Generate Most Income,” (ThinkAdvisor, October 13, 2016)
Participants Move Quickly With Wells Fargo Stock Drop Suit,” (PLANADVISER, October 13, 2016)
Lawsuits, DOL Rule Blur the Line Between 403(b) and 401k,” (Financial Advisor, October 13, 2016)
Wells Fargo is your last warning: Check your 401k,” (Employee Benefit News, October 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.
Will my retirement savings support me for 30 years?” (CNN, October 5, 2016)
Can’t Sleep? 401ks Are to Blame,” (The 401(k) Specialist, October  7, 2016)
When Is the Best Time to File for Social Security Benefits?” (Fox Business, October 9, 2016)
8 Year-End Moves for Retirement Readiness,” (MONEY, October 10, 2016)
Pick Your Retirement Poison,” (Wealth Management, October 10, 2016)
Nearly Three-Quarters of Retirees Experience a Financial Shock,” (PLANADVISER, October 11, 2016)
When it comes to managing retirement savings, confusion reigns,” (MarketWatch, October 11, 2016)
Social Security checks to get a tiny increase in 2017,” (CNN, October 11, 2016)
Half of Americans ‘Very’ Confident in Meeting Retirement Goals: SSGA,” (ThinkAdvisor, October 13, 2016)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: Improving the RFP Process |
Squared Away Blog: Financial Product Legalese – it’s on You |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #23 |
Behavior Gap: Your Spending Tail May Wag the Savings Dog |
fi360: How to Manage Your Company’s Security Policy | Your TPA Sucks |
Behavior Gap: Your Clients Values Trump Yours |
Nerd’s Eye View: The Problem With Competing On Price Over Value |

Hot Tips from Popular Web Resources:
Kiplinger: Steps to Take in the Year Before You Retire |
NAPA Net: 401k Suit Survives Anti-Alienation Challenge |
NAPA Net: DOL Rule: End for Some, Beginning for Others |
NAPA Net: Merrill Announces Post-Fiduciary Regulation Shift for Retirement Accounts |
NAPA Net: Big Apple Unveils MEP, Retirement Program for Private Sector Workers |
NAPA Net: A Hallmark Holiday? |
NAPA Net: Bumpy Markets Jostled Participant Trades in Q3 |
NAPA Net: Retirees Keeping an Eye on Their Drawdown |
The Motley Fool: 5 Tax Tips for Retirees |
NAPA Net: Fiduciary Rule Set to Trigger Surge in Fund Reviews |
NAPA Net: Ready to Deal with ‘Qualified’ Money? |
NAPA Net: Most NQDC Menus Match DC Options |
NAPA Net: Passive Shift Pressures DCIOs |
NAPA Net: Cross-Selling Program Triggers 401k Suit |
NAPA Net: How Much Difference Can a 401k Make? |
NAPA Net: Hardship, 5500 Filing Relief Requested |
Kiplinger: 3 States to Avoid in Retirement |
NAPA Net: Trump, Clinton Agree on State-Run Auto IRAs |
NAPA Net: Reader Poll: How, and How Often Are Investments Reviewed? |
NAPA Net: SEC Finalizes Rules Expanding Risk, Liquidity Disclosures for Funds, ETFs |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Only registered users can comment. Login is sponsored by…

Order Your From Cradle to Retirement book today!

Vote in our Poll


The materials at this web site are maintained for the sole purpose of providing general information about fiduciary law, tax accounting and investments and do not under any circumstances constitute legal, accounting or investment advice. You should not act or refrain from acting based on these materials without first obtaining the advice of an appropriate professional. Please carefully read the terms and conditions for using this site. This website contains links to third-party websites. We are not responsible for, and make no representations or endorsements with respect to, third-party websites, or with respect to any information, products or services that may be provided by or through such websites.