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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 9/30/16 Trending Topics for ERISA Plan Sponsors: Week Ending 9/30/16
October 03
00:05 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:
Reality Sets In: How New Fiduciary Rule Impacts 401k/IRA Providers and Retirement Savers,” (, September 27, 2016) Even if a President Trump rescinds the DOL’s Conflict-of-Interest Rule, the spirit of the Rule may live on.

Compliance – We’re On a Collision Course:
Well, this oughta be interesting. Washington is finally starting to move forward on what many have called the long awaited best answer to help place more people in the ideal retirement plan. At the same time, the states – led by the largest of them all – are moving forward with plans of their own. One solution offers individual choice. The other offers state mandates. Which do you think is in the best interest of the retirement saver?
Haters Hate: Writer Cynically Rips, Unintentionally Praises, 401ks,” (The 401(k) Specialist, September 23, 2016) Read the article for the Ted Banna quotes.
Bill Would Allow Small Employers to Participate in Open MEPs,” (PLANADVISER, September 23, 2016) In case you missed this, read up on it. It can be a game changer.
Tie Retirement Savings Plans To Workers, Not Employers, Study Says,” (Financial Advisor, September 23, 2016) Again, this has been said before many years ago, (see “401k 2.0 – A Proposal,”, December, 7, 2010).
Community Property: When Federal-State IRA Rules Collide,” (ThinkAdvisor, September 26, 2016) This is just the tip of the iceberg. Wait until the disparity between ERISA and state-run private retirement plans becomes more apparent.
Pension Protection Act improved retirement prospects for many workers,” (Employee Benefit News, September 26, 2016) Here’s something interesting to consider: This is the last time the government, the industry, and academia agreed on retirement policy.
Don’t discount a youth-driven Social Security revolution,” (BenefitsPRO, September 28, 2016) Baby boomers have no on to blame for this save themselves. They were the “youth” in 1982 when this whole government sanctioned Ponzi Scheme could have been eliminated.
Gov. Brown signs Secure Choice Retirement Savings Act into law,” (BenefitsPRO, September 28, 2016) Folks in California need to be fully aware of this, it’s upsides and it’s downsides.

Fiduciary – The Other Side of the DOL’s Rule:
It turns out there’s another side to the Fiduciary Rule story. It’s one we haven’t heard much from. It’s the one that finally offers balanced fairness. And now, those it represents are poised to attack.
Advisors Can Define the New Fiduciary Advisor/Client-Centric Paradigm,” (ThinkAdvisor, September 27, 2016) Follow this story all the way through. Knut Rostad lays out a pretty solid framework.
SEC Reviewing Third-Party Exam, Fiduciary Rule Plans, White Says,” (ThinkAdvisor, September 27, 2016) Think about this, the SEC might be able to trump the DOL, even if Trump manages to rescind the DOL’s Rule.
The underreported fiduciary rule story,” (BenefitsPRO, September 28, 2016) In a world of noises, sometimes it’s the silence that’s most interesting. Take the DOL fiduciary rule, for example.
Second Circuit Affirms Fiduciary Liability for Poor Diversification,” (PLANADVISER, September 29, 2016) This should remind everyone that being a fiduciary means more than just monitoring fees.

Fees – Much Ado About Nothing:
If only all this spilled ink had any real meaning.
Are 401k Middlemen Gouging You? Five Questions To Ask,” (Forbes, September 26, 2016) While these are good (not great) questions, they’re being directed at the wrong party. The participant may ask these questions, but the participant does not have the authority (or responsibility) to do anything about them. Only the plan sponsor has the authority (and responsibility) to both ask these questions and do something about them.

Investments – Straining:
When there’s not a lot of excitement in the markets, there’s not a lot of writing on investments.
Evaluating target-date funds through the prism of the DOL fiduciary rule,” (InvestmentNews, September 25, 2016) To be honest, no one is really sure what will hold up when the first challenge hits the courts and what won’t hold up.
Finke: Keys to Retirement Planning in a Low-Yield World,” (ThinkAdvisor, September 26, 2016) Yes, investments have consequences.

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.
Fines Skyrocket for 401k Plan Sponsors Over Lost Participants,” (The 401(k) Specialist, September 20, 2016)
Social Security Should Give Seniors Better Advice About When to Start Benefits,” (MONEY, September 22, 2016)
Older workers and the search for ‘good’ jobs,” (CBS News, September 22, 2016)
DOL Accuses Company of Failing to Make Contributions to 401k,” (PLANADVISER, September 23, 2016)
Tie Retirement Savings Plans To Workers, Not Employers, Study Says,” (Financial Advisor, September 23, 2016)
Pittsburgh-Area Hospital System Files Provider Lawsuit,” (PLANADVISER, September 23, 2016)
Are Clients in Denial About Retirement Readiness?” (Financial Advisor, September 23, 2016)
District Court to Take Another Look at BP Stock Drop Suit,” (PLANADVISER, September 28, 2016)
DB Annuitization May Be More Costly Than Maintaining the Plan,” (PLANADVISER, September 28, 2016)
The appeal of after-tax executive retirement plans,” (Employee Benefit Adviser, September 28, 2016)
Millennials Eye Benefits Closely While Assessing Employers,” (PLANADVISER, September 28, 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.
Why Baby Boomers May Never Get Old,” (Fox Business, September 22, 2016)
Many Women Will Be Single in Retirement. Are You Ready?” (US News, September 23, 2016)
Older Americans Are More Afraid of Running Out of Money Than Death,” (Fox Business, September 25, 2016)
The Retiree With Six Incomes,” (Forbes, September 25, 2016)
71 percent of Americans aren’t saving enough for retirement,” (The Washington Post, September 26, 2016)
13 Tips for Singles Nearing Retirement,” (US News, September 26, 2016)
How to get the biggest Social Security check you can,” (MarketWatch, September 26, 2016)
How to Cope With 3 Common Retirement Emergencies,” (US News, September 26, 2016)
Mortgage And Refinance Questions That Come Up With Retirement,” (Forbes, September 27, 2016)
How to Invest an Inheritance for a Comfortable Retirement,” (Yahoo, September 27, 2016)
Please Stop My 8% Social Security Raise,” (Wall Street Journal, September 27, 2016)
Retirement, Not Kids, Keeps Two-Thirds of Generation Xers Awake,” (Financial Advisor, September 28, 2016)
Retirement planning: Millennials are starting fast,” (CBS News, September 28, 2016)
No 401k Plan? No Problem, States Offer a New Solution,” (Fox Business, September 28, 2016)
25 Hidden Obstacles That Keep You From Retiring Comfortably,” (MONEY, September 28, 2016)
Millennials Who Do Not Start Saving Soon May Never Catch Up,” (PLANADVISER, September 28, 2016)
More free time could mean risky spending for new retirees,” (USA Today, September 28, 2016)
As you approach 70, tips like these can help trim your RMDs,” (MarketWatch, September 28, 2016)

Wisdom from Some of Our Favorite Blogs:
RetirementRevised: Military prepares for overhaul in retirement benefits |
RetirementRevised: Are reverse mortgages on the comeback trail? |
Squared Away Blog: Annuities Have Real Value |
Behavior Gap: The Probability & Consequences of Complicated Systems |
Nerd’s Eye View: Using IRA Charitable Distributions Vs Donating Stocks |
Behavior Gap: Values-Based Budgeting: Freeing Up Money and Time |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #21 |
Squared Away Blog: Is There a Senior Housing “Crisis”? |
Behavior Gap: Humility Isn’t A Weakness |
Boston ERISA Law Blog: Whitley v. BP, Stock Drops, and the Outer Limits of Fiduciary Responsibility |

Hot Tips from Popular Web Resources:
Morningstar: What Role Does Social Security Play in Readers’ Asset Allocation Decisions? |
NAPA Net: DOL Fiduciary Rule to Trigger Big Asset, Revenue Shifts |
NAPA Net: How Much of the Excessive Fee Settlements Go to Lawyers? |
NAPA Net: The Most Common Hardship Distribution Errors |
The Motley Fool: The Best Age To Take Social Security |
NAPA Net: Can Legislation Boost Retirement Income Prospects? |
NAPA Net: Rescuing Retirement from the ‘Rescuers’ |
NAPA Net: The DOL Fiduciary Rule: 6 Action Steps in Plain English |
NAPA Net: Workers Have the Benefits Blues |
Morningstar: 8 Questions for RMD Season |
NAPA Net: BP Fiduciaries Win Again in Stock Drop Suit |
NAPA Net: Record Keeper Fees Drop 10% |
NAPA Net: Which Generation Has the Most Trust Issues With Advisers? |
Kiplinger: Minimize Sequence Risk in Your Investing Strategy |
NAPA Net: ARA Comments on Savings Plans Established by State Political Subdivisions |
NAPA Net: Don’t Hold Your Breath for the SEC Fiduciary Rule |
NAPA Net: California Joins State-Run Retirement Plan Ranks |
NAPA Net: Regulations, Consolidation, Litigation – Will It Affect Fees/Services Next Year? |
NAPA Net: SEC Offers Some SDBA Guidance on Employer Stock |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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