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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 11/18/16 Trending Topics for ERISA Plan Sponsors: Week Ending 11/18/16
November 21
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:
Exclusive Interview with Tara Falcone: How to Talk Financial to Millennials,” (, November 15, 2016) “Millennials seek instant gratification. Putting money away today to live off of forty years from now isn’t nearly as sexy as a trip to Thailand with your girlfriends or tickets to the World Series. I’m not saying there’s anything wrong with that, but you’ve got to strike a balance between today and tomorrow.”

Compliance – The Wheels Start Turning:
Welcome to the new world, where Reality TV meets Washington regulators.
We Have a Retirement Savings Problem. Politicians Can Help.,” (The New York Times, November 11, 2016) Too many solutions focus on getting the horse back into the barn. How about concentrating on keeping the horse in the barn in the first place?
4 Ways Retirement Could Change Under Trump,” (ThinkAdvisor, November 14, 2016) This is a fun parlor game (as it is with any new administration), but the truth is we simply don’t know. At least not until some of the pieces (i.e., personnel decisions) start falling into place.
Legislation, DOL rule could boost multiple employer plans,” (InvestmentNews, November 14, 2016) Once plan sponsors realize that 401k MEPs: 1) Reduce their personal fiduciary liability; 2) Remove non-productive costs associated with running the plan in-house; and, 3) free up precious time that can be devoted towards making more profitable widgets; there will be a rush to the door.
Retirement Policy Proposals Already in Place for Trump Administration,” (PLANADVISER, November 15, 2016) For what it’s worth (if anything), here’s what’s currently on the table in terms of legislation.
The other DOL retirement regulation Trump and the GOP may scuttle,” (InvestmentNews, November 16, 2016) This would be the state-run private employee retirement plans.
Longevity Risk Threatens Pension Funding,” (PLANADVISER, November 16, 2016) Is it the “Ponzi” or the “Scheme” that you don’t understand?
Divided America: Easy retirement? Only for a privileged few,” (AP, November 17, 2106) This is so pre-election. We used to see a lot of articles like. Today, not so many. This is likely because the anecdotes offered by pieces like this are missing too many pieces of the puzzle. The biggest takeaway: Some states are simply unfriendly to retirees because they are too expensive to live in. That means you can’t save much when you’re working and you need too much if you want to continue living there once you’re retired.
Pension battle pushes precedent in distressed California town,” (BenefitsPRO, November 17, 2016) This is what happens in a Ponzi Scheme.
Is it time to make retirement savings mandatory?” (Employee Benefit News, November 17, 2016) What ever happened free will?
Will government relief alleviate lost participant fiduciary challenge?” (Employee Benefit Adviser, November 18, 2016) This is why plan sponsors should want departing employees should take their money with them.

Fiduciary – The End is Nigh:
In this most unpredictable of years, everyone is trying to guess the next unpredictable event.
DOL lawsuits will progress for now,” (BenefitsPRO, November 11, 2106) No reason to let up now.
How Trump, New Labor Chief Could Kill DOL Fiduciary Rule,” (ThinkAdvisor, November 13, 2016) There are any number of ways for the DOL’s Fiduciary Rule to die, and there’s a growing consensus that, one way or another, this particular Fiduciary Rule will never come to pass.
Son Breached his Fiduciary Duty and Fraudulently Transferred Property,” (Wealth Management, November 15, 2106) Interesting perspective from a different application.
How President Trump will roll back fiduciary rule,” (Financial Planning, November 16, 2016) Here’s a little bit more detail on “How I Would Do It If I Did It.”

Fees – Zeroing in On the Target:
Ad infinitum, ad nauseum, the warnings have been issued. Yet, some have chosen not to listen. Now the price is being paid.
Financial Services Explained, Pt. 2: Conflicts of Interest,” (ThinkAdvisor, November 10, 2016) Bob Clark explains which fees are, and which fees are not, conflicts-of-interest.
Edward Jones hit with second lawsuit over excessive 401k fees,” (InvestmentNews, November 15, 2016) This is due to a fiduciary breach in their capacity as a plan sponsor, not as a service provider.

Investments – Zagging Zigs:
This is why market timing is doomed to fail.
Why I’m not changing my portfolio after the election,” (MarketWatch, November 14, 2016) Why? If you’re a retirement saver you’re buying mutual funds or otherwise hiring a professional portfolio manager to take care of things. No reason to change just because there’s an election, that’s up to the portfolio manager. And if you’re that portfolio manager, any moves right now would have to be based solely on speculation. And that’s not a good way to invest.
Day-after-election 401k trading hit all-time highs,” (BenefitsPRO, November 14, 2016) Meme of the month: “They said if I voted for Trump I wouldn’t believe the reaction of the markets.”
5 reasons why retirees should avoid structured CDs,” (MarketWatch, November 15, 2016) You only need to have one: Never buy low-interest CDs when rates are expected to rise.
Stock-Picking Professionals Beat the Indexers,” (Wealth Management, November 17, 2016) Say it ain’t so, Joe! It turns out there really is something to what portfolio managers do – if they aren’t merely trying to impersonate the indexes. The authors of the academic study profiled in this article hedge their bets a little bit, though, saying fees might eat into that precious alpha.

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.
Financial Engines and Xerox Questioned in ERISA Suit,” (PLANADVISER, November 11, 2016)
Retirement plans see higher gains,” (Employee Benefit News, November 13, 2016)
Recordkeeper Not Liable for 401k’s Failure to Provide Financial Audit,” (PLANADVISER, November 14, 2016)
October Was A Difficult Month for DC Investors,” (PLANADVISER, November 14, 2016)
TPA Pays for 401k Participant Doc Dodge,” (The 401(k) Specialist, November 15, 2016)
Second Suit Targets Edward Jones Over Self-Dealing Claims,” (PLANADVISER, November 15, 2016)
10 things plan sponsors can do to get ready for 2017,” (BenefitsPRO, November 15, 2016)
How technology can help improve retirement outcomes in the digital age,” (Employee Benefit News, November 17, 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.
Gradually converting a traditional IRA to a Roth can boost nest egg,” (InvestmentNews, November 10, 2016)
Don’t let worst-case thinking ruin your 401k tax savings,” (MarketWatch, November 11, 2016)
Dreaded WEP strikes again for Social Security beneficiary,” (USA Today, November 12, 2016)
6 End-of-Year Retirement Planning Tips That Will Save You Money,” (US News, November 14, 2106)
Why Your Retirement Savings May Be a Pipe Dream,” (Fox Business, November 14, 2016)
Think you’re prepared for retirement? Answer these 6 questions,” (The Washington Post, November 14, 2016)
The Illusion Of Retirement,” (Financial Advisor, November 15, 2016)
How Can Retirees Adjust Their Spending For Inflation Without Breaking The Bank?” (Forbes, November 15, 2016)
How to put your RMD to work (and avoid a 50% penalty),” (USA Today, November 15, 2016)
Millennials must strike balance between today and tomorrow,” (BenefitsPRO, November 16, 2016)
10 ways to make the years before retirement count,” (Employee Benefit News, November 16, 2016)
Millennial men, women differ on retirement planning and saving,” (BenefitsPRO, November 17, 2016)
6 big money-costing mistakes people make before retirement,” (Employee Benefit Adviser, November 18, 2016)

Wisdom from Some of Our Favorite Blogs:
The 401(k) Plan Blog: Will he or won’t he… put the Kibosh on the DOL Fiduciary Rule – Trump I mean |
Squared Away Blog: The Needs of Working Folks |
The Rosenbaum Law Firm P.C. Blog: The Fiduciary Rule isn’t the 11th Plague, you can predict that |
The Rosenbaum Law Firm P.C. Blog: Furnish those documents to Plan Participants or Pay Through The Nose |
The Rosenbaum Law Firm P.C. Blog: Forfeitures can be a compliance headache |
The Rosenbaum Law Firm P.C. Blog: My opinion on Payroll Provider TPAs |
Nerd’s Eye View: How President Trump May Reshape Estate Planning |
Behavior Gap: Uncertainty Scares Us, But You Can Do Something About It |
Squared Away Blog: Early Social Security Filers Afraid to Lose |
Proskauer: DOL Prevails In First Challenge to the Conflict of Interest Rule and Related Exemptions |

Hot Tips from Popular Web Resources:
NAPA Net: Is Uncle Sam Encouraging Americans to Retire? |
NAPA Net: What Will Happen with the Fiduciary Rule? |
NAPA Net: Fixed Income Favored in October 401k Trading |
NAPA Net: Tricks AND Treats for Average 401k Balances in October |
The Motley Fool: 3 Reasons It’s Smart to Take Social Security Benefits at 62 |
NAPA Net: Edward Jones Smacked with Second 401k Suit |
NAPA Net: 4 ‘Sure’ Things About Saving for Retirement That Aren’t |
NAPA Net: SEC Chair White to Step Down |
NAPA Net: ERISA Advisory Council Makes Recommendations on Cybersecurity |
Morningstar: Should You Tax-Loss Harvest in Your IRA? | A Recap of Last Week in Washington, from NCPA’s Legislative Director | Retirement Reform Policy |
NAPA Net: Custom TDFs Trending Higher With Advisors |
NAPA Net: Case of the Week: 401k Wrap Plans |
NAPA Net: Does Health Trump Money as Retirement Worry? |
NAPA Net: Savers and Spenders: Do Opposites Attract? |
NAPA Net: Another B/D Drops Commissions |
NAPA Net: Plan Sponsors Asking Newly Minted Fiduciaries: ‘Where’s the Beef?’ |
NAPA Net: The Biggest Barriers to 401k Participant Satisfaction |
NAPA Net: Senate to Vote on Bill to Bolster Retirement Savings |
NAPA Net: What About Rollovers That Aren’t Recommended? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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