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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 11/25/16 Trending Topics for ERISA Plan Sponsors: Week Ending 11/25/16
November 28
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:
Retirement Readiness: Are We Using the Right Metric?” (, November 22, 2016) “It’s very possible, if not very likely, the vast bulk of retirees want to simple relax. Chances are they’re more ready than others think, and just as ready as they want to be. Maybe that’s the metric every fiduciary should be focusing on.”

Compliance – The Worth of Free Thinking:
You know what they say about “free” – you get what you pay for. Expect to see and hear many out-of-this world (yet mostly stale) proposals in the coming months. That’s the great thing about America – you’re free to say whatever you want (unless it’s politically incorrect – but that may be changing). What might also be changing is the insufferable reliance on musty bromides that have no history of “getting it right” – itself a musty bromide as we will see in the last story in this section.
DIVIDED AMERICA: Easy retirement? Only for a privileged few,” (Associated Press, November 17, 2016) Is it elitist to assume there is only one flavor of retirement and it involves a lifestyle only the affluent aspire to? This article represents yet another unfortunately example of the disconnect between the media and mains street.
How myRA is helping employees save for retirement,” (Employee Benefit News, November 20, 2016) Yeeeaaaaah, no.
New IRS Document Request Process to Affect Employee Plan Examinations,” (PLANADVISER, November 22, 2016) Said in your best Penguins of Madagascar voice: “Read it and weep, boys. Read it and weep.”
Will government relief alleviate lost participant fiduciary challenge?” (Employee Benefit News, November 22, 2016) This is in the best interests of both plan participants and plan sponsors.
The most amazing 401k participant conversation ever,” (BenefitsPRO, November 23, 2016) Believe it or not, there are times when Social Security is all you need for a comfortable retirement.
9 retirement moves other countries get right,” (BenefitsPRO, November 25, 2016) Or not. You have to suspect any list that includes pensions as “getting it right.”

Fiduciary – Grasping for Straws:
Seems like the anti-Fiduciary Rule folks might be channeling their inner Jill Stein. Unlike the failed footnote of the 2016 presidential race, those opposed to the DOL’s Fiduciary Rule may trip into an accidental success, despite their rhetorical ineptitude. That is, of course, unless Jill Stein becomes a much larger historical footnote than she is right now.
There’s No Getting Out Of Fiduciary Duties,” (Wealth Management, November 22, 2016) The articles confirms what readers of this page have already seen here. The cat is out of the bag. There is no putting the genie back in the bottle. Once one tastes the sweet comfort of fiduciary, there is no going back.
Does The Fiduciary Rule Violate Free Speech?” (Financial Advisor, November 23, 2016) Hmm, if that’s true then everyone should be able to call themselves a doctor,… or a lawyer,… or an Indian Chief.

Fees – Redefining the Goalposts:
Decades ago, servicers providers looked at the fee model of Registered Investment Advisers (i.e., a percentage of assets under management) and said, “Why can’t we do that?” And so they did. Only now, they’re discovering why they shouldn’t have. Oh well, better late than never.
Reversal on IRA-commission stance unlikely for Merrill if DOL fiduciary rule repealed,” (InvestmentNews, November 21, 2016) Perhaps once you see the light there’s no going back.
DC Plan Fees: Is the Bottom in Sight?” (Wealth Management, November 23, 2016) In a race to the bottom, nobody wins.
Flat Fees: Not as New as You Think,” (ThinkAdvisor, November 23, 2016) Bob Clark defends his notion that asset-based fees are more attractive to clients because they like the idea their adviser’s pay will go down if the value of their portfolio goes down.

Investments – Good Investing, Bad Investing:
It seems like for every useful investing article published, there’s at least one that sets us back. Here’s something to think about: Will the average reader be able to tell which is which?
Retirement: Lock in lifetime income,” (Chicago Tribune, November 16, 2016) Don’t let the headline scare you. This article explains why you might be better off taking that lump sum instead of buying an annuity.
A Sober Look at Index Funds,” (ThinkAdvisor, November 21, 2016) Could all this enthusiasm for index funds lead to a bubble? If so, it won’t be the first time.
Socially responsible investing ratings can boost a company’s 401k value,” (Employee Benefit News, November 21, 2106) Or it could increase a plan sponsor’s fiduciary liability. After all, is the objective of an employee retirement plan financial or political?
Annuity illustrations aren’t always what they seem,” (CNBC, November 21, 2016) Hidden fees, misleading returns, and opportunity costs are among the issues brought up in this article.

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.
After-Death Distributions: What 401k Advisors Need to Know,” (The 401(k) Specialist, November 17, 2016)
Millennials Grasp Importance of Retirement Savings,” (PLANADVISER, November 21, 2016)
Disney Fiduciaries Beat Lawsuit Over Valeant Stock in 401k Plan,” (Bloomberg BNA, November 21, 2016)
4 Steps to Better 401k Participant Outcomes,” (The 401(k) Specialist, November 21, 2016)
Outdated 401k Rules Are Shortchanging Americans,” (Bloomberg, November 21, 2016)
Are Your Clients’ 401k Plans ‘True Up’ Plans?” (ThinkAdvisor, November 21, 2106)
Eligibility and Vesting Policies Curtail Savings,” (PLANADVISER, November 22, 2016)
401k plan designs hurt employees’ ability to save,” (InvestmentNews, November 22, 2016)
More firms freezing, closing DB plans,” (Employee Benefit News, November 22, 2016)
PBGC Issues New Table for Determining Expected Retirement Ages,” (PLANADVISER. November 23, 2016)
Younger workers want upgraded retirement plans,” (BenefitsPRO, November 23, 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.
26 Tips for Enjoying Retirement on a Reduced Income,” (US News, November 17, 2016)
Why You Should Max Out Your HSA Before Your 401k,” (Forbes, November 17, 2016)
Slow and Steady Wins the Savings Race,” (PLANADVISER, November 18, 2016)
Retired? You Still Need an Emergency Fund,” (Fox Business, November 18, 2016)
How to Prepare for a Roth Recharacterization,” (US News, November 21, 2016)
Social Security cost-of-living adjustment increase of 0.3 percent: how to cope,” (CBS News, November 21, 2016)
Census Bureau providing faulty info on plan participation rates: EBRI,” (BenefitsPRO, November 22, 2016)
How couples are sabotaging their retirement,” (MarketWatch, November 22, 2016)
Work To Retirement Not As Often A Sudden Leap, Economist Says,” (Financial Advisor, November 22, 2016)
Simple quiz can predict early retirement,” (BenefitsPRO, November 22, 2016)
Retirees are working in more hipster fields thanks to the gig economy,” (MarketWatch, November 23, 2016)

Wisdom from Some of Our Favorite Blogs:
Pension Risk Matters: Simplifying Retirement Planning Communications |
The Rosenbaum Law Firm: Glaring Problems A Plan Sponsor May Not Be Aware Of When They Think Everything is OK |
Nerd’s Eye View: Empathy: The Essential Skill To Survive The Robo-Planner Threat |
Business of Benefits: The IRS Tightens Plan Examination Process With New Rules for Plan Sponsors and IRS Examiners |
fi360: PRI Policy Brief Re: Updated Impact Analysis of November Elections on DOL Fiduciary Rule |
Behavior Gap: Stop Pretending to Be an Investor |
Data “Points”: A ‘Retirement Ready’ Thanksgiving List |
The Rosenbaum Law Firm: Coverage is always the biggest problem |
The Rosenbaum Law Firm: Face facts: Retirement Plan Sponsors Only Seek Help When They Need It |
The Rosenbaum Law Firm: Rollovers are going to be a rough business |
The Rosenbaum Law Firm: The TPA Asset Based Fee is a dinosaur |
The Rosenbaum Law Firm: Things That Won’t Help A Retirement Plan Sponsor Limit Their Liability | Ary Rosenbaum |

Hot Tips from Popular Web Resources:
NAPA Net: What’s Going to Happen With the Fiduciary Rule? |
NAPA Net: Another Day in Court for Fiduciary Rule |
NAPA Net: Disney Ducks 401k Class Action on Fund Choice |
NAPA Net: EBRI Says CPS Retirement Data is a Turkey |
NAPA Net: A ‘Retirement Ready’ Thanksgiving List |
NAPA Net: DOL to Explore Lifetime Income Expansion for QDIAs |
NAPA Net: Fiduciary Rule Already Fanning Fund Changes |
NAPA Net: Millennials Mull More Retirement Mandates |
NAPA Net: Another Sequoia Fund Holding Suit Filed |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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