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 12/2/16 Trending Topics for ERISA Plan Sponsors: Week Ending 12/2/16
December 05
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:
Do State-Run Retirement Plans Breach Fiduciary Duty?” (, November 29, 2016) Exempting government officials from the same fiduciary standards imposed on private providers places retirement savers at undo risk.

Compliance – Are Millennials the New “Children”?:
It first appeared in the 1964 movie Mary Poppins and has since been both lampooned and adulated. How many times have we heard the plea “Think of the children”? As if the sincerity of intention can overcome the ineptitude of the idea. Do we have a retirement “crisis: or do we have solutions in search of a problem? And are those solutions a “cure” worse than the “disease”? Only her hairdresser knows for sure.
Shock (Not)! Media Hypes Retirement Savings ‘Crisis’,” (The 401(k) Specialist, November 25, 2016) The article references a major academic study that refutes much of the hyperbole we see in other articles.
Mandatory Saving for Retirement Gets a Thumbs Up From Millennials,” (Fortune, November 27, 2016) While we’re also in favor of saving as much as you can as early as you can, there’s something about “mandatory” that just sounds evil. Perhaps that’s why the Good Lord invented “opt-outs” as a kinder, gentler – but ultimately most fair – way to nudge folks to do the right thing.
Is It Simpler Than Obamacare? California’s Retirement Mandate,” (Bloomberg, November 28, 2016) There are just oh so many things wrong with this picture. Foremost, retirement savers are no protected by ERISA. In addition, the state-run plan offers no advantages to existing private retirement savings options and may actually impede the free market, thereby harming retirement savers. Yet, this grand experiment will go forward.
Smackdown 2017: MEP/PEPs vs. state-run private employee retirement plans,” (BenefitsPRO, November 30, 2016) The advantages of a new and improved 401k MEP will

Fiduciary – By Any Other Name:
The Fiduciary Rule may arrive DOA, but its spirit will live forever. Need proof? Just ask your favorite neighborhood class action attorney why he’s licking his chops.
Wells Fargo Self-Dealing Suit Questions Committee Practices,” (PLANADVISER, November 28, 2016) This is the nub of what it means to be a fiduciary – one must not engage in self-dealing transactions. This case may be more obvious since it involves the companies own plan. Yet, what’s the difference between acting as a fiduciary for your own employees’ retirement assets and acting as a fiduciary for a non-employee’s retirement assets? Actually, there is a difference: There may be other fiduciary issues that arise should you not place your own employees’ retirement assets in funds you ask non-employees to invest their retirement savings in.
Don’t Get Burned: Six 401k Fiduciary Items to Closely Watch,” (The 401(k) Specialist, November 28, 2016) Common sense principals from ERISA attorney Ary Rosenbaum.
In DOL/Post-DOL Fiduciary World, RIAs Need to Re-Differentiate,” (ThinkAdvisor, November 29, 2016) Knut Rostad point out three important trends: 1) Brokerage firms have unilaterally declared their reps are fiduciaries; 2) The election of Donald Trump effectively kills the Fiduciary Rule; and, 3) The subsequent regulatory void with cause confusion.
DOL’s Borzi: Rule or No Rule, There’s No Going Back on Fiduciary,” (ThinkAdvisor, December 1, 2016) Phyllis Borzi reminds everyone the genie is out of the bottle and it ain’t goin’ back in. In this article, she explains why market forces will soon take over the fiduciary fight, a phenomenon made possible by the release of the Rule and one that will live on regardless if the Rule is ever implemented.
What Phyllis Borzi has to say about the DOL rule now,” (InvestmentNews, December 1, 2016) Here Borzi explains how, even without being formally implemented, the Fiduciary Rule has produced positive results for retirement savers.

Fees – And This Surprises You Why?:
When it comes to keeping those misplaced incentives flowing, there no better place to look than…
Wells Fargo to keep commissions under fiduciary rule,” (On Wall Street, December 1, 2016) Another firm decides on which side of the line drawn in the sand it chooses to stand. Pass the popcorn. This oughta be good.

Investments – When Will They Ever Learn:
Not every Peter, Paul, and Mary can afford to retire on a rock star’s earnings, but that still doesn’t mean folks should place undue emphasis on investing at the expense of saving.
Why a ‘Bond Tent’ Can Protect a Portfolio in Retirement,” (Wall Street Journal, November 27, 2016) This is the traditional “balanced” portfolio approach, only it’s described in terms of “sequence of return” risk.
Jeremy Siegel – Why Long-term Investors Should Own Stocks: Bonds are ‘Dangerous’,” (Advisor Perspectives, November 28, 2016) And for the counterpoint…
What the retirement gurus didn’t tell you about that ‘balanced’ portfolio,” (MarketWatch, November 30, 2016) This is another one of the “sequence of returns” articles. Again, it’s trying to fit a square peg in a round hole, even though it’s warning you that the square peg isn’t all it’s cracked up to be.
Dueling Data Show Active, Passive Both Have Merits,” (Financial Advisor, December 1, 2016) This makes too much sense.
U.S. Retirement Investors Not Hitting Post-Election Panic Button,” (Wealth Management, December 1, 2016) Maybe there were more things they didn’t panic about…
Should Cash Be King In Retirees’ Portfolios?” (Financial Planning, December 2, 2016) The trends show there’s been a steady build up in cash. There may be a very good reason for this (see the “balanced” article above), but in the past this might have been construed as a very bullish sign.
40% of Americans don’t know how their investments are allocated; here’s help,” (MarketWatch, December 2, 2016) More pabulum for the public. Read this and witness the last crying strains of the dying dinosaur that prays at the altar of “investments first” when a much simpler solution lurks in the steamy jungle of retirement strategies.

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.
How Employers Can Help Solve the Retirement Savings Problem,” (ThinkAdvisor, November 22, 2016)
Are Your Clients’ SPDs Accessible and Readable?” (PLANADVISER, November 23, 2016)
Investment in Sequoia Fund Target of Another Retirement Plan Suit,” (PLANADVISER, November 23, 2016)
Why employers need to reevaluate their DC plans,” (Employee Benefit News, November 27, 2016)
How to help small business clients understand the 401k process,” (Employee Benefit Adviser, November 28, 2016)
More firms freezing, closing DB plans,” (Employee Benefit Adviser, November 28, 2016)
GAO says 401k vesting and participation policies pinch retirement savings,” (BenefitsPRO, November 28, 2016)
Wells Fargo Employees Sue Over Funds In Retirement Plans,” (Financial Advisor, November 28, 2016)
How financial wellness efforts can boost retirement readiness,” (Employee Benefit News, November 29, 2016)
How Health Savings Accounts Can Complement Your 401k Practice,” (The 401(k) Specialist, November 29, 2016)
Save clients from costly RMD aggregation mistakes,” (Financial Planning, November 29, 2016)
What advisors want from retirement plan record-keepers,” (BenefitsPRO, November 29, 2016)
Going beyond a traditional adviser-plan sponsor relationship,” (Employee Benefit Adviser, November 29, 2016)
10 obstacles to retirement readiness,” (BenefitsPRO, November 30, 2016)
How (and why) employers are reinventing DC plans,” (Employee Benefit News, November 30, 2016)
Preventing retirement plan leakage: An infrastructure project that saves trillions,” (BenefitsPRO, November 29, 2016)
Going beyond a traditional adviser-plan sponsor relationship,” (Employee Benefit Adviser, November 30, 2016)
Corporate Pension Plans Seeking New Risk Reduction Measures,” (PLANADVISER, December 1, 2016)
The potential downside of automatic enrollment in 401k plans,” (InvestmentNews, December 1, 2016)
What happens if a retirement plan incurs a data breach,” (Employee Benefit Adviser, December 1, 2016)
Stable Value Fund Suit Sent Back for Amended Complaint,” (PLANADVISER, December 2, 2016)
How to help baby boomers add to their retirement savings,” (Employee Benefit Adviser, December 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.
No Rollover Exception to Funds Withdrawn,” (Wealth Management, November 18, 2016)
Should you save for retirement or your kids, college costs?” (CNBC, November 22, 2016)
So you’ve saved for retirement. Did you think about these 3 things?” (MarketWatch, November 23, 2016)
Whatever Happened to That Old 401k?” (Wall Street Journal, November 27, 2016)
An outside-the-box idea for taking your RMD,” (USA Today, November 28, 2016)
Many current retirees reluctant to tap savings,” (InvestmentNews, November 28, 2016)
5 ways to make the last 10 years before retirement count,” (USA Today, November 28, 2016)
Wells Fargo Employees Sue Over Funds In Retirement Plans,” (Financial Advisor, November 28, 2016)
Will we ever be able to retire? Boomers and Gen X-ers are worried,” (The Washington Post, November 28, 2016)
Should You Protect Your Retirement Accounts? Absolutely,” (Forbes, November 28, 2016)
Roths for tax savings, no matter how much money you make,” (CNBC, November 29, 2016)
New Social Security Rules: How to Maximize Benefits,” (ThinkAdvisors, November 29, 2016)
First Rule of Retirement Income: What It Is, Why It’s Important,” (The 401(k) Specialist, November 29, 2016)
How should near-retirees deploy their net worth?” (CBS News, November 30, 2016)

Wisdom from Some of Our Favorite Blogs:
The Chicago Financial Planner: Annuities: The Wonder Drug for Your Retirement? |
Fred Reish: The Presidential Election: Now What? |
Nerd’s Eye View: Understanding Trump’s 2017 Income Tax Reform Proposals |
Behavior Gap: Ignore the Fiction – Stop Spending Based on Stories |
Business of Benefits: When Is an Organization a “Church” that Sponsors a Retirement Plan? |
Squared Away Blog: Retirees’ Tax Puzzle: Pay Now or Later? |
Proskauer: DOL Prevails Again and NAFA Moves on to the Circuit Court Challenging the Conflict of Interest Rule and Related Exemptions |
RetirementRevised: Retirement investors not hitting post-election panic button |
Scholarly Financial Planner: Are FSI and SIFMA’s, the Broker-Dealer Lobbying Organizations, Trying to “Stick Up For” Small Investors, or “Stick It to Them”? |
Ary Rosenbaum: A “Crystal Ball” On Life After The New ERISA Fiduciary Rule |

Hot Tips from Popular Web Resources:
NAPA Net: D.C. District Court: No Pause on Fiduciary Ruling Pending Appeal |
NAPA Net: Are Investment Menu Suggestions a Fiduciary Act? |
NAPA Net: New IRS Examination Rules Tighten IDR Process |
Kiplinger: FAQs About RMDs for Retirement Accounts | The Retirement Income Portfolio That Grows Year After Year |
NAPA Net: Fiduciary Rule 2, Opponents 0 |
NAPA Net: 5 Things the DOL Wants You to Know About TDFs – That You May Have Overlooked |
NAPA Net: Fiduciaries Charged with TDF Self-Dealing |
NAPA Net: Plan Eligibility, Vesting Focus of GAO Report |
Kiplinger: 7 States That Are Better Than Florida for Retirement |
NAPA Net: Judge Presses for Proof in Stable Value Excessive Fee Suit |
NAPA Net: Clueless About Retirement Needs, Americans Are Nervous |
NAPA Net: Will the DOL Fiduciary Rule Create Permanent Plan Participants? |
Morningstar: The Radical Fix for 401k Plans |
NAPA Net: Trump’s Treasury Pick Touts Tax Reform & Why That Matters |
NAPA Net: Emergency Motion Filed in Fiduciary Litigation |
NAPA Net: DC Advisors Shortening Their ‘Short List’ of DC Providers |
NAPA Net: Significant Shifts Ahead for Asset Allocation |
The Motley Fool: Retiring in 2017? Here Are 5 Tax Moves to Make Now |
NAPA Net: Wells Fargo Weighs in on Commission-Based Retirement Accounts |
NAPA Net: What’s Up With Consistent 401k Balances in November? |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA

1 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.