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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 12/9/16 Trending Topics for ERISA Plan Sponsors: Week Ending 12/9/16
December 12
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:
‘Houston, the Fiduciary Has Landed.’ Where Does ‘Fiduciary’ Go From Here?” (, December 6, 2016) Yes, the DOL exposed the folly of treating tax-deferred vs. taxable accounts differently, but the real issue remains that “advisers” and “advisors” are not held to the same regulatory standard. With or without the current DOL Rule, this is the vital question that needs to be answered.

Compliance – We Approach a Crossroads:
Much like Washington is about to be turned upside down by the new Trump administration, so to may retirement policy. The long swing of the pendulum towards paternalistic dependency appears to have reached its apex. Soon a return to self-reliance, self-dependency, and self-confident will appear on the horizon.
Rollover and Retirement Transitions Must Be Improved,” (PLANADVISER, December 2, 2016) There appears to be a growing understanding that people who leave their employer ought to take their retirement savings with them. While there is concern about the potential “advice void” that may be created, it is generally recognized that the first matter to be addressed is the actual logistics of transferring the money out.
Time for 401k plans to step into the modern age,” (InvestmentNews, December 4, 2016) Times have changed since the 401k plan was simply an ad hoc corporate perk. It now represents the foundation of good retirement planning on the part of the employee. Yet, our regulations governing these plans remain in the Stone Age compared to what employees and employers need today.
Reforms in United Kingdom Offer Guidance for U.S. Policy,” (PLANADVISER, December 5, 2016) As much as encouraging people to save for retirement is an absolutely fantastic idea, it sorta makes us cringe when the government forces you to do so (even if it does have an opt-out provision). Fundamentally, it’s a question of philosophy: Do you want “Big Brother” telling you what to do, or do you prefer the freedom to make your own mistakes (and accept whatever consequences result from that)?
Why State-Based 401k Plans Are a (Really) Bad Thing,” (The 401(k) Specialist, December 6, 2016) The article explains how these boondoggles could become the financial equivalent of ObamaCare.
How to prepare for mandatory payroll deduction savings programs,” (Employee Benefit Adviser, December 8, 2016) On the other hand, here’s how to prepare for the coming state-run retirement plan apocalypse.
Pension Protection Act made retirement security more tenuous,” (Employee Benefit News, December 8, 2016) Or did it merely delay the inevitable?

Fiduciary – The Long Goodbye:
It’s done. There’s no turning back. Those two ambiguous phrases say all that needs to be said about the current state of the Fiduciary Rule.
Rumors of DOL fiduciary rule’s demise greatly exaggerated: panel,” (InvestmentNews, December 7, 2016) Skip Schweiss, Blaine Atkin, and Knut Rostad offer their insights. Worth the read.
2016: The year of the rise and fall of the fiduciary rule,” (BenefitsPRO, December 7, 2016) Yes, it’s dead, but here’s why that death might be a lingering one.
Trump pick for Labor secretary not likely to favor DOL fiduciary rule,” (InvestmentNews, December 8, 2016) Trump nominated Andrew Puzder, CEO of CKE Restaurants Inc., owner of the Hardee’s and Carl’s Jr. burger chains. Although apparently inclined against regulations like the Fiduciary Rule, Puzder will likely focus on job creation, since he has both a passion for and proven expertise in this area. The disposition of the Fiduciary Rule will probably be left to Phyllis Borzi’s replacement as the assistant secretary of the Employee Benefits Security Administration.

Fees – Functional Redundancy:
It’s why two heads are better than one. With two (or even more), there’s always someone to watch the other one.
A Simple Solution to the 401k Fee Lawsuit frenzy?” (The 401(k) Specialist, November 30, 2016) The author suggests divorcing recordkeeping for advice. Unbundling always seems like a smart idea.

Investments – An Evolving Paradigm:
Maybe it’s the Trump Rally talking, but doesn’t it seem more fun to talk about investing again?
Finding Common Ground: Active and Passive Investing,” (Wealth Management, December 1, 2016) It makes some sense to throw in passive funds for areas that would be otherwise too costly to research.
Target-date fund managers evolve to capture burgeoning 401k market,” (InvestmentNews, December 5, 2016) It seems selling the sizzle seems to be really taking off. Pretty soon all funds will be “target date funds” and we’ll be right back to where we starting.
Why Standard Risk Tolerance Questionnaires Are Failing FAs—And What to Use Instead,” (Financial Advisor, December 5, 2016) It looks like more people are starting to agree with what we wrote so many years ago (see “Should 401k Plan Sponsors Ban Risk Tolerance Questionnaires?FiduciaryNews, August 13, 2013).
When it comes to annuities, why words matter,” (MarketWatch, December 6, 2016) Specifically, these words: caveat emptor.
Helping Participants Get the Most out of TDFs,” (PLANADVISER, December 7, 2016) Well, what do you want with all the confusion regarding “to” and “through.”
Am I nuts to put 100% of my retirement savings in stocks?” (CNN, December 7, 2016) It was a pretty good article showing how people have more “bonds” than they think, at least until it turned over decision making to the magic “risk tolerance” genie.

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 to get a lower tax rate on employer stock in your retirement plan,” (MarketWatch, December 2, 2016)
Harsh Comments About Proposed Form 5500 Revisions,” (The 401(k) Specialist, December 5, 2016)
How to keep a record keeper relationship on track,” (Employee Benefit Adviser, December 5, 2016)
The big trends that will reshape retirement in 2017,” (Employee Benefit News, December 6, 2016)
401k Sponsors Seriously Stressed About Getting Sued,” (The 401(k) Specialist, December 6, 2016)
How your 401k plan will change in 2017,” (MarketWatch, December 6, 2016)
How to help baby boomers add to their retirement savings,” (Employee Benefit News, December 6, 2016)
Litigation is top fear of majority of 401k sponsors,” (BenefitsPRO, December 6, 2016)
How to Optimize a 401k Plan for You and Your Employees,” (CFO Magazine, December 6, 2016)
Aggressive Saving Needed to Meet Retirement Health Care Costs,” (PLANADVISER, December 7, 2016)
How to Increase 401k Participation With Financial Wellness,” (The 401(k) Specialist, December 7, 2016)
Groups Say Form 5500 Proposed Updates Too Burdensome,” (PLANADVISER, December 7, 2016)
9 reasons why retirement may go extinct,” (BenefitsPRO, December 7, 2016)
Providers Should Shift From Sole Focus on Baby Boomers,” (PLANADVISER, December 7, 2016)
Overwhelming Majority Failed 401k Financial Education Quiz,” (The 401(k) Specialist, December 8, 2016)
5 surefire ways to boost retirement enrollment,” (Employee Benefit News, December 8, 2016)
Many Not Addressing Extreme Fear of Retirement Health Costs,” (PLANADVISER, December 8, 2016)
Participants Not Up to Speed on 401k Features,” (PLANADVISER, December 8, 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.
Ask Larry: ​I’m 68. Can I Still Raise My Retirement Benefit?” (Forbes, December 1, 2016)
Should Your Employer Go Full Robo on Your Retirement Savings?” (Bloomberg, December 1, 2016)
The Ages When Most People Retire (Hint: Probably Too Young),” (MONEY, December 1, 2016)
Millennials Predict a ‘Retirement Inversion’,” (PLANADVISER, December 1, 2016)
Kitces: Avoid the retirement danger zone,” (Financial Planning, December 2, 2016)
Retirement? Fat Chance, Say Millennials,” (MONEY, December 2, 2016)
Cramer highlights the magic of compounding — how to double your money in 7 years,” (CNBC, December 2, 2016)
‘Church Plan’” Cases to Be Heard by Supreme Court,” (PLANADVISER, December 5, 2016)
ERISA Stock Drop Suit Filed Against Exxon Mobil,” (PLANADVISER, December 5, 2016)
Thinking of Downsizing? Here Are the Questions to Consider,” (Wall Street Journal, December 6, 2016)
Got A Raise? Invest It In Your 401k,” (Forbes, December 6, 2016)
Kitces: Maximize the IRA stretch,” (Financial Planning, December 7, 2016)
Get ready to retire at 50, not because you want to but because you’ll have to,” (CNBC, December 7, 2016)
A very simple ‘Minimum Benefit’ idea for Social Security,” (MarketWatch, December 7, 2016)
Mandatory IRA Distributions: Avoid These 3 Common Mistakes,” (Forbes, December 7, 2016)
Year-end required minimum distribution planning alert for first-timers,” (InvestmentNews, December 8, 2016)|
3 ways to help employees with retirement planning,” (BenefitsPRO, December 8, 2016) |

Wisdom from Some of Our Favorite Blogs:
The 401(k) Plan Blog: Is the Time at Hand for ‘Open MEPs’ |
Proskauer: DOL Prevails in Kansas Litigation Challenging Conflict of Interest Rule and Related Exemptions |
Nerd’s Eye View: 2016 Year-End Tax Strategies For Potential 2017 Tax Reform |
Behavior Gap: When Entrepreneurs Go All, Diversification Doesn’t Fit |
Squared Away Blog: Inside the Minds of Older Workers |
RetirementRevised: How part-time work hurts retirement security for millennials, minorities |
Business of Benefits: The Fiduciary Underpinnings of Plan Loans |
four01k: What is the ideal 401k Deferral %? |
Ary Rosenbaum: Why A Plan Sponsor Should Get A Plan Review |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #29 |

Hot Tips from Popular Web Resources:
Morningstar: Company Stock in Your 401k: Yes, It’s Still a Bad Idea | What Happened in Washington Last Week? |
NAPA Net: Form 5500 Modernization Misses the Mark |
NAPA Net: HSA Investment Accounts Continue to Expand |
NAPA Net: Legislation Would Amend Section 401 Nondiscrimination Rules |
The Motley Fool: Social Security: 1 Terrible Reason to File for Benefits at 67 |
NAPA Net: A Different Kind of Leakage |
NAPA Net: Things That the ‘Common Wisdom’ About Millennials Gets Wrong |
NAPA Net: What’s Required for Loans and Hardships? Good Question. |
NAPA Net: Retirement Plan More Prized by Millennials |
Kiplinger: Retirees, Shift Stock to Satisfy Your RMD |
NAPA Net: Financial Engines a Litigation Target? |
NAPA Net: Trump Has Opinion on Fiduciary Rule – But… | Let’s Scrap Pension Systems Altogether |
NAPA Net: Case of the Week: ESOP Tax-Advantaged 1042 Exchange |
NAPA Net: Trone: Prepare for the DOL Fiduciary Rule by Thinking BIG |
Kiplinger: How to Save If You Do Not Have a 401k |
The Motley Fool: Turning 62 in 2017? Here’s What You Need to Know |
NAPA Net: Plaintiffs Charge Stock Price Pumped Up in New 401k Suit |
NAPA Net: DOL Rule Could Disrupt Bundled DC Pricing and DCIO Wholesaling |
NAPA Net: Where Financial Plans Fall Short |
Kiplinger: 6 Steps To Help Make Sure You Don’t Outlive Your Money |
NAPA Net: Would Puzder Punt Fiduciary Regulation? |
NAPA Net: Why Retirement Costs More for Women |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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