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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 2/10/17 Trending Topics for ERISA Plan Sponsors: Week Ending 2/10/17
February 13
00:08 2017

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:
Fiduciary Rule SNAFU: What Happened, What Happens Next, and Does It Really Matter?” (, February 7, 2017) In the final analysis, we may get the best of both worlds, a reduced regulatory compliance burden with a market that imposes the fiduciary standard.

Compliance – Will States Have to Honor ERISA?:
Congress grows a pair and actually begins looking out for retirement savers best interests.
Groups Move to Promote Retirement Data Standardization,” (PLANADVISER, February 3, 2017) Standardization is good and highly needed in retirement plan reporting. We’re just not sure if it should be the industry dictating the shots here or a more objective party.
No 401k? No Problem. States Have You Covered.,” (Governing, February 8, 2017) For those wondering how the other side lives, check this out. All of it. Not just the story highlighted here.
House Republicans take aim at state-run retirement plans,” (BenefitsPRO, February 8, 2017) Whoops! Not so fast Governing magazine. On the other hand, isn’t this like passing ERISA again? Or will the ninth circuit come in and rule States’ rights rule? Maybe that statue of Robert E. Lee will have to be restored to its original place.
IRS Provides Information on Types of Advice Available to Plan Sponsors,” (PLANADVISER, February 8, 2017) And it all comes with no strings attached!
IRS Issues Covered Compensation Tables for 2017,” (PLANADVISER, February 8, 2017) We always encourages savers to save to the max. These tables explain what that max is.

Fiduciary – Push-Me-Pull-Ya:
It’s been a whirlwind weed for The Fiduciary Rule and it doesn’t appear to be slowing down.
From Wall Street To Wisconsin, Brokers Cheer Trump’s Order,” (Financial Advisor, February 3, 2017) Here’s some of the first responses on the day the memorandum was signed.
Fiduciary Rule Deadlines, Wording Left Intact By Trump Memorandum,” (Financial Advisor, February 3, 2017) Basically, this is a “nothing to see here, folks, keep moving along” sort of event. For now, at least.
Trends Toward Fees, Low-Cost Products to Persist Despite DOL Delay,” (Wealth Management, February 3, 2017) Once the market tasted this fruit of delight, it will never go back to the bland servings of the past.
Fiduciary Rule Would Sink Advisors? California Suggests,” (Financial Advisor, February 4, 2017) Well, it more than California that suggests this. It’s the entire country of England. And the entire market of non-conflicted advisers who have been serving this market for years without the need to collect commissions, 12b-1 fees, or revenue sharing.
Despite new review of DOL fiduciary rule, firms are sticking with higher standard of care,” (InvestmentNews, February 6, 2017) There’s this thing called “sunk costs” which tends to influence decision making.
Fiduciary rule will live on, despite Trump’s move to delay it,” (Employee Benefit Adviser, February 6, 2017)
What’s next for the DOL fiduciary rule,” (InvestmentNews, Fiduciary 6, 2017) A sensible rundown of what to expect.
Labor Department will need time to deliver on Trump’s executive order,” (BenefitsPRO, February 6, 2017) Well, at least that’s what everyone is thinking.
What the Biggest BDs Are Saying About Trump’s Fiduciary Order,” (ThinkAdvisor, February 6, 2017) Just in case you’re keeping score.
No turning back the clock on fiduciary,” (Financial Planning, February 7, 2017)
Justice Department seeks stay in DOL fiduciary rule lawsuit,” (InvestmentNews, February 8, 2017) Well, the gambit seemed to work well for the previous administration.
DOL asks judge for timeout in fiduciary lawsuit, cites Trump order,” (Financial Planning, February 8, 2017) Another take on the same story.
DOJ Tells Texas Judge to Postpone Fiduciary Ruling,” (ThinkAdvisor, February 8, 2017) Yet a third story, this one with some interesting detail.
Judge rules against fiduciary foes, puts onus back on Trump,” (On Wall Street, February 8, 2017) Wait a minute! Wait a minute!! Wait a minute!!! OK, so we’re not sure of any legal theory that allows a judge to rule in favor of a side that has effectively withdrawn from the trial, but this judge nailed it. Despite the headline, the judge slammed the industry groups that have misstated what the Fiduciary Rule does.
DOL Wins Fiduciary Rule Case in Texas,” (ThinkAdvisor, February 8, 2017) Same story, different take.
Dallas judge upholds DOL fiduciary rule,” (InvestmentNews, February 8, 2017) This article contains a link to the 81 page ruling where the judge skewers the industry’s arguments point by point.
Fiduciary fail: A difference without a distinction,” (BenefitsPRO, February 8, 2017) Do you know which side of the Fiduciary Rule argument you’re on or do you only think you know which side of the Fiduciary Rule you’re on? Whatever side you think you’re on, this article might cause you to question whether you’ve been arguing on the wrong side.
Bogle: ‘Fiduciary Principle Will Live On’ No Matter What,” (ThinkAdvisor, February 9, 2017) Bogle is correct, the market current is now moving swiftly in the direction of “fiduciary” and it’s going to be tough to reverse direction. He’s also correct when he says the Rule didn’t go far enough (but only because the DOL has no jurisdiction over non-retirement accounts), but that same swift current make that omission be moot.
Fiduciary rule is ‘difficult to kill’,” (Financial Planning, February 9, 2017) Now would be a good time to reference James Dean’s character in Giant (“He’s too big to kill.”).
DOL Files to Delay Fiduciary Rule,” (ThinkAdvisor, February 10, 2017) Honestly, is anyone surprised by this? This is an example of Trump staying one step ahead of the news cycle.

Fees – It’s Alive!:
Dr. Frankenstein could not have created a more vicious monster than “Fee Fear Factor!” As this version of defining deviancy down continues, let us not lose site that value matters, not fees.
Merrill Lynch may ‘adjust timeline’ to comply with fiduciary rule,” (Financial Planning, February 3, 2017) Oddly, the company that was the first to stand with Tom Perez when he announced the Rule last April may now be the first to bail. We’ll see what the marketplace has to say about this.
Trump’s fiduciary rule order unlikely to stop fee shift,” (Financial Planning, February 3, 2017) It’s steady as she goes Mr. Sulu, there’s no turning back this Enterprise. Maybe for Merrill Lynch, though.
401k Fees (Slowly) Resonating With Public,” (The 401(k) Specialist, February 5, 2017) Too bad it’s the plan sponsors who make the critical decisions.

Investments – Focus on TDFs:
On the face of it, TDFs are a good thing. But, then again, so was MPT, until the industry got a hold of it and discovered how to use it to sell products, not investment advice. Are TDFs about to cross over into the same Dark Side?
Investors mix target-date funds and other investments to pursue specific strategies,” (InvestmentNews, February 6, 2017) And so it begins… We take the first steps down the same road of “di-worse-ification” that did in the MPT plan option menu. Those that fail to learn from history are condemned to repeat it.
TDFs’ Underlying Funds May Not Meet Plan Sponsors’ IPS Standards,” (ThinkAdvisor, February 6, 2017) You can always count on increased fiduciary liability when it comes to products.
Target Date Funds: What Lies Beneath?” (The 401(k) Specialist, February 9, 201) What lies beneath them or what lies are beneath them? A lot of talk about being concerned about what’s inside TDFs but not a lot of examples of what the problem might be.

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.
Rethinking Retirement Liability,” (Financial Planning, February 2017)
8 concerns 401k sponsors have about DC plan administration,” (BenefitsPRO, February 3, 2017)
Encourage employees not to raid their 401k,” (Employee Benefit News, February 4, 2017)
One small improvement for 401k plans, one giant leap for retirement readiness,” (BenefitsPRO, February 6, 2017)
One small improvement for 401k plans, one giant leap for retirement readiness,” (BenefitsPRO, February 6, 2017)
TIAA Loan Practices Questioned in Latest ERISA Lawsuit,” (PLANADVISER, February 7, 2017)
What’s the Next Step in 401k Plan Design?” (The 401(k) Specialist, February 7, 2017)
Undergrads expect high salaries, 401k matching,” (BenefitsPRO, February 8, 2017)
Retirement Plan Trends to Watch in 2017,” (Wealth Management, February 8, 2017)
Why 403(b) plan sponsors are in a legal hotseat,” (BenefitsPRO, February 8, 2017)

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.
When is it OK to withdraw or borrow from your retirement savings?” (CBS News, January 31, 2017)
Average 401k Balance Hits A New Record, Fidelity Says,” (Money, February 2, 2017)
3 questions to ask before someone advises you on your 401k,” (BenefitsPRO, February 3, 2017)
Retirement Planning Doesn’t End When You Retire,” (GOBankingRates, February 5, 2017)
Does job-hopping hurt workers’ retirement?” (BenefitsPRO, February 6, 2017)
Don’t Let Trump-Watching Derail Your Retirement Planning,” (Money, February 7, 2017)
5 ways to minimize required minimum distributions,” (MarketWatch, February 7, 2017)
Looking For Tax Savings? Make Sure You Know This 401k Strategy,” (Forbes, February 7, 2017)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: Why You Shouldn’t Hire Your Brother-in-Law as Your Plan’s Advisor |
The Rosenbaum Law Firm P.C. Blog: Trump delays the fiduciary rule, but the broker-dealers lost |
The Rosenbaum Law Firm P.C. Blog: Being a Plan Sponsor is all about the Process |
Squared Away Blog: Wrong People Seek Financial Info, Help |
Proskauer’s ERISA blog: IRS Announces the Last Day of the Remedial Amendment Period for 403(b) Plans |
Behavior Gap: Show Your Value |
Behavior Gap: Carl Has a Problem (You May Share It) |
The Rosenbaum Law Firm P.C. Blog: RIAs win one with Fiduciary Rule Delay |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #35 |
Squared Away Blog: Retiree Benefits: Tale of 2 Cities (States) |
Business of Benefits: ERISA and Mom: Sláinte!! |
RetirementRevised: Fiduciary-ish: Sorting out healthy, unhealthy retirement investing options |
Fi360: Fi360 Declares March 23 National Fiduciary Day |
Fi360 Fiduciary Talk 45: Fiduciary Rule scores victory in Texas |
The Retirement Plan Blog: TIAA Lawsuit Puts the Spotlight on 403(b) Participant Loans |
Ary Rosenbaum: How a 401k Plan Sponsor Minimize Their Liability In 8 Easy Steps |

Hot Tips from Popular Web Resources:
The Motley Fool: Do You Know Who Gets Your Assets When You Die? |
NAPA Net: The Fiduciary Rule: Where Things Stand Now |
NAPA Net: What’s on the Quarterly Meeting Agenda(s)? |
NAPA Net: An ‘Opportunity to Fix’ the DOL Rule |
NAPA Net: Stable Value Suit Strikes Out a Second Time |
The Motley Fool: Buying an Annuity for Retirement Makes Sense — Sometimes |
Kiplinger: Deducting an IRA Contribution on Your Tax Return |
NAPA Net: Participant Suit Says Loan Process Epitomizes Self-Dealing |
NAPA Net: 3 Ways to Get Your Automatic Enrollment Plan Out of its Rut |
NAPA Net: Does Drifting off the Glide Path Help TDF Performance or Hurt it? |
NAPA Net: The Workforce and Financial Wellness: Challenging Dynamics |
The Motley Fool: 4 Smart Retirement Moves You Can Make Today |
Kiplinger: Retiring Today Is 10 Times Riskier Than 10 Years Ago |
NAPA Net: Warren Finds Financial Firms Fiduciary Fit |
NAPA Net: Would a Fiduciary Delay Matter? |
NAPA Net: What is the Definition of Compensation for Determining HCEs? |
Morningstar: Last-Minute IRA Contribution Can Cost You |
The Motley Fool: 4 Tips for Avoiding Capital Gains Tax |
NAPA Net: DOL 3, Fiduciary Rule Opponents 0 |
NAPA Net: House Resolutions Seek to Block State-Run Retirement Safe Harbors |
NAPA Net: The 5 Most Common SEC Compliance Violations |
NAPA Net: ‘Impact’ Investments Expected to Have an Impact |
NAPA Net: DOL Files for Delay in Fiduciary Rule Applicability Date |
NAPA Net: Oregon Treasury Proposal Puts 401k Plans at Risk |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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