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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 2/17/17 Trending Topics for ERISA Plan Sponsors: Week Ending 2/17/17
February 21
00:03 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:
The #1 Retirement Saving Goal for People in Their 20s and the Most Useful Strategy to Get There,” (, February 14, 2017) It’s not rocket science, but it’s not easy – either saving in the first place and then investing for the long-term, which means 20-year olds better be as comfortable riding the market as much as they are riding an amusement park roller coaster.

Compliance – Not Looking Good for States:
There’s a growing backlash about the attempted government takeover of the retirement savings industry. Fortunately, things didn’t get as far down the road as “If you like your doctor you can keep your doctor”-care, so this one can be nipped in the bud. Still, this should be a warning to you all.
Blowback: More government may not be the answer to boosting retirement savings,” (Los Angeles Times, February 14, 2017) Here’s the basic idea: Why would you give your retirement money to an institution that has now been exempted from undertaking the protections available to all other retirement savers when they have a history of mismanaging retirement funds?
State-run retirement plan safe harbors facing existential threat,” (BenefitsPRO, February 16, 2017) The Senate needs to answer the call to protect private retirement savers and hold states to the same ERISA standards private employers are held to.

Fiduciary – Angels on a Pinhead:
If we’re not there yet we’re getting awful close. It’s time to stop butting heads against the brick wall, fall back, and regroup. Victory is closer than you think.
Labor Department to Delay, Revisit Fiduciary Rule,” (Wealth Management, February 10, 2017) Unlike the immigration EO, it’s the “slow and steady wins the race” pace for the Fiduciary Rule.
DOL Fiduciary Rule delay seeks to outflank Trump’s opponents,” (Financial Planning, February 10, 2017) Apparently they’re trying to figure out if all these retirement plan-related fees should go to the final industry or the trial attorneys. (/sarcasm) In truth, they may delay the Rule but they can’t delay the ongoing movement towards fiduciary within the marketplace.
The fiduciary rule’s real shortcoming that Trump should fix,” (Financial Planning, February 13, 2017) Here’s a good laundry list of outside-the-box thinking (don’t be fooled by the apparently naïve beginning that says the DOL’s Fiduciary Rule doesn’t go far enough because it doesn’t cover taxable accounts – we all know that’s outside the DOL’s jurisdiction).
The Truth About Fiduciary Duty Delegation,” (ThinkAdvisor, February 13, 2017) This is more about it from the service provider end than the plan sponsor end of things.
Harold Evensky: How Trump Could Weaken the Fiduciary Standard,” (ThinkAdvisor, February 14, 2017) While the market is heading inevitably towards fiduciary, the fear is that a new DOL will change the “best interests” in the current Rule to “caveat emptor.”
A deeper look at Trump’s mandate to reconsider the fiduciary rule,” (Employee Benefit News, February 15, 2017) A review of what’s likely and other possible scenarios.

Fees – So Close, Yet So Far:
Speaking of butting heads against brick walls, when are we going to focus the fee discussion solely on conflict-of-interest fees?
Hidden 401k fees can destroy your retirement dreams,” (CNBC, February 14, 2017) Here’s a very decent mass media article that doesn’t introduce hyperbole to explain its point. It correctly faults the 2012 DOL Mutual Fund Fee Disclosure Rule as being a worthless failure (since it’s so hard to find where the fees are disclosed). It also points to the unfortunately reality that a recent survey reveals 67% of 401k participants think they’re plan is free. What the article fails to do is to place the onus on the plan sponsor to address this.
Why fiduciaries should be haggling more over 401k plan fees,” (Employee Benefit Adviser, February 15, 2017) Not sure “haggle” is the right word. It implies more than might be possible. It’s better to say “price shop.”

Investments – m’K:
So there’s this thing about common sense and theory. When given the choice, always go with common sense. Theory might work all fine and good on the chalkboard, but in the real world, common sense takes the cake.
A Super Bowl Teachable Moment for 401k Participants,” (The 401(k) Specialist, February 13, 2017) This is a “winning by not losing” story. Even though it uses a strained analogy that “Matt Ryan had better career numbers than Tom Brady,” the lesson for the market is well taken.
Here’s 1 reason investors do irrational things that sabotage their portfolios,” (MarketWatch, February 13, 2017) Except of course, if the irrational things is precisely what the rational person would do. Case in point, and contrary to the article, is when your risk tolerance (the “rational” thing) points you towards an investment strategy that causes you to fail to meet your objective (an “irrational” thing).

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.
Six Percent Deferral Rate Welcomed,” (PLANADVISER, November/December 2016)
Shrinking worker pool pressures retirement programs,” (BenefitsPRO, February 11, 2017)
How to avoid a DOL 401k audit,” (Employee Benefit News, February 13. 2017)
Shrinking worker pool pressures retirement programs,” (BenefitsPRO, February 13, 2017)
Is ‘Mandatory Illiquidity’ Needed for 401k Saving Success?” (The 401(k) Specialist, February 13, 2017)
Employers adding financial well-being tools for preretirees,” (BenefitsPRO, February 13, 2017)
How employees can track down old accounts,” (Employee Benefit News, February 14, 2017)
Parties Agree to Settlement in New York Life Self-Dealing Suit,” (PLANADVISER, February 16, 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.
Don’t work? There’s still a way to save in a Roth IRA,” (Cincinnati Enquirer, February 9, 2017)
Charity Can Count Toward Your IRA Withdrawal,” (Wall Street Journal, February 9, 2017)
Divorcees Floundering on Retirement Finances: Survey,” (ThinkAdvisor, February 10, 2017)
Phased Retirement: The Next Big Trend,” (US News, February 10, 2017)
A health savings account could power your retirement,” (MarketWatch, February 11, 2017)
How to track down an old retirement account,” (Los Angeles Times, February 11, 2017)
Are Your Retirement Savings Crash-Proof?” (Fox Business, February 13, 2017)
Why Roth 401k plans Are a Great Deal for Millennials,” (U.S. News, February 13, 2017)
Millennials ruining parents’ retirement,” (BenefitsPRO, February 14, 2017)
The Side Gig Tax Time Retirement Play,” (Forbes, February 14, 2017)
Save for retirement and get a tax break too,” (Bankrate, February 14, 2017)
You have 2 choices: Reduce spending now or scale back retirement lifestyle,” (USA Today, February 14, 2017)
More Americans Are Retiring Abroad—But Do They Have a Plan?” (Financial Advisor, February 15, 2017)
Americans Think Beyond Finances To Prepare for Retirement,” (Financial Advisor, February 15, 2017)
Millennials & saving: Getting 20-year old horses to drink the water,” (BenefitsPRO, February 15, 2017)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: 3 Ways to Get Your Automatic Enrollment Plan Out of its Rut |
ERISA Lawyer Blog: First Circuit Rules That An Issue of ERISA Preemption Should Be Decided By An Arbitrator | Are You Kidding Me? Forfeiture Rule Changes |
Proskauer’s: Update on the USDOL Conflict of Interest Rule and Related Exemptions |
Nerd’s Eye View: The Real Reason Big Savers Retire Early |
Behavior Gap: Question Your Needs, Explore Your Wants |
The Rosenbaum Law Firm P.C. Blog: The Problem With Loans |
The Rosenbaum Law Firm P.C. Blog: Education is an important part of the fiduciary process |
The Rosenbaum Law Firm P.C. Blog: As a plan provider, make sure there are security processes in place |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #36 |
Nerd’s Eye View: Why You CAN’T Be A Fiduciary With A Series 7 License |
RetirementRevised: States’ rights? Not so much, when it comes to retirement savings |
The 401k Plan Blog: Move to Block State Run Plans – I can hear the cheers from Industry already! |

Hot Tips from Popular Web Resources:
The Motley Fool: 4 Facts About Annuities Every Baby Boomer Should Know |
Kiplinger: Why Your Credit Score Matters in Retirement |
NAPA Net: Blackstone Picks Up Recordkeeper |
NAPA Net: Are You Talking Tax Reform? |
NAPA Net: Immediate Annuities – Who Wants Them? |
Morningstar: Savings, Not Returns, Key to Secure Retirement |
NAPA Net: Warren Probes Puzder on Fiduciary Regulation |
NAPA Net: 6 Assumptions That Can Wreck a Retirement |
NAPA Net: Driving Financial Wellness Innovation |
NAPA Net: Private Sector MEPs Return in House Bill |
Kiplinger: A Creative Way to Fund a Business: Your 401k |
NAPA Net: Do Reenrollments ‘Stick’ With It? |
NAPA Net: What’s a Super Session? |
NAPA Net: Case of the Week: Time for Managing a Plan Merger |
NAPA Net: How Did 401k Participants Respond to January Markets? |
NAPA Net: Labor Secretary Nominee Puzder Withdraws |
NAPA Net: House Passes Resolutions to Block State-Run Plans for Private Sector |
NAPA Net: Provider Settles Proprietary Fund Default Suit | Employers Beware, NLRB Shows Grit in Protecting Walkouts and Informal Strikes by Non-union Workers |
NAPA Net: Acosta Nominated as Secretary of Labor |
NAPA Net: Reader Poll: Who’s Talking Tax Reform? |
NAPA Net: DOL Asks for Stay in Another Fiduciary Case |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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