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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 2/3/17 Trending Topics for ERISA Plan Sponsors: Week Ending 2/3/17
February 06
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:
10 Reasons Why It’s Better to Rollover Your 401k into an IRA,” (, January 31, 2017) There are any number of reasons to get your money out of an old employer’s 401k plan. Here are 10 of them.

Compliance – Has the Tide Turned?:
It looks like that ol’ outside-the-box thinking has already started. Time for some popcorn. This is going to get good.
Hogan proposes 401k-style retirement savings plan for Md. state employees,” (The Washington Post, January 30, 2017) As other states ignore their own problems and try to bring those problems to private employees, the Maryland Governor makes a move long expected from retirement experts. It’s become obvious public pension plans are unsustainable and rife with corruption. Replacing them with a defined contribution plan makes sense, but it will face stiff partisan opposition from groups with a vested interest in taking advantage of the current public employee retirement system.
The IRA rollover conundrum,” (BenefitsPRO, Feburary 1, 2017) While noble in intent, did the DOL’s Fiduciary Rule fail by not more clearly distinguishing between material conflicts-of-interest and non-material “conflicts-of-interest”?

Fiduciary – The New New Journalism Sure is Different from the Old New Journalism:
It’s one thing to report live and make mistakes when it involves a natural disaster, but it’s another thing to make major mistakes when reporting on presidential actions. Follow this thread of articles and discover how easy it is for “fake” news to appear out of nowhere, even if it comes for “reliable” souces.
Brokers’ Ire on Fiduciary Rule Obscures True Threat,” (Wealth Management, February 2, 2017) Close, but not quite there. It’s true that brokers are in many ways the buggy whip manufacturers of the 21st century, but only as it pertains to their “advice” model. The traditional brokerage model, thought squeezed to smaller commissions over the decades, remains not only intact, but essential for the smooth running of our capital markets.
Trump to halt fiduciary rule,” (Financial Planning, February 3, 2017) If you want to see an example of “fake” news, follow the headlines in the next few articles.
Trump to halt DOL fiduciary rule, order review of Dodd-Frank,” (BenefitsPRO, February 3, 2017) Turns out they were only half right.
Trump to halt Obama fiduciary rule,” (Employee Benefit Adviser, February 3, 2017) Hmm, are we detecting a trend here? It’s tough say which got played more, Trump’s “halt” of the Fiduciary Rule or his “Ban” on Muslims.
Trump Tells DOL to Halt Fiduciary Rule; Dodd-Frank Targeted,” (ThinkAdvisor, February 3, 2017) We know “halt” contains only four letters and that makes it a perfect headline word, but it does a disservice to the reporter of this article who actually does a good job saying what’s really happening.
Trump To Halt DOL Rule And Order Review Of Dodd-Frank,” (Financial Advisor, February 3, 2017) While technically a “delay” and not a “halt,” it may in the end have the same effect.
Fiduciary rule delay prompts snark, cheers and outrage on Twitter,” (Financial Planning, February 3, 2017) Go ahead and read for your enjoyment.
Fiduciary rule delay ‘a little too late’ for retirement planning industry to change course,” (Employee Benefit News, February 3, 2017) It’s tough to stop a boulder when it’s rolling down the hill.
DOL fiduciary rule delayed 180 days by Trump directive,” (InvestmentNews, February 3, 2017) Oops. Maybe they should have read the fine print first.
Details Emerge on Trump Order to ‘Review’ Fiduciary Rule,” (ThinkAdvisor, February 3, 2017) Upon further review…
DOL Rule Still Alive Despite Trump Order, Says TD Exec,” (Financial Advisor, February 3, 2017) Skip Schweiss correctly points out Trump’s order merely grants the authorization to the DOL to delay the implementation of the Rule. It doesn’t formally eliminate it.
Fiduciary rule delayed, stakeholders react,” (BenefitsPRO, February 3, 2017) Reflections before the dust settled.
Final Trump memo lacks explicit directive to delay DOL fiduciary rule,” (InvestmentNews, February 3, 2017) How could so many have gotten it so wrong?

Fees – What Ever Happened to Value?:
When the DOL first started talking about its 2012 Fee Disclosure Rule, they were concerned about “the race to the bottom.” To prevent this, they made a point to say it’s how low the fee is that matters, it’s how much value you get from the fee.
Do your fiduciaries negotiate for lower 401k plan fees?” (Employee Benefit News, January 27, 2017) How far does a fiduciary need to go when negotiating fees? This article offers some guidance based on recent court cases.
Pulling the curtain back on those 401k fees,” (Cincinnati Enquirer, January 30, 2017) Here’s a fun exercise. Take a gander at this article from The Queen City of Ohio’s McPaper and judge how accurate and enlightening it is. Oh, in case the authors ever actually want the answer, it 1% for private portfolio (i.e., stocks and bonds, not mutual funds) management. (The original question had nothing to do with 401k plan fees.)
Trump’s fiduciary rule order unlikely to stop fee shift,” (Financial Planning, February 3, 2017) It’s that darn rock again.

Investments – And By That We Mean Saving:
Sorry, but after all the excitement about fiduciary, there’s nothing that really excites here.
Institutional Investors Must Dial Back Return Expectations,” (PLANADVISER, January 30, 2017) We see this pop up every so often. Call it the legacy of the “Lost Decade” – the first ten years of this new millennium when the S&P 500 went nowhere.
8 Tips for Investing in Your 30s,” (US News, January 31, 2017) The headline says “investing” but the article says “saving.” Keep in mind this is a mass media article, so retirement savers will be reading it for investing tips (as the headline promises) and find nothing but oft-repeated bromides like “start early.” How do you think they’ll feel once they see what’s in the article, even if it is sound advice. Tricking your audience is no way to have your message be heard and your call to action heeded.
Steer clear of these taboo IRA investments,” (Financial Planning, February 1, 2017) Here’s another clear case of a bad headline. This article is a great article about the dangers of prohibited transactions. Sure, you can kinda call these things “investments” – technically, that’s what they are – but the spirit of the infraction has less to due with the viability of the investment as an investment and more with the conflicted interest the IRA holder has with that investment. In other words, it may be sound investment, it’s just not one the government allows you to make.

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.
What’s Happening With Multiple Employer Plans?” (The 401(k) Specialist, January 28, 2017)
5 Things To Discuss With Your Clients As They Embark On Retirement,” (Financial Advisor, January 30, 2017)
Edward Jones’ Self-Dealing Suit Permitted to Proceed,” (PLANADVISER, January 30, 2017)
401k-to-IRA Rollovers Show Little Sign of Slowing,” (The 401(k) Specialist, January 30, 2017)
5 Things To Discuss With Your Clients As They Embark On Retirement,” (Financial Advisor, January 30, 2017)
Kickback Lawsuit Calls Out Aon Hewitt Agreement With Financial Engines,” (PLANADVISER, January 31, 2017)
Aon Hewitt sued for 401k ‘kickback’ scheme with Financial Engines,” (InvestmentNews, January 31, 2017)
3 Reasons Peter Drucker Could Have Run Your 401k,” (ThinkAdvisor, January 31, 2017)
PBGC Final Rule Increases Certain Penalties,” (PLANADVISER, February 1, 2017)
Average 401k Balance Tops $92K, Fidelity Reports,” (PLANADVISER, February 2, 2017)
Self-employed workers face greater retirement challenges,” (Employee Benefit News, February 2, 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.
All Worry About Retirement,” (PLANADVISER, November/December 2016)
How to debunk two common retirement savings myths,” (Employee Benefit News, January 30, 2017)
The 3 Biggest Tax Mistakes Retirees Make,” (Fox Business, January 30, 2017)
How to Cope With Student Loan Debt in Retirement,” (US News, January 30, 2017)
Older workers feel on track for retirement. Are they?” (USA Today, January 31, 2017)
6 Myths About IRAs You Can’t Afford To Believe,” (Forbes, January 31, 2017)
What’s the right 401k contribution rate?” (Employee Benefit News, January 31, 2017)
Older Generations Need Help Preparing for Retirement,” (PLANADVISER, February 1, 2017)
Coping with student loans in retirement,” (Employee Benefit Adviser, February 2, 2017)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: The ‘Free’ Retirement Money Many Overlook |
Business of Benefits: 403(b)’s “Limitation Year” Rules Demonstrate their “Individual” Nature-and Their Potential Value of the Universal Platform of the Future |
RetirementRevised: Mastering midlife and beyond |
Nerd’s Eye View: Behavioral Biases And The Hierarchy Of Retirement Needs |
Scholarly Financial Planner: B.I.C.E.: Financial Advisors Beware |
RetirementRevised: The facts about Social Security, Medicare may surprise you |
Squared Away Blog: Managing Money with Cognitive Decline |
Boston ERISA Law Blog: What Happens When the Pirates of the Caribbean Go Looking for a Financial Advisor to Help Invest Their Treasure? |
fi360 Fiduciary Talk 44: DOL Releases Second Set of FAQs |
Scholarly Financial Planner: Black Friday: President Trump Betrays Americans, and Embraces Wall Street Instead |
Nerd’s Eye View: DOL Fiduciary NOT Delayed By President Trump After All… |


Hot Tips from Popular Web Resources:
NAPA Net: Can Wholesalers Influence Advisor Fund Redemptions? |
NAPA Net: Edward Jones Dismissal Motion Largely Dismissed |
NAPA Net: Benefits Complexity Overwhelming Employers |
The Motley Fool: Here’s What You Need to Know About Required Minimum Distributions and Taxes |
NAPA Net: What’s Wrong With State-Run Retirement Plans? |
NAPA Net: Why You Shouldn’t Hire Your Brother-in-Law as Your Plan’s Advisor |
NAPA Net: Advice Arrangement Draws Another Participant Lawsuit |
NAPA Net: Is the Revised Form 5500 the Next Big Thing? |
NAPA Net: What Should HSA Plans Do Ahead of the Fiduciary Regulation? |
NAPA Net: DOL Still Defending Fiduciary Rule in Court |
NAPA Net: Did the January Effect Affect 401k Balances? |
NAPA Net: Hatch Cites ‘Opportunity’ for Tax Reform |
NAPA Net: Trump Tackles Fiduciary Reg Just Short of its ‘Go’ Line |
NAPA Net: Supremes Pondering Co-Fiduciary Liability Case | Things Are Happening Fast in Washington, Says NCPA Legislative Director |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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