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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 4/14/17 Trending Topics for ERISA Plan Sponsors: Week Ending 4/14/17
April 17
00:04 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:
How a Fiduciary Should Explain ‘Growth’ and ‘Value’ Investing Styles,” (, April 11, 2017) These are the times it’s most important for fiduciaries to learn how to say “no” to clients who feel compelled to set their own best interests aside just to chase investment performance. No one is saying that’s an easy job.

Compliance – 401k Ascendent:
Blame it on Trump. There’s a growing realization/acceptance/understanding that the 401k is the way to go when it comes to saving for retirement.
How Much Would 401k Participants Save With Auto Portability?” (The 401(k) Specialist, April 6, 2017) When the default option is to withdraw retirement savings prematurely, you can sure bet autoportability will result in higher savings rates.
A Surprising 401k Defense From an Unlikely Source,” (The 401(k) Specialist, April 10, 2017) Tragically hip Mother Jones takes on Wall Street Journal’s complaint about 401k leakage and concludes it’s better to keep 401k plans as is – warts and all – rather than converting everything to Social Security.
Another (Big) Reminder of Why We Like 401ks,” (The 401(k) Specialist, April 11, 2017) Those that live by the government handout die by the government budget restructuring. In this case, pushing up the retirement age may actually do that. Sorry Brits.
Military Retirement Benefits Revamped to Attract Millennials,” (Money, April 13, 2017) And here we see why the pension died and was replaced by the 401k. To attract younger people, the military is no longer making the 20 year veteran pension the only retirement option for new recruits. It’s adding a 401k style option; thus, simultaneously giving people more control over their own retirement and setting in place a more permanent reduction of the Ponzi liability associated with pension plans.
Trump Nullifies Muni-Run IRA Plans,” (ThinkAdvisor, April 14, 2017) And with a stroke of the pen, millions of retirement savers are granted ERISA protection the Obama administration gave away to promote their political allies in state governments.

Fiduciary – Delayed but Still Debated:
It doesn’t appear the delay in the Fiduciary Rule has stopped the debate.
DOL in Open Revolt Over Fiduciary Rule Delay,” (The 401(k) Specialist, April 13, 2017) This is a commentary on the Wall Street Journal op-ed that speaks of the Deep State embeds in the DOL that appear to be trying to run out the clock on the new Trump administration. It’s going to be a long four years, or at least however long it takes for the Senate to approve Trump’s appointees.
Morningstar Pushes Change in DOL Fiduciary Rule Enforcement,” (ThinkAdvisor, April 13, 2017) On the heels of the relevant regulatory agency acting with typical dysfunction, a third party provider comes out with a recommendation that the Fiduciary Rule’s “best interest” standard should be monitored by – guess who? – a third party provider. In who’s best interest is that”
Do Too Many Rules Really Lead to Bad Advice?” (ThinkAdvisor, April 13, 2017) Bob Clark takes on Don Trone. Bring on the popcorn!

Fees – Nothing to See Here:

Investments – The Perils of Performance:
Just when you think you can trust investment returns, the reality of the “snapshot-in-time” anomaly rears its ugly head.
Passive Investments: Far From Perfect,” (ThinkAdvisor, April 7, 2017) In the last year or so, the rolling 3-year numbers for the Russell 3000 has exceeded the top 25% threshold of all domestic equity mutual funds. However, if one peels back the layers, you’ll find the Russell 2000 (small cap) value series continues to perform below the median of similar mutual funds.
What Investors Need to Understand About ‘Investment Return’,” (Wall Street Journal, April 9, 2017) A great primer on the fundamentals of investment return jargon.
Should 401k plans offer only index funds?” (Employee Benefit Advisor, April 11, 2017)  The conclusion was reasonable (you should have both) but the arguments the author made to get there were a tad off.
Boomers Abandoning TDFs at or Near Retirement,” (PLANADVISER, April 11, 2017) Actually, they’re leaving company plans in general and TDFs are just collateral damage. This migration makes sense since retirees benefit more from customized strategies rather than one-size-fits-all strategies such as corporate plans.
First quarter ‘growth’ spurt shows dangers of ‘snapshot-in-time’ performance anomalies,” (BenefitsPRO, April 12, 2017) Before you get excited about any particular investment style showing an overwhelming performance advantage, read this article.

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.
BlackRock TDFs Called Out in 401k Excessive Fee Case,” (PLANADVISER, April 7, 2017)
Putnam Prevails in 401k Self-Dealing Suit,” (PLANADVISER, April 7, 2017)
7 questions every plan sponsor should ask their TDF provider,” (Employee Benefit News, April 10, 2017)
Why employers should help millennials prepare for retirement,” (BenefitsPRO, April 10, 2017)
Peabody Energy Wins Dismissal of Stock Drop Suit,” (PLANADVISER, April 10, 2017)
Fiduciary rule delay gives plan sponsors more time to ask crucial questions,” (Employee Benefit Adviser, April 11, 2017)
No end to the daily grind? Older Americans plan to work in retirement,” (USA Today, April 11, 2017)
Attorneys Move to Send Schwab Self-Dealing Suit to Arbitration,” (PLANADVISER, April 11, 2017)
Keeping Plan Sponsors Out of the Headlines,” (Wealth Management, April 11, 2017)
Why mending fractured retirement savings is key to financial wellness,” (Employee Benefit Adviser, April 12, 2017)
What An Examination of 52,000 Retirement Plans Found,” (The 401(k) Specialist, April 12, 2017)
What to do when the DOL comes knocking,” (BenefitsPRO, April 12, 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.
How To Beat The Conventional Wisdom: Part 1,” (Financial Advisor, April 2017)
Social Security Can’t Finance Your Retirement, Boomers – Take Action Now,” (Forbes, April 6, 2017)
Fear of retirement is ‘greatest problem,’ says BlackRock’s Larry Fink,” (CNBC, April 6, 2017)
Generation X: Don’t slack on your retirement,” (MarketWatch, April 6, 2017)
To Defer or Not To Defer—How About Both?” (Wealth Management, April 7, 2017)
A Social Security strategy for the wealthy,” (MarketWatch, April 10, 2017)
Are Your Clients Jeopardizing Their Retirements?” (Financial Advisor, April 10, 2017)
10 questions to ask yourself before early retirement,” (BenefitsPRO, April 11, 2017)
Do boomers know how to handle RMDs?” (BenefitsPRO, April 11, 2017)
IRA Withdrawal Rules: When You Can Undo Without a Penalty,” (Money, April 11, 2017)
Pros and Cons of 401k Brokerage Options,” (US News, April 12, 2017)
Here’s why people are anxious about retirement,” (MarketWatch, April 12, 2017)
Titanic Problems Facing Retirement,” (Financial Advisor, April 13, 2017)
Many retirees spend retirement lump sums too quickly,” (BenefitsPRO, April 13, 2017)

Wisdom from Some of Our Favorite Blogs:
Ary Rosenbaum: Thinking Outside The Box For Plan Providers |
Scholarly Financial Planner: June 9, 2017: Many IRA Account Contracts Include Impartial Contract Standards as an “Implied Term” |
The Rosenbaum Law Firm P.C. Blog: Don’t Give Up |
The Rosenbaum Law Firm P.C. Blog: You have a choice in who you hire as a plan provider |
Behavior Gap: Talking About Money? Think Carefully About Feelings |
Business of Benefits: Is Lifetime Income’s Future – and, Ultimately, That of Retirement Security – Through the IRA? |
Behavior Gap: Focus on the Current Step |
Pension Risk Matters: Funny Courtroom Film Still Used For Teaching |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #42 |
Squared Away Blog: Hispanic Retirees: Low Saving, Long Life |
Nerd’s Eye View: Why The June 9th DOL Fiduciary Delay Is Likely The Last |
Ary Rosenbaum: What It Takes To Make A Good Retirement Plan |
Scholarly Financial Planner: June 9th: Strict Fiduciary Obligations to Arise? |

Hot Tips from Popular Web Resources:
Kiplinger: Managing Your Money in Old Age |
NAPA Net: Fiduciary Litigation: Another One Bites the Dust |
The Motley Fool: A Majority of Millennials May Very Well Outlive Their Retirement Savings |
Morningstar: An Investing Road Map for Pre-Retirees |
Kiplinger: The Trouble with Target-Date Funds in Retirement |
NAPA Net: Report Cites Big Employer Price Tag for Delayed Retirements |
NAPA Net: 5 Things You May Not Know About HSAs |
NAPA Net: Provider Argues for Arbitration in Proprietary Fund Suit |
The Motley Fool: This New Approach to Social Security’s Full Retirement Age Would Eliminate 83% of Its Cash Shortfall |
NAPA Net: Survey Finds Healthy Uptick in Financial Wellness |
NAPA Net: What is the Definition of Disability for Purposes of the Early Distribution Penalty Tax? |
NAPA Net: Are Lump Sums Running Short Too Soon? |
Morningstar: Spending Trends Boost Safe Withdrawal Rate for Retirees |
The Motley Fool: Don’t Make These Retirement Savings Mistakes |
Kiplinger: 3 Reasons Target Date Funds Not Right for Anyone! |
NAPA Net: What’s the Top Benefit Priority? |
NAPA Net: No March Madness for Participant Transfers |
NAPA Net: Retirement Plan Marketing Is an Awareness Journey |
Morningstar: 10 Do’s and Don’ts for Last-Minute IRA Contributions |
NAPA Net: Trump Closes Safe Harbor for City-Run Programs |
NAPA Net: Reader Poll: A Changing Role For Rollovers? |
NAPA Net: Rollovers Under the DOL’s (Extended) Final Rule |
NAPA Net: Want to Make a Difference in Retirement Policy? |
Kiplinger: How to Sidestep RMDs From Roth 401k plans |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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