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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 5/12/17 Trending Topics for ERISA Plan Sponsors: Week Ending 5/12/17
May 15
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:
How the Media and Markets Conspire to Thwart Retirement Savers,” (, May 9, 2017) Thanks in part to media reporting, retirement savers objectives are often misplaced. Striving for a high return or outpacing a particular index does not make for a successful retirement savings strategy.

Compliance – Political Will Trumps Common Sense:
Last year, the states insisted they needed an ERISA exemption in order to move forward with their state-run retirement plan for private employees scheme. The got it and they did it. Now they don’t have that exemption, but it’s “Damn the torpedoes, full speed ahead.” Meanwhile, if folks really wanted to save nothing is preventing them from using their own personal IRAs without the need for a patrician government overseer.
Fiduciary Rule Litigation,” (PLANADVISER, March/April, 2017) This isn’t so much about the Rule specifically but by the general precedent set through the litigation process of the Fiduciary Rule. It may embolden the DOL to regulate more aggressively in the future.
States plan to move forward with auto-IRA retirement plans,” (BenefitsPRO, May 5, 2017) Apparently, a retirement “crisis” is a terrible thing to waste… when it can be used to advance the purposes of the state. Let’s see what they think after their first ERISA suit. After all, when it comes to class action, tax payer funds represent the Holy Grail.
Pension contributions up, funded status stagnant,” (Employee Benefit News, May 7, 2017) Bottom-line: No plan sponsor wants to overfund his pension for fear the market and interest rates will spike up.
States Revolt Over Retirement Plan Repeal,” (The 401(k) Specialist, May 8, 2017) Well, sure they will…
State-Run Plan Momentum Likely to Continue,” (PLANADVISER, May 9, 2017)
IRAs have lost their way — they don’t increase retirement savings,” (MarketWatch, May 10, 2017) What’s the difference between forcing people to save in their own IRAs and forcing them to save in state-run IRAs? The article doesn’t answer this question.
What Retirement Crisis? Asks ICI Economist,” (Financial Advisor, May 11, 2017) Read this. It may make you feel better. And it may make you question the motives of those claiming there’s a “retirement crisis.”

Fiduciary – Words vs. Actions:
We hear a lot of talk about killing the DOL’s Fiduciary Rule, but, then again, we heard a lot of talk about killing ObamaCare. Last we saw, ObamaCare remains and it looks like its spirit will continue to haunt the nation. At least until the Republicans take the House. I mean until they take the Senate. I mean until they take the Presidency. I mean, aw, just forget it.
Killing Fiduciary Rule Seen as New DOL Chief’s Top Priority,” (ThinkAdvisor, May 11, 2017) Fred Reish spills the beans.

Fees – You Don’t Know What You Don’t Know:
But, in some very important cases, you should.
Why All the Fuss Over 401k Fees?” (The 401(k) Specialist, May 10, 2017) Here’s one reporter’s take on a recent Wall Street Journal article.
Poor reporting enables financial illiteracy,” (BenefitsPRO, May 10, 2017) Another reporter with a different point of view on the same Wall Street Journal article. Which interpretation do you prefer?
In Reversal, Merrill OKs Retirement Account Commissions in ‘Limited Situations’,” (ThinkAdvisor, May 11, 2017) And so it begins…

Investments – Bogle Tells the World a Truth He’s Known For Some Time:
When we spoke to Jack Bogle last year, we were impressed with how quickly he was able to explain the problem with index funds. He honestly felt they’d never get more than 45% of the market. We were surprised because he never revealed this knowledge to the public, though he hinted at it in our published interview. Now he’s publicly stated it outright.
Millennials Making Risky Investment Decisions,” (PLANADVISER, May 8, 2017) The sins of the fathers are the sins of the sons. Millennials are making the same behavioral mistakes when it comes to investing that previous generations have made.
Bogle Says If Everybody Indexed, Markets Would Fail Under Chaos,” (Wealth Management, May 8, 2017) Could it be that Jack Bogle read this article: “3 Reasons to Outlaw Index Investing Right Now (and One Selfish Reason Not To) in 5 Acts,” (, May 12, 2010)?
3 Questions to Ask (Now!) About Target Date Funds,” (The 401(k) Specialist, May 11, 2017) The title doesn’t explain the article, but the white paper the article discusses. You’ll have to read the white paper for the questions.

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 401k Plan Forfeitures?” (The 401(k) Specialist, May 3, 2017)
Participant Understanding of Fees Improves Only Slowly,” (PLANADVISER, May 5, 2017)
How Do Workers Feel About 401k plans?” (The 401(k) Specialist, May 5, 2017)
Retirement calculator seen as critical tool,” (Employee Benefit Adviser, May 7, 2017)
5 cheap (or free) ways to improve retirement wellness,” (BenefitsPRO, May 8, 2017)
More employers view HSAs as part of retirement strategy,” (Employee Benefit News, May 8, 2017)
Remind 403(b) Plan Sponsor Clients to File Form 990,” (PLANADVISER, May 9, 2017)
Past retirement age? That’s not going to stop workers from working,” (BenefitsPRO, May 9, 2017)
IRS Announces HSA Limits for 2018,” (PLANADVISER, May 9, 2017)
3M Announces DOL Investigation,” (PLANADVISER, May 9, 2017)
Another Health System Settles Church Plan Challenge,” (PLANADVISER, May 10, 2017)
Fiduciaries take aim at plan menu design,” (Employee Benefit News, May 11, 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.
Americans get ‘F’ in retirement literacy,” (BenefitsPRO, May 5, 2017)
When can you take money out of a Roth IRA?” (MarketWatch, May 5, 2017)
Why job hopping can hurt your retirement,” (USA Today, May 7, 2017)
Why 401k loans are the worst possible investment,” (Employee Benefit News, May 8, 2017)
6 Times Rolling Your 401k Into An IRA Could Cost You,” (Forbes, May 9, 2017)
Everything you need to know about reverse mortgages,” (MarketWatch, May 9, 2017)
Punching in past 65: Older-worker rate highest since 1962,” (USA Today, May 10, 2017)
How much can I expect to earn on my retirement savings?” (CNN, May. 10, 2017)
Many Retirees Advised To Spend Too Conservatively,” (Financial Advisor, May 11, 2017)
Most employees fail to understand basic retirement concepts,” (Employee Benefit News, May 11, 2017)

Wisdom from Some of Our Favorite Blogs:
Scholarly Financial Planner: Dear Thrift Savings Plan: Are You Shortchanging U.S. Government Workers? |
Data “Points”: 5 Things You May Not Know About Roth 401k plans |
Data “Points”: 5 Things People Get Wrong About Fidelity Bonds |
Rosenbaum: Retirement Plan Advisors Advantage |
Data “Points”: Here We Go Again… |
Scholarly Financial Planner: The DOL Fiduciary Rule: Simply Great for the U.S. Economy, American Corporations |
The Rosenbaum Law Firm P.C. Blog: Yes, DOL audits are more terrifying |
Squared Away Blog: Retirement Ball’s in Employers’ Court |
fi360 Blog: The June 9 Fiduciary Deadline and Key Issues for Broker-Dealers |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #46 |
RetirementRevised: Behavioral economics works for retirement saving; let’s try it in the states |

Hot Tips from Popular Web Resources:
NAPA Net: Could Small Plan Formation Be a First Casualty of Tax Reform? |
NAPA Net: Are Your Plan Sponsor Clients Catching on to Financial Wellness? |
NAPA Net: 401k Makes Comeback as Retirement Source |
The Motley Fool: The Best Investing and Retirement Advice for Your 50s |
Kiplinger: Retirees, Survive and Thrive in the Gig Economy |
NAPA Net: Grassroots Effort Underway to Block Fiduciary Regulation |
NAPA Net: Catching Up on Catch-Up Contributions |
NAPA Net: Millennials More Likely to Rely on Workplace Education, Managed Accounts |
NAPA Net: IRS Announces Bump in 2018 HSA Limits |
Kiplinger: Avoiding the IRA Beneficiary Tax Trap |
NAPA Net: Acosta Looking to Freeze DOL Fiduciary Regulation |
NAPA Net: Case of the Week: Decrease in Employer Stock Value in a 401k Plan |
NAPA Net: House Republicans Press for Documents on Fiduciary Rule Delay |
NAPA Net: 10 Funds That Beat the Market Over 15 Years |
Kiplinger: Battle Isolation by Staying Engaged |
The Motley Fool: Can I Own More Than 1 IRA? |
NAPA Net: Could a Switch to Roth Be Good for Retirement Security? |
NAPA Net: 2nd Voice Weighs in on 1st Amendment Challenge to Fiduciary Rule |
Kiplinger: 2-Part Strategy for Retirees Seeking Safe Cash Flow |
NAPA Net: Everybody’s a ‘Critic’? |
NAPA Net: TIAA Settles Excessive Fee Suit for $5 Million |
NAPA Net: University Excessive Fee Suit Gets a Hearing |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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