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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 5/26/17 Trending Topics for ERISA Plan Sponsors: Week Ending 5/26/17
May 30
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:
When Does “Socially Responsible” Investing Violate Fiduciary Duty?” (, May 23, 2017) It goes without saying there are risks when one plays politics with other peoples’ money. The depths of the ensuing fiduciary liability will only be tested when the tort bar brings the matter to court. Until then, fiduciaries may wish to proceed with caution.

Compliance – Crazy Mixed-Up World:
Lotsa moving parts here. Who knows where it will all end up.
Legislators Asked to Consider Effect of Rules on Retirement Savings,” (PLANADVISER, May 19, 2017) If you don’t mind slogging through the moaning about the Fiduciary Rule there’s some juicy MEP comments on page 2 of the article.
Defying Senate, Another State Passes Retirement Plan,” (The 401(k) Specialist, May 22, 2017) “Defying Senate” isn’t quite accurate. The Senate did not outlaw state-run retirement plans for private employees, it merely requires them to abide by the same ERISA standards all other retirement plans abide by.
Here’s the Obama DOL fiduciary policy Trump’s DOL really should rescind,” (BenefitsPRO, May 24, 2017) Both the Clinton and Bush administrations reaffirmed the importance of not playing politics with other people’s money. The Obama DOL reversed this long standing tradition. Will Trump do a double-reverse?
DOL Fiduciary Deadline Is Coming. Here’s a Compliance Checklist,” (ThinkAdvisor, May 26, 2017) Here’s a ten point checklist. Less of a checklist and more of a ten point list of things.

Fiduciary – The Fiduciary Man Cometh:
It’s coming. Prepare. Repent. Or whatever you feel comfortable doing.
Fiduciary rule will prevail even if repeal is attempted: Borzi,” (Financial Planning, May 22, 2017) Yes, but not for the reasons she states.
DOL Confirms June Fiduciary Date, Issues Enforcement Delay,” (The 401(k) Specialist, May 22, 2017) This is silly. The DOL never had any intention of enforcing the Rule. When it was announced last year the official response was that the DOL would be relying on the private tort bar to bring cases based on the rule.
Bureaucrat Borzi Blunt About Fiduciary, Fees, Fears,” (The 401(k) Specialist, May 22, 2017) A pleasant conversation with the hero of the Fiduciary Rule.
Fiduciary Rule Proponents Preening Over Victory, But Their Cheering May Be Short-Lived,” (Financial Advisor, May 23, 2017) As they say, “Never say never.”
Sticking to DOL Fiduciary Deadline Is ‘Right Move,’ Says fi360’s Aikin,” (ThinkAdvisor, May 23, 2017) The announcement could not have been better timed for fi360, which was in the middle of its annual convention.
Fiduciary Rule Implementation Now Appears Certain,” (PLANADVISER, May 23, 2017) Still a lot of “defining” to go before implementation.
‘Dilute’ the Fiduciary Rule, Get Sued: Aikin,” (The 401(k) Specialist, May 23, 2017) Aiken sees the foundation as “too strong” to disturb.
Fiduciary rule’s best interest stays, but plaintiffs’ bar checkmated until first of next year,” (BenefitsPRO, May 24, 2017) No enforcement until January 2018 means not only will the DOL do nothing, but neither can the class actin attorneys.

Fees – Hocus Pocus:
Welcome to the wonderful world of statistics. It can make you believe anything, and then the exact opposite, and you won’t even notice the discrepancy.
The ‘Below Average’ Fund Fee Could Eat Your Client’s Retirement,” (Financial Advisor, May 24, 2017) Does “average” refer to the arithmetic or geometric average? In an age when “low fees” seems to be selling, be wary of such claims, no matter how well documented. Do your own research. And don’t forget to look at performance. It turns it some high fee funds made a lot more money for their shareholders than their lower fee competitors.

Investments – Rethinking the Consensus:
Some folks woke up and found their long-held paradigm has been crushed by the sands of time. And possibly statistics.
Bogle: Indexing Has Its ‘Flaws’,” (Financial Advisor, May 23, 2017) Interesting. He believes the huge size of the top three index firms may lead to regulatory oversight (perhaps in the form of anti-trust legislation?). He’s got other “problems” but you can read them for yourself.
The Rise and Fall of Modern Portfolio Theory,” (BenefitsPro, May 26, 2017) This is a good rundown of the chronology of event regarding the concept that defined a generation.

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.
Military-Member Employees Sue FedEx Over Pension Contributions,” (PLANADVISER, May 19, 2017)
Plan Providers Emphasize Need for Nimble Tech, Greater Scale,” (PLANADVISER, May 19, 2017)
ESOPs Present Business Transition Planning Opportunity,” (PLANADVISER, May 22, 2017)
Fred Reish Gets Real With Retirement Plan Rollovers,” (The 401(k) Specialist, May 22, 2017)
3 things employers need to know before the fiduciary rule takes effect,” (Employee Benefit News, May 23, 2017)
Pre-Retirees Need Help Planning for Retirement Vision,” (PLANADVISER, May 23, 2017)
Retirement literacy continues to lag among older employees,” (Employee Benefit News, May 23, 2017)
Excessive Fee Lawsuit Filed Against University of Chicago,” (PLANADVISER, May 24, 2017)
Princeton Retirement Plan Faces ERISA Challenge,” (PLANADVISER, May 25, 2017)
Retirement Savings Gap Seen Reaching $400 Trillion By 2050,” (Financial Advisor, May 26, 2017)
Employer-based retirement system failing middle-class Americans, says ARA’s Graff,” (Employee Benefit Adviser, May 26, 2017)
Retirement savings gap seen reaching $400 trillion by 2050,” (BenefitsPRO, May 26, 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.
Millennials Saving More for Financial Freedom,” (PLANADVISER, May 19, 2017)
Ron Lieber says compound interest chart changed his life,” (CNBC, May 19, 2017)
Health savings accounts can supercharge retirement funds, but not for this guy,” (Los Angeles Times, May 21, 2017)
Student Loans Hindering Young People from Saving for Retirement,” (PLANADVISER, May 22, 2017)
Millennials are saving for financial freedom – not retirement,” (Yahoo Finance, May 22, 2017)
Not Saving Early Enough for Retirement Is Biggest Financial Regret,” (PLANADVISER, May 23, 2017)
Family finances: Rolling over a 401k into an IRA,” (Chicago Tribune, May 24, 2017)

Wisdom from Some of Our Favorite Blogs:
Proskhauer: Department of Labor’s New Fiduciary Rule Will Go Into Effect June 9th |
The Rosenbaum Law Firm P.C. Blog: Legal Costs Don’t Have To Be Staggering |
The Rosenbaum Law Firm P.C. Blog: The profound change in the end was good |
The Rosenbaum Law Firm P.C. Blog: Don’t Chisel Other Plan Providers |
ERISA Lawyer Blog: DOL Announces A Temporary Enforcement Policy On New, Final Fiduciary Rule |
Squared Away Blog: Fewer Older Americans Work Part-time |
Nerd’s Eye View: Despite No More Delay, DOL Fiduciary Not A Done Deal Yet! |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #48 |
Ary Rosenbaum: Using Your Payroll Provider As Your 401k TPA Is A Big Mistake |

Hot Tips from Popular Web Resources:
The Motley Fool: Roth IRA Tax Guide for 2017 |
NAPA Net: DOL Answers Transition Period Questions in New FAQs |
NAPA Net: Neuro-Fiduciary: Using Neuroscience to Amplify Fiduciary Metrics |
NAPA Net: Will Rising Rates Ravage Retirements? |
NAPA Net: Another University Faces Excessive Fee Lawsuit  |
The Motley Fool: A Big Social Security Change Is Coming in 2020, and You Probably Aren’t Aware of It |
NAPA Net: Treading Familiar Grounds, Another University’s Retirement Plans Sued |
NAPA Net: Would You See a Podiatrist for a Heart Attack? |
NAPA Net: Fund Flows Fan Falling Fund Fees |
NAPA Net: What Participants (Still) Get Wrong About HSAs |
NAPA Net: Plaintiff Gets Served With Attorney Fees in Pension Case |
NAPA Net: 6 Ways Men and Women Differ on Retirement |
Kiplinger: Best Banks for Retirees |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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