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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 7/14/17 Trending Topics for ERISA Plan Sponsors: Week Ending 7/14/17
July 17
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 Folly of Risk and the 401k Fiduciary,” (, July 11, 2017) Many professionals and most of the current generation of finance professors have long ago removed “risk” from their investment decision-making algorithms. These forward-thinking folks recognize the greater importance of managing retirement saver behavior over managing irrelevant investment risk as it pertains to meeting or exceeding the goal of retiring in comfort.

Compliance – The Retirement Crisis is Not Where You Think:
Guess there really is a retirement crisis, it’s just not where people are looking. If you cogitate on that, you realize it makes where they are looking all the more dangerous. If there’s a lesson in this, it’s don’t solve what you think the problem is, solve the actual problem.
Reports of a US retirement crisis are off the mark: Think tank study,” (CNBC, July 5, 2017) Most people fear there will be a retirement crisis… for other people apparently, since most people also believe they’re doing just fine in terms of preparing themselves for retirement.
IRAs not serving intended savers: CRR,” (BenefitsPRO, July 6, 2017) Nearly half of all retirement savings is in IRAs (the other half being in company sponsored plans). Here’s the thing: It turns out people in company sponsored retirement plans have IRAs but people not in company sponsored retirement plans don’t. Why not? And is that a real problem or just a problem in the eyes of policy wonks?
The ironic nature of disclosure,” (BenefitsPRO, July 6, 2016) Lest you think disclosure solves anything…
Illinois using hybrid 401k to stop pension hemorrhaging,” (BenefitsPRO, July 10, 2017) Sure, why not.
Why 403(b) plans need to be protected now,” (Employee Benefit Adviser, July 13, 2017) A legal perspective on 401k plan close cousins.
Michigan to steer new school workers into 401k-only plan,” (Crain’s Detroit Business, July 13, 2017) This is a step in the right direction. It’s more definitive than Illinois’ effort.
Vermont Passes Bill to Implement State-Run Retirement Plan for Private-Sector,” (PLANADVISER, July 13, 2017) Another state goes ERISA rogue.

Fiduciary – Dumbing Down Fiduciary:
If you can’t score, move the goldposts.
Questions Point to ‘Diluted’ 401k Fiduciary Rule,” (The 401(k) Specialist, July 10, 2017) And some are saying this will result in lawsuits against the DOL.
‘Just Say No’ to CFP Board’s New Standards,” (ThinkAdvisor, July 11, 2017) Don Trone is worried this will create a “Fiduciary in Name Only” class of advisors.

Fees – Our Work Here is Done:
Apparently, the slew of class-action suits have exacted their toll.

Investments – Speaking of Problems Ignored:
On offense, it’s always best to hit where they ain’t. So, if you’re on defense, where do you think it’s best to protect? Where you ain’t. Ironic, yes, especially if you’re resource constrained. Fortunately, it doesn’t cost much to at least be able to identify where you ain’t.
Hidden Trigger For Another (Flash) Crash: Passive Investing,” (Wealth Management, July 11, 2017) Index investing are actively making a decision to place themselves in a peril they don’t seem to realize.

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.
Plan Assets and Prohibited Transactions,” (PLANADVISER, May/June 2017)
Ridiculously Bad Advice on the 4 Percent Retirement Rule,” (The 401(k) Specialist, July 9, 2017)
Brown University Latest Target for 403(b) Lawsuit,” (PLANADVISER, July 10, 2017)
What to know about the end of the IRS determination letter program,” (Employee Benefit News, July 11, 2017)
American Agrees to Pay $22 Million to Settle Proprietary Funds Case,” (PLANADVISER, July 11, 2017)
ERISA Lawsuit Filed Against MFS,” (PLANADVISER, July 12, 2017)
Businessman Ordered to Pay Back ERISA Plan Involved in Ponzi Scheme,” (PLANADVISER, July 12, 2017)
EBSA Fraud Investigation Leads to Lengthy Prison Sentence,” (PLANADVISER, July 13, 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.
Missing the employer match could derail your retirement goals,” (CNBC, July 7, 2017)
What to Do When He Wants to Retire One Place, She Another,” (Wall Street Journal, July 7, 2017)
401k Fraud: Wife Steals Thousands from Husband’s Account,” (The 401(k) Specialist, July 7, 2017)
Working past 70: Americans can’t seem to retire,” (Employee Benefit News, July 10, 2017)
Is $1.5 million in savings enough to retire?” (The Washington Post, July 10, 2017)
The Talk You And Your Spouse Need To Have About Retirement,” (Forbes, July 10, 2017)
6 Tax Questions To Ask Before You Retire,” (US News, July 10, 2017)
Most Americans With Set Financial Goals Don’t Forego Savings,” (PLANADVISER, July 11, 2017)
2 Men Who Bilked Retirement Plans Sentenced,” (ThinkAdvisor, July 12, 2017)
With risk, are you more like an insurance company or a riverboat gambler: Carosa,” (BenefitsPRO, July 12, 2017)
How do I know how much I’ll need in retirement?” (CNN, July 12, 2017)
Should you be a landlord in your retirement?” (MarketWatch, July 13, 2017)
Abolish all debt and 6 more tips to jump-start your retirement,” (MarketWatch, July 13, 2017)
Some Members of Gen X, Y Are Maxing Out Their 401k,” (PLANADVISER, July 13, 2017)

Wisdom from Some of Our Favorite Blogs:
Scholarly Financial Planner: CFPs to Become “F.A.A.T.”? – “Fiduciaries At All Times” |
Rosenbaum Law Firm: Retirement Plan Advisors Advantage |
The Rosenbaum Law Firm P.C. Blog: What Financial Advisors Really Do |
The Rosenbaum Law Firm P.C. Blog: Know whether it’s in you |
The Rosenbaum Law Firm P.C. Blog: The Appearance of Impropriety |
Squared Away Blog: Retirement Calculators: 3 Good Options |
Chicago Financial Planner: 401k Options when Leaving Your Job |
Rosenbaum Law Firm: Stuff in a 401k Plan That Doesn’t Look Right |
Data “Points”: What’s Wrong with Automatic Enrollment?

Hot Tips from Popular Web Resources:
NAPA Net: Fraud Scheme Taps into 401(k) Account for $40,000 |
NAPA Net: Excessive Fee Suit Filed Against Another Ivy League 403(b) |
NAPA Net: What the DOL’s New RFI Might Tell Us About a Future BICE |
Kiplinger: The Key to Setting Retirement Goals? Details |
The Motley Fool: 3 Retirement Myths, Debunked! |
NAPA Net: Airline’s Excessive Fee Turbulence Settles |
NAPA Net: What’s Wrong with Automatic Enrollment? |
NAPA Net: Perceived Costs, Resources Top Reasons for Not Offering Retirement Plan |
NAPA Net: Workers Interested in Employers Providing Retirement Educational Resources |
The Motley Fool: 3 Roth IRA Rules You Should Know by Heart |
Kiplinger: The 10 Most Important Years of Your Financial Life (& How to Prepare For Them) |
NAPA Net: Another Hearing on – and Attempted Repeal of – the Fiduciary Regulation |
NAPA Net: Case of the Week: Fee Disclosure Comparative Chart |
NAPA Net: Auto Features Helping Younger Workers with Retirement Saving |
The Motley Fool: A Step-by-Step Guide to Asset Allocation in Retirement |
NAPA Net: Clayton: SEC ‘Moving Forward’ on its own Fiduciary Rule |
NAPA Net: Adjusting to Changing Benefit Expectations |
NAPA Net: Let SEC Take Lead on Investment Advice Standards, Witnesses Say |
NAPA Net: Panelists: Common Sense Reforms Would Help HSAs Thrive |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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