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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 9/15/17 Trending Topics for ERISA Plan Sponsors: Week Ending 9/15/17
September 18
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:
Social Security – A Promise Breaking?” (, September 12, 2017) While Social Security is not going “bankrupt,” it’s clear it will have to change in both a fundamental and disruptive way.

Compliance – If You See Rats Leaving the Ship…:
The metaphor is simply a metaphor, not a statement of judgement on those pension plans choosing to “de-risk” their pension plans. This trend, however, does make one wonder. If corporate plan sponsors are trying to remove the liability associated with their pension risk, why are federal, state, and local governments not following this trend.
Pension risk transfers surge in second quarter,” (BenefitsPRO, September 4, 2017) They call it “de-risking,” but what it really means is “risk shifting” – from the plan sponsor to the insurance company and the retiree.
IRS Page Lists 403(b) Plan Compliance Duties Related to Common Plan Errors,” (PLANADVISER, September 11, 2017) The list of errors makes it worth the read.
Time to face the brutal truth about Social Security: Carosa,” (BenefitsPRO, September 13, 2017) Once you realize what life expectancies were when Social Security was originally enacted versus what they are today, it’s easy to understand why there are vastly fewer workers per Social Security recipient.

Fiduciary – Grandpa, tell me that story again…:
It all goes back to “if I only knew then what I know now.” People want “fiduciary” for themselves, but they don’t want to be a fiduciary for others.
Mitigating Fiduciary Risks,” (Wealth Management, September 8, 2017) Just a reminder that it isn’t just corporate plan sponsors that face fiduciary liability risks – any trustee for any form of trust can experience this same downside.
401k Participants Want Fiduciary Advisors, But …,” (The 401(k) Specialist, September 12, 2017) OK, they like it but they don’t know what it means.

Fees – Darn those Conflicts-of-Interest…:
Now that the fee wars turned out to be not a useful thing, attention is once again returning to the real culprit – conflicts-of-interest.
Target-Date Funds Under Renewed Scrutiny,” (Financial Advisor, September 11, 2017) Looks like some of those old Target Date Funds may have had some fees attached to them that no longer pass muster. Time for plan sponsors to take another look at them.
Reputation Rather than Fees Drives Most IRA-to-IRA Transfers,” (PLANADVISER, September 11, 2017) It’s like what the DOL has long said about fees – they mean nothing if you don’t factor value into the equation.
Morningstar Advocates Refining the Definition of Clean Shares,” (PLANADVISER, September 13, 2017) This is all about exposing the embedded conflicts-of-interest.

Investments – Behaving Rational in an Irrational Way:
There are those who believe investors act rationally (i.e., adherents to Modern Portfolio Theory) and there are those who believe investors act irrationally (i.e., behavioral economists). Is it possible investors merely act rational in an irrational way?
A Walk Through Richard Thaler’s Mind,” (ThinkAdvisor, September 8, 2017) Clever title for an interview who essentially exposed the fallacy of “A Random Walk Down Wall Street.” He refers to economists as “econs,” the moral equivalent of the dispassionate Mr. Spock. The best quote from Thaler is: “Real people are rarely deciding anything. We spend our lives doing, and sometimes we have to decide. Also, econs have no self-control problems. They choose the best thing for them all the time … now there may be people like that, but I don’t know any.”

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.
Small businesses recognize the benefits of 401k plans — but don’t always invest,” (Employee Benefit Adviser, September 4, 2017)
Advisors Need To Know About These Common Retirement Scams,” (Financial Advisor, September 5, 2017)
Start an outside-the-box conversation to improve open enrollment process,” (Employee Benefit News, September 5, 2017)
3 Common RMD Errors Advisors Must Avoid,” (ThinkAdvisor, September 5, 2017)
Why employers should be thinking TPA,” (Employee Benefit News, September 5, 2017)
Plaintiffs use reputation risk in 401k lawsuits against money managers,” (BenefitsPRO, September 6, 2017)
How to help business owners plan for retirement,” (Financial Planning, September 6, 2017)
Prepping retirement plans for DOL ERISA IRS investigations,” (Employee Benefit Adviser, September 7, 2017)
Fifth Circuit rules bankruptcy trustees can’t have chapter 7 debtors’ IRA funds,” (BenefitsPRO, September 7, 2017)
What Workers Want, and Aren’t Getting, From Their 401k Plans,” (ThinkAdvisor, September 11, 2017)
Most employees not receiving retirement investment advice,” (Employee Benefit News, September 11, 2017)
Third of Plan Sponsors Want to Switch Advisors: Fidelity,” (ThinkAdvisor, September 11, 2017)
Retirement: More Than a Third of Entrepreneurs Don’t Have a Plan,” (Fortune, September 11, 2017)
How to Survive a DOL Audit,” (The 401(k) Specialist, September 12, 2017)
SEC Accuses 403(b) Plan Advisory Firm of Conflicts-of-Interest,” (PLANADVISER, September 13, 2017)
Free Communications Campaign Offered to Retirement Plan Sponsors,” (PLANADVISER, September 14, 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.
10 millennial retirement, money and work strategies,” (BenefitsPRO, September 1, 2017)
Top 1 percent have 200 times more retirement savings,” (BenefitsPRO, September 4, 2017)
Helping Clients Recover Their Retirements: Pt. 1,” (ThinkAdvisor, September 5, 2017)
Creditor Protection in Retirement Accounts,” (Wealth Management, September 5, 2017)
Gig Economy Wreaks Havoc With Retirement Saving,” (The 401(k) Specialist, September 10, 2017)
Making a Living as a Freelancer? Here’s How to Save for Retirement,” (Wall Street Journal, September 10, 2017)
Are Saving More and Working Later the Only Options to Improve Retirement Readiness?” (PLANADVISER, September 11, 2017)
After-Tax 401k Contributions: How Do They Stack Up?” (ThinkAdvisor, September 11, 2017)
Should I convert an inherited retirement account to a Roth?” (MarketWatch, September 11, 2017)
How much you should have saved by 45,” (CNBC, September 11, 2017)
Millennials Missing Out on Growing Retirement Savings,” (PLANADVISER, September 12, 2017)
4 Basic Retirement Income Risks to Manage,” (ThinkAdvisor, September 12, 2017)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: A “Real Life” Example |
Ary Rosenbaum: Focusing Just On Fees Can Make 401k Plan Sponsors Neglect Other Problems |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #61 |
Business of Benefits: How to Do a 403(b) Collective Trust: “Reverse-Engineering” the University of California 403(b) CIT |
The Rosenbaum Law Firm P.C. Blog: Edison must pay in long running Tibble lawsuit |
The Rosenbaum Law Firm P.C. Blog: If it bleeds, it leads. If it’s thrown out, forget about it. |
Squared Away Blog: Moving? Check the State Taxes First |
Nerd’s Eye View: Fiduciary RIA Conflicts Of Interest With Their Custodians |
The Rosenbaum Law Firm P.C. Blog: Get Rid of Bad Decision Makers |
Ary Rosenbaum: What They Don’t Know As A 401k Sponsor May Hurt Them |

Hot Tips from Popular Web Resources:
NAPA Net: DOL, Thrivent Remain at Odds in Fiduciary Litigation |
NAPA Net: How Much Fee Differential Justifies a Provider Move? |
NAPA Net: Do Stocks Outperform Treasury Bills? |
NAPA Net: ICI Finds Minimal 401k Account Changes in 1st Quarter |
Kiplinger: Tax Diversification: An Untapped Resource for Wealth |
Morningstar: Who Should Inherit Your IRA? |
The Motley Fool: 37 States That Don’t Tax Social Security Benefits |
NAPA Net: Small Plan Participant Files Excessive Fee Suit with Big Impact |
NAPA Net: Are You (Just) a Retirement Plan Monitor? |
NAPA Net: What Motivates Investors to Switch IRA Providers? |
NAPA Net: ARA Backs Tiered Approach to Full BIC Applicability Date |
NAPA Net: Case of the Week: Setting up a SIMPLE IRA Plan |
NAPA Net: Do Seniors Have More Income Than We Think? |
The Motley Fool: If You Aren’t Investing in Stocks, You Probably Aren’t Making Any Real Money Right Now | 5 Things to Do In Your 50s and 60s to Boost Retirement Savings |
NAPA Net: Study Underscores Savings Differences Between Men and Women |
NAPA Net: SEC Calls Out RIAs on Misleading Advertising |
NAPA Net: Excessive Fee Suit Takes a Step Forward |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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