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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 1/19/18 Trending Topics for ERISA Plan Sponsors: Week Ending 1/19/18
January 22
00:02 2018

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:
Exclusive Interview: Harold Evensky on Fiduciary: The Name is the Game,” (, January 9, 2018) Long-term investors like retirement savers can easily act like a fiduciary for their own assets. All they need to do is look in a mirror – but not for their own reflection. Look in a mirror a retirement professional is looking into and see how that reflection invests for retirement.

Compliance – Other Fish to Fry:
The government seems more interested in budget drama than other things. This begs the question: Are regulators “essential” personnel?
PBGC Increases Penalties for Failing to Provide Reports, Disclosures,” (PLANADVISER, January 17, 2018) “There is no practical difference between ‘adviser’ and ‘advisor’ in the eyes of the customer. Both suggest a level of relationship well beyond the standard of a brokerage relationship.”

Fiduciary – Name Game Continues:
When last we left, a growing number of voices were asking the SEC to buckle down on the use of confusing titles. The voices continue to grow.
States React to Fed Fiduciary Filibuster,” (The 401(k) Specialist, January 15, 2018) If you trust what you’re hearing from the states, then there might just be a bridge in Brooklyn you will interest you. And if you don’t know what this means, look at the picture in the article.
Discount brokers act like Wall Street on fee conflicts,” (On Wall Street, January 16, 2018) Not sure what this article is saying. On one hand, it’s OK for sales reps (i.e., brokers) to try to sell higher commission products/ On the other hand, it’s not in keeping with the fiduciary standard for advisers.
A rose is a rose… and a broker is a broker – Carosa,” (BenefitsPRO, January 17, 2018) If you’ve been following the Great Fiduciary Debate, then you might get the connection.
CFA Institute says SEC has immediate authority to clarify broker roles,” (BenefitsPRO, January 17, 2018) Yes, title matter. And the CFA Institute says it’s time to do something about it.

Fees – Are Courts Better than the Marketplace?:
If someone charges an excessive fee, their competitors ought to eat their lunch. If fees represent a self-serving conflict-of-interest, let the marketplace sue the pants off that person.
CFA Urges ‘No’ Vote On Bill Limiting Investor Right To Sue Mutual Funds For Excessive Fees,” (Financial Advisor, January 16, 2018) Not sure if by “fees” they’re referring to expense ratios (i.e., operating expenses) or conflict-of-interest fees (i.e., fees).

Investments – Too Much or Too Little:
You know you’re heading towards a market top when folks start complaining about esoteric investments and investment esoterica.
Advisors: Here’s how to assess your portfolio in a bull market,” (CNBC, January 16, 2018) Contrary to the article, now is not the time to gauge the “tolerance” of your risk. It’s the time to look and each investment and compare their downside risk to other investment options.
NYC Public Pension ESG Investing Debate Renews a Fight Familiar to Some,” (PLANADVISER, January 18, 2018) Once again there’s a reference to the DOL’s errant Rule allowing “social” investing to be exempt from fiduciary duty as justification for placing politics ahead of the best interests of the plan beneficiaries. Just wait until this one gets to court.

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.
DOL Sues Retirement Plan Fiduciaries for Misusing Plan Assets,” (PLANADVISER, January 12, 2018)
Court Finds Participants Failed to Meet Pleading Standards in HP Suit,” (PLANADVISER, January 12, 2018)
How retirement advisers can avoid the ‘average participant’ trap,” (Employee Benefit Adviser, January 16, 2018)
National retirement risk index improved slightly in 2016,” (BenefitsPRO, January 16, 2018)
Is your client ready for retirement?” (Financial Planning, January 16, 2018)
Clashing Financial Priorities Can Derail Participants,” (PLANADVISER, January 16, 2018)
How to Get Help With the 401k RFP Process,” (The 401(k) Specialist, January 16, 2018)
How to best understand target date fund options,” (Employee Benefit Adviser, January 16, 2018)
Vanderbilt University 403(b) Plans Suit Pared Down,” (PLANADVISER, January 16, 2018)
RFP guide for 401k plan sponsors, advisors and consultants released,” (BenefitsPRO, January 16, 2018)
Checking in With Verizon Pensioners Post Risk Transfer,” (PLANADVISER, January 17, 2018)
Plaintiff Adds Claims to University of Chicago 403(b) Suit,” (PLANADVISER, January 17, 2018)
Avoid pitfalls when choosing retirement plan administrative services providers,” (Employee Benefit Adviser, January 18, 2018)

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.
Many Millennials Now Have $100,000+ in Retirement Accounts. Here’s How They Did It,” (Money, January 10, 2018)
Should Tax Reform Change How You Save for Retirement,” (U.S. News, January 11, 2018)
Roth IRA: Now’s the Time to Convert Your Traditional IRA,” (Money, January 12, 2018)
Why this could be one of the best ways to invest in America’s future,” (MarketWatch, January 15, 2018)
Warning on new military retirement plan: Click carefully,” (BenefitsPRO, January 16, 2018)
The Best Way To Spend Money Safely In Retirement,” (Forbes, January 16, 2018)
5 key differences between Roth and traditional IRAs,” (CNBC, January 16, 2018)
With the new tax law, you need to update your estate plan,” (MarketWatch, January 16, 2018)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: Debt ‘Limits’ – Causation, Correlation or Coincidence? |
RetirementRevised: The year ahead: What retirees should watch out for in 2018 |
Squared Away Blog: Know About the Roth 401k Surprise? |
The Chicago Financial Planner: Retirement Plan Contribution Rates and Limits – 2018 |
Squared Away Blog: Half of Boomers Social Security Eligible |

Hot Tips from Popular Web Resources:
Kiplinger: You Can Pay $0 in Taxes on Your Retirement Income |
Morningstar: How the Tax Changes Affect Retirees and Pre-Retirees |
The Motley Fool: 5 Changes to Retirement Savings for 2018 |
NAPA Net: New Jersey Legislation Would Require Non-Fiduciary Disclosures |
NAPA Net: Awesome ‘Sauce’ |
NAPA Net: Consumers’ Level of Investment Experience May Not Be What You Think |
NAPA Net: Practitioners Must Give Additional Info to IRS Service Line |
The Motley Fool: 4 Reasons Americans’ 401k Balances Are Too Small |
Morningstar: What the Tax Cuts and Jobs Act Means for Retirement Benefits |
Kiplinger: Why Working Past 65 Can Be Doubly Rewarding |
NAPA Net: University of Chicago Excessive Fee Suit Gets Second Wind |
NAPA Net: Case of the Week: Is Rendering Advice to an HSA Owner Considered a Fiduciary Act? |
NAPA Net: Larger Plans Continue to Outpace Smaller Plans in Incorporating ESG Factors |
NAPA Net: How Do Millennials’ Savings Habits Compare to Other Generations? |
Kiplinger: To Be Ready for a Bear Market, Do a Portfolio Check |
The Motley Fool: How Do Your 401k Contributions Compare With Your Fellow Earners? |
NAPA Net: SEC Reportedly Accelerating Work on its Own Fiduciary Rule |
NAPA Net: Fiduciary Responsibility, Risk Management Top List of CIMA Enhancements |
NAPA Net: Does the Best Interest Standard Require ‘Best Investment’? |
Kiplinger: 1 Thing You Can’t Forget to Take When Leaving a Job |
The Motley Fool: Americans Are Putting Retirement Savings Ahead of Regular Savings |
NAPA Net: Survey Finds Fees a Fiduciary Focus |
NAPA Net: New Ground(s) Emerge in NYU Excessive Fee Suit |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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