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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 1/26/18 Trending Topics for ERISA Plan Sponsors: Week Ending 1/26/18
January 29
00:03 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:
Child IRA Chapter Excerpt: ‘Gaming & Saving’,” (, January 23, 2018) A family that plays together, saves together. Establishing a Child IRA benefits the next generation. Given its tremendous power, the Child IRA remains one of the most under-appreciated retirement savings tools available. In the remaining chapters, we’ll present a virtual “how-to” manual that shows how different groups of people can implement and enjoy the advantages of the IRA.

Compliance – Step by Step…:
No, we’re no going to Niagara Falls, but we are inching closer to making improvements in retirement plans. Seems like we’ve been stagnant on this issue since 2006, so it’s about time.
More Calls For MEPs to Cover Gig Economy Workers,” (The 401(k) Specialist, January 18, 2018) Hearing more and more of this line of reasoning.
2 Critical Retirement Plan Initiatives Moving Forward,” (The 401(k) Specialist, January 21, 2018) It’s about auto portability and missing participants.
Roth IRA conversions: The new tax law changes conversions,” (Financial Planning, January 22, 2018) Roth IRAs go the full Shakespeare (as in “What’s done ‘tis done and can’t be undone”).
Would Americans Balk at Mandated Offering of DC Retirement Plans?” (PLANADVISER, January 24, 2018) Interesting take on this concept in light of “rugged American individualism.”

Fiduciary – Does It Really Matter Anymore?:
Increasingly, it looks like the best way to keep the fiduciary ball rolling is to move the battle away from DC regulators and into the Main Street marketplace.
The Dangers Of SEC-DOL Harmonization,” (Financial Advisor, January 24, 2018) In the best tradition of Star Wars: “It’s a trap!”
DOL Lawsuit Likely Shelved To Give Agency Time For Review,” (Financial Advisor, January 24, 2018) The title says it all.

Fees – Remember the Gas Station Price Wars:
We better be careful on all this talk about fees. A service business cannot be commoditized, yet the focus on fees leads to this perception. It’s always been about the value-added proposition, which implies, you get what you pay for. When it comes to people’s future retirement, a fiduciary can never advise people to sell themselves short. Is that exactly what is being done when we see talk of fees absence a discussion on value-added?
More DC Plan Sponsors Lowered Fees After Reviews in 2017,” (PLANADVISER, January 22, 2018) 40% of the plans that reviewed fees were able to lower them. In addition, the use of revenue sharing dropped.
Small Adjustment Between Fidelity and Vanguard Speaks of Fee Sea Change,” (PLANADVISER, January 23, 2018) This could be interesting.
7 ways plan sponsors can monitor 401k fees,” (Employee Benefit News, January 26, 2018) Some may complain these are superficial recommendations, but, bear in mind, in simplicity there is truth.

Investments – Wolf in Sheep’s Clothing:
This happens every time the market hits new highs (spoiler alert: What goes up must come down). People begin imagining the tree will grow to the sky, and confirmation bias allows them to justify listening to pitches they would normally shun. Don’t be that person.
You’re so vain — I bet you think investing’s about you,” (MarketWatch, January 18, 2018) In praise of balanced portfolios. We’d like to say the author is mimicking Ben Graham (and the arguments are identical), but he’s not. If you know Graham, you’ll quickly spot the different.
Embrace of Passive Funds Is Not What It Appears To Be,” (PLANADVISER, January 22, 2018) While plans have been increasing the number of passive options, plan money has not been flowing to these new options. It could be the ease of target date funds trumps the “Do-It-Yourself” burden of index investing.
Do Target Date Funds Make Sense? Undoubtedly Maybe,” (Forbes, January 23, 2018) The year says 2018 but it reads like 2008.
Two-Thirds of 401k Assets Held in Equities,” (PLANSPONSOR, January 24, 2018) Younger folks are up to 80% and the older crowd sits at around 55%.

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.
Fiduciary Reforms Impact Plan Leakage Trends, Income Decisions,” (PLANADVISER, January 19, 2018)
Will more plan sponsors raise 401k matches?” (BenefitsPRO, January 19, 2018)
Bundled Versus Unbundled DC Plan Arrangements,” (PLANADVISER, January 19, 2018)
401k Default Contribution Rate Hits New High: Study,” (The 401(k) Specialist, January 19, 2018)
Investment Adviser Added as Defendant in NYU 403(b) Suit,” (PLANADVISER, January 22, 2018)
11 changes employers will make to 401k plans in 2018,” (Employee Benefit News, January 23, 2018)
Why Thank Trump for 401k-Match Mania,” (The 401(k) Specialist, January 23, 2018)
Assessing the Retirement Readiness of Each Employee,” (PLANADVISER, January 23, 2018)
4 retirement plan sponsors with pension woes,” (BenefitsPRO, January 23, 2018)
2018 Outlook: Retirement Plan Trends to Watch,” (Wealth Management, January 23, 2018)
Peoples Bank bumps up 401k match,” (Employee Benefit News, January 23, 2018)
10 trends for defined contribution plans: Key findings from Callan’s 2018 DC report,” (BenefitsPRO, January 23, 2018)
Get them addicted to saving – Carosa,” (BenefitsPRO, January 24, 2018)
3 reasons plan sponsors are considering CITs — or should be,” (Employee Benefit Adviser, January 24, 2018)
How to Move 401k Financial Wellness from Idea to Execution,” (The 401(k) Specialist, January 24, 2018)
Norton Healthcare Faces 403(b) Plan Excessive Fee Suit,” (PLANADVISER, January 24, 2018)
How to help employees avoid the ‘average participant’ retirement trap,” (Employee Benefit News, January 24, 2018)
Forced Arbitration Denied in Charles Schwab Self-Dealing ERISA Class Action,” (PLANADVISER, January 24, 2018)
5 ways to keep a retirement plan running smoothly throughout the year,” (Employee Benefit Adviser, January 26, 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.
Millennials will need more than $200,000 to retire: Chris Hogan,” (Fox Business, January 18, 2018)
Warren Buffett is delaying retirement. Here’s how you can, too,” (CNBC, January 18, 2018)
How to Make a Retirement Plan When You Make $30,000 a Year,” (Money, January 20, 2018)
Medical advances require a more aggressive retirement plan,” (USA Today, January 21, 2018)
Can diligent 401k savers go too far?” (MarketWatch, January 22, 2018)
Retirement Risks Keep Rising, and This Is Why,” (Bloomberg, January 22, 2018)
5 employee benefits trends to watch in 2018,” (Employee Benefit News, January 22, 2018)
Delaying retirement by up to 6 months is equivalent to saving an additional 1% over 30 years,” (MarketWatch, January 22, 2018)
The Remarkable Financial Benefits of Delaying Retirement,” (ThinkAdvisor, January 23, 2018)
Delaying Retirement Can Have Remarkable Benefits,” (Financial Advisor, January 23, 2018)
Millennials’ Retirement Prospects Are Challenging,” (PLANADVISER, January 23, 2018)
Will Millennials Have Enough to Retire?” (The 401(k) Specialist, January 23, 2018)
3 Big Money Mistakes to Avoid Once You’re in Retirement,” (Money, January 23, 2018)
Five steps to take five years before you retire,” (MarketWatch, January 23, 2018)
How to Max Out Your Roth IRA in 2018,” (NerdWallet, January 23, 2018)
Stanford Center on Longevity calls this the best retirement strategy,” (CNBC, January 23, 2018)
Millennials have different views about retirement, longevity, finances,” (BenefitsPRO, January 24, 2018)
Will Millennials Be Ready for Retirement? It Doesn’t Look Good,” (ThinkAdvisor, January 24, 2018)
5 Key Moves That Can Help Boost Your 401k Savings,” (Consumer Reports, January 24, 2018)
Avoid these mistakes with inherited IRAs,” (MarketWatch, January 25, 2018)
Americans’ Financial Satisfaction Hits Record High,” (PLANADVISER, January 25, 2018)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: Awesome ‘Sauce’ |
Ary Rosenbaum: A Plan Sponsor’s Guide To Selecting Retirement Plan Providers |
The Rosenbaum Law Firm P.C. Blog: To be safe, read those trust statements |
The Rosenbaum Law Firm P.C. Blog: It just doesn’t look right, avoid sending gifts to plan sponsors | 401k Tort Terror, 401k Boogie Man, Sector Pariah…I will just call him Mr. Schlichter. |
Squared Away Blog: Millennial Retirement ‘Discouraging’ |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #78 |
Squared Away Blog: Just Half of Americans Enjoy Bull Market |
The Rosenbaum Law Firm P.C. Blog: Unbundled Plans Gain Ground |
Ary Rosenbaum: The Most Avoidable Errors Of A 401k Plan Sponsor |
The Rosenbaum Law Firm P.C. Blog: Be careful about giving referrals |

Hot Tips from Popular Web Resources:
The Motley Fool: 4 Ways to Take Money From Your 401k or IRA Without Paying a Penalty |
NAPA Net: Will Hot Markets Stir Participant Trading? |
NAPA Net: Changes to Personal Casualty Loss Deduction Could Affect 401k Hardship Withdrawals |
NAPA Net: Investment Menus Static – For Now |
Morningstar: Should I Invest Part of My Bonus in My 401k? |
The Motley Fool: 3 Hidden Investing Costs You Can’t Afford to Ignore |
Kiplinger: Lower Your Expectations on Pension-Plan Promises |
NAPA Net: 5 Things of Which Plan Fiduciaries Need to Be Aware |
NAPA Net: Do Millennials Really Expect a ‘Free Lunch’ From Their Financial Adviser? |
NAPA Net: SEC Closer to an ERISA Fiduciary Standard? |
NAPA Net: New Excessive Fee Litigators Emerge |
NAPA Net: Arbitration Clause Doesn’t Bar Excessive Fee Suit |
NAPA Net: Fidelity to Implement Surcharge on Vanguard Assets in DC Plans |
NAPA Net: Excessive Fee Claims Rejected in Capital Group Case |
NAPA Net: Graff: Retirement Is Now an ‘A-Level’ Issue |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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