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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 2/2/18 Trending Topics for ERISA Plan Sponsors: Week Ending 2/2/18
February 05
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:
5 Most Important Financial Concepts a Fiduciary Must Teach,” (, January 30, 2018) It’s in everyone’s best interest to be successful, so it’s part of a fiduciary’s duty to show them how.

Compliance – Problems, Problems:
Look, if we can only stop thinking about the way things were done in the past, then we can start thinking about the ways things will be done in the future.
Alicia Munnell: The Social Security Fix No One Wants,” (ThinkAdvisor, January 30, 2018) She wants to raise taxes. This, in turn, raises a question: Is Social Security worth saving?
Trump cites 401k gains in speech, yet most workers don’t have one,” (CNBC, January 31, 2018) All the more reason to get that MEP legislation passed.
EBSA Restores $1.1B to Benefit Plans, Participants and Beneficiaries,” (PLANADVISER, February 1, 2018) This is the cost of non-compliance.
As Super Bowl approaches, NFL pension plan still underfunded,” (BenefitsPRO, February, 1, 2018) This, as they say in the biz, is known as “piling on.”

Fiduciary – Cat Fight! Cat Fight!:
When stray cats meet in the alley, beware! Marquess of Queensberry Rules need not apply.
Path to SEC Fiduciary Rule Strewn With Bumps,” (ThinkAdvisor, January 29, 2018) With everyone throwing their hat in the regulatory ring, are we headed to a “too many chefs spoil the broth” scenario?
Advisors, brokers slacking on compliance under fiduciary rule,” (BenefitsPRO, January 30, 2018) So says Drinker Biddle. But their focus appears to be solely on fees. Is that in the best interest of the rollover prospect? Many have made that case that, in general, it’s almost never in your best interest to leave your retirement assets at your former employer. The biggest reason is control. Once the assets are rolled over, the owner has complete control. That has to be worth at least a few basis points.
Regulatory fights brewing, CEOs issue call to arms,” (Financial Planning, January 31, 2018) Looks like halftime is over and we’re ready to kick off the third stanza. Fasten your seatbelts, fans.
You’re not just a fiduciary, you’re a mentor – Carosa,” (BenefitsPRO, January 31, 2018) It’s not just about the money. The role of fiduciary involves many things if you’re truly following your duty to act in the best interests of the beneficiary.

Fees – Speaking of Cat Fights…:
This one promises to open a whole new can of worms. Fiduciary fans should be most excited.
Fidelity, Vanguard fee arrangement causes stir in the 401k industry,” (Employee Benefit News, January 29, 2018) This raises a whole host of issues. For example, under what circumstances could a custodian for individual securities decide to charge a fee for all the shares of IBM you hold, but not charge a fee for any GE shares that you hold? See the problem with what Fidelity is doing? And for Fidelity to say the fee is for “administrative services,” that just doesn’t make sense. The custodian charges the owner of the portfolio for administrative services, not the underlying security. The only case where the underlying custodian charges an add-on fee for a specific security occurs when that security is physically held or otherwise not available on an electronic delivery system (i.e., DTC for stocks and DTCC for mutual funds).
Lower fees may not mean added retirement savings,” (Financial Planning, January 31, 2018) Saving 1% on fees might save you $40,000, but it also might cost you $340,000. It’s not about fees. It’s about value.

Investments – Relearning Old Lessons:
Time to break out that dusty text book from years past. We’re about to relearn the difference (and similarities) between stocks and bonds.
Is now the right time to rebalance your retirement investments?” (MarketWatch, January 26, 2018) If you don’t – or don’t like – what “technical analysis” is, then the bulk of this article isn’t for you.
Rising Rates Bring Bond Duration and Supply Questions to the Fore,” (PLANADVISER, February 1, 2018) It’s been a long time since bond rates have been attractive. Given this, rising rates may be enticing, but let’s not forget what happens to bond prices when rates rise.

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.
Self-Dealing Lawsuit Targeting Capital Group Routed in District Court,” (PLANADVISER, January 26, 2018)
Big Boost to 401k Plans from Tax Cuts,” (The 401(k) Specialist, January 26, 2017)
Tax Reform Is Leading Some Plan Sponsors to Enhance Benefits,” (PLANADVISER, January 26, 2018)
Peoples Bank bumps up 401k match,” (Employee Benefit Adviser, January 28, 2018)
Tax cut spurs employers to boost 401k contributions,” (Employee Benefit News, January 28, 2018)
DC plan drawbacks that endanger worker retirements,” (BenefitsPRO, January 29, 2018)
Court Denies Franklin Templeton’s Petition to Appeal Class Certification,” (PLANADVISER, January 29, 2018)
3 ways employers can make their retirement plan more attractive in 2018,” (Employee Benefit News, January 30, 2018)
Mutual of Omaha Faces Self-Dealing Suit,” (PLANADVISOR, January 30, 2018)
Honeywell, FedEx add to list of sponsors bolstering retirement plans after tax reform,” (BenefitsPRO, January 30, 2018)
Supreme Court Asked If Two Complaints Can Be Filed Regarding Claim for Benefits,” (PLANADVISER, January 30, 2018)
Prepare DB Clients for Lower Equity Returns,” (PLANADVISER, January 31, 2018)
Court Grants Class Certification in Oracle 401k Excessive Fee Suit,” (PLANADVISER, February 1, 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.
Workers should lower pension expectations, make Plan B,” (BenefitsPRO, January 26, 2018)
Pete the Planner: Too much in retirement savings? Not possible,” (USA Today, January 27, 2018)
Hold tight or splurge? Booming retirement accounts are making that a tough question,” (The Washington Post, January 27, 2018)
Nearly One in Seven Expects to Continue Working or Never Retire,” (PLANADVISER, January 29, 2018)
New guidelines for young retirement savers,” (CBS News, January 29, 2018)
3 ways employers can make their retirement plan more attractive in 2018,” (Employee Benefit News, January 30, 2018)
Retirement Savers Taking Better Care Of Their Nest Eggs, Survey Says,” (Financial Advisor, January 31, 2018)
The No. 1 Misconception About Retirement Spending,” (ThinkAdvisor, January 31, 2018)
Americans on Target to Have 80% of the Income They Will Need in Retirement,” (PLANADVISER, January 31, 2018)
Addressing generational retirement challenges,” (Employee Benefit Adviser, January 31, 2018)
Stages of financial life different for millennials,” (BenefitsPRO, January 31, 2018)
‘4 Percent Rule’ Can Lead To Disaster For Some Clients, Advisor Says,” (Financial Advisor, February 1, 2018)
The big mistake investors make once they hit that first $1 million,” (MarketWatch, February 2, 2018)

Wisdom from Some of Our Favorite Blogs:
The Rosenbaum Law Firm P.C. Blog: Complacency can kill your business |
The Rosenbaum Law Firm P.C. Blog: The problem of being passive-aggressive with employee |
RetirementRevised: Social Security online accounts: safe from identity theft? |
The Rosenbaum Law Firm P.C. Blog: Fidelity charging for Vanguard assets, why so surprised? |
RetirementRevised: Debate on safety of reverse mortgages for seniors heats up |
Ary Rosenbaum: A Call For A New Standard For Financial Advisors |
Data “Points”: Are Stocks Swayed by the Super Bowl? |
Scholarly Financial Planner: Why Insurance Companies and Wall Street Should Not Be Permitted to Redefine the Term “Best Interests” |

Hot Tips from Popular Web Resources:
NAPA Net: Tax Reform Triggers Boosts in Benefits |
NAPA Net: Opt-Outs Running High in OregonSaves Program |
NAPA Net: Have 1 in 6 Millennials Really Saved More Than $100,000? |
Morningstar: A Moderate Retirement Saver Portfolio |
Morningstar: A Conservative Retirement Saver Portfolio for ETF Investors |
NAPA Net: (Another) Participant Files Suit Against (Another) Provider |
NAPA Net: Why the Match Matters – to Employers |
NAPA Net: Must Advisors Recommend the Lowest-Cost Investment? |
The Motley Fool: 5 Things to Consider Before Tapping Your Retirement Accounts |
Morningstar: How Retirees Are Taxed |
NAPA Net: Empire State Seeks to Extend ‘Best Interest’ Standard |
NAPA Net: Case of the Week: ERISA Budget Account and Participant Education |
NAPA Net: EBSA Enforcement Action Robust in FY 2017 |
NAPA Net: Chasing After Health Savings Accounts? |
NAPA Net: ARA Pushes Back on IRS’ New Approach to VCP User Fees |
NAPA Net: Average 401k Balance Still ‘Hot’ in January |
Kiplinger: How to Take Control of Your Retirement |
The Motley Fool: The Shocking Cost of Putting Off Retirement Saving for a Year |
NAPA Net: Survey: Advisor Relationship Improves Retirement Readiness |
NAPA Net: How Much Do 401k Participants Know About Their Plan Fees? |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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