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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/2/18 Trending Topics for ERISA Plan Sponsors: Week Ending 3/2/18
March 05
00:08 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:
What Bagels, Loss Aversion, and Reframing the Company Match Can Show the 401k Fiduciary How to Help Employees Save More Money for Retirement,” (, February 27, 2018) “If it is true the fear of loss motivates people more than the offer of a gain, then the traditional 401k company match framework is designed improperly. Currently, employees are promised a reward for contributing in their 401k plan. Think of this as the carrot urging people to save for their retirement. What if, instead of using a carrot, plan sponsors reframe the ‘match’ in terms of a stick?”

Compliance – Nothing to See Here:

Fiduciary – The Undiscovered Country:
You don’t have to be a Star Trek (or Shakespeare) fan to like this allusion. There is not return once we’ve journeyed to the Undiscovered Country of “fiduciary.”
State Regulator Galvin Is Putting Teeth in DOL Fiduciary Rule,” (ThinkAdvisor, February 26, 2018) But will this result in a mere Pyrrhic victory as the state is going all-in on the DOL’s Rule rather than the lower hang fruit of state law.
Barbara Roper Urges DOL to Crack Down on Fiduciary Rulebreakers,” (ThinkAdvisor, February 27, 2018) Cites Massachusetts’ action as proof violations are occurring.
Some speculating DOL will write new exemption based on SEC rule,” (BenefitsPRO, February 28, 2018) Will the DOL defer to the SEC?
Why employers may need fiduciary liability insurance,” (Employee Benefit News, March 1, 2018) If you’re a plan sponsor, you need to read this.
Under the DOL’s Fiduciary Rule, beware the myths,” (Employee Benefit Adviser, March 1, 2018) This is an exceptional article written by Bruce Ashton and Fred Reish. Definitely worth the read.

Fees – SEC Safari:
In recent weeks, the SEC has made it quite clear it’s going after vendors with obvious conflicts of interest. This has the potential to do more than the DOL or any state can do to remove these fees from burdening retirement savers. This action was a long time coming, but it’s success will depend on the follow-through.
Court Finds Transamerica Not a Fiduciary in Fee Case,” (PLANADVISER, February 26, 2018) This was the second time at the plate for the players in this one and the results were the same. Apparently, you can’t sue someone for charging you more than a competitor when nothing ever stopped you from going to that competitor. Does this mean people have to be responsible for their own decisions? Is this the end of paternalism? The end of “going to an adult” when the bully strikes, rather than taking things into your own hands?
Retirement plan sponsors looking to protect themselves from litigation,” (Employee Benefit Adviser, February 26, 2018) The article says the number of fee cases are on the rise. It doesn’t say if then number of plaintiff victories are also on the rise.
Ameriprise Smacked With SEC Share-Class Violation Fine,” (ThinkAdvisor, February 28, 2018) This action by the SEC appears to have much more teeth and far greater consequences than Massachusetts’ charges against Scottrade. The SEC is dealing with a fee related conflict-of-interest for higher cost class shares where lower cost class shares of the same fund were available. From the reports, it looks like Scottrade was merely engaged in a traditional sales contest.
SEC Fines Ameriprise For Charging $1.8M In Excessive Fund Fees,” (Financial Advisor, February 28, 2018) A few more details…
Wells Fargo Reviewing 401k Rollovers, Incorrect Wealth Fees,” (ThinkAdvisor, March 1, 2018) R’uh, r’oh!
SEC puts financial advisors on notice around high-cost mutual fund shares,” (Financial Planning, February 28, 2018) A leftover from last week that appeared this week.
Wells Fargo Wealth-Management Business Is Said To Face SEC Probe,” (Financial Advisor, March 2, 2018) Is this a step in the right direction or is it simply an arbitrary step?

Investments – Are these Omens Ominous?:
There’s an old adage on Wall Street that states, “If your barber is giving you investment advice, sell.” There’s another way of looking at this. When investors get more concerned about performance than achieving the goals that performance is directed to, then you know we’re approaching a market top.
Stock market losses might be beginning to weigh on retirement patterns,” (BenefitsPRO, February 26, 2018) The operative word here is “might.”
Surging bond yields to pinch homeowners and retirees,” (CNBC, February 26, 2018) Yes, if you didn’t opt for the fixed mortgage in historical low rate era and if you’re relying on bond funds (as opposed to holding bonds through to maturity), but if you’re reading this you probably already know this.
Direct Real Estate Investments in DC Plans,” (Wealth Management, February 27, 2018) It’s been 10 years since the last real estate crash, so it’s the right time to make “If-the-barber-is-telling-me-to-invest-in-this” moves and investing in real estate right before big rate increases sounds perfect. Hint for the interest rate challenged: The general understanding suggests the best time to invest is after the big interest rate increase but before the interest rate increases stop (if you’re going for yield-to-cost). If you’re going for capital gains, the consensus seems to be to buy at peak interest rates. But, hey, who are we to argue with the wisdom of your barber.

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.
HSAs in Retirement Planning,” (PLANADVISER, January/February 2018)
2018 PLANADVISER Micro Plan Survey,” (PLANADVISER, February 5, 2018)
Institutional Investors Had Diversified in Anticipation of Volatility,” (PLANADVISER, February 22, 2018)
A Morbid Approach To Retirement,” (Financial Advisor, February 22, 2018)
HSAs and 401ks: Not an ‘Either/Or’ Discussion,” (The 401(k) Specialist, February 22, 2018)
Accelerating DB Funding an Important Strategy to Discuss,” (PLANADVISER, February 26, 2018)
Employers Bolster 401k Plans: Willis Towers Watson,” (ThinkAdvisor, February 26, 2018)
Plaintiffs Won the Balance of ERISA Class Certification Motions in 2017,” (PLANADVISER, February 26, 2018)
More Employers Report 401k Plan Enhancements,” (The 401(k) Specialist, February 26, 2018)
Sponsors Making Deliberate Enhancements to Retirement Plans,” (PLANADVISER, February 26, 2018)
Retirement Plans Give Workers a Sense of Financial Security,” (PLANADVISER, February 26, 2018)
Auto-enroll, escalation features on rise in 401k plans as employers add enhancements,” (BenefitsPRO, February 27, 2018)
DISRUPTION: Transamerica’s New TPA Requirement Denotes Industry Pressures,” (PLANADVISER, February 27, 2018)
Employers adding 401k auto-enrollment in record numbers,” (Employee Benefit News, February 27,  2018)
Adviser Off the Hook in NYU 403(b) Plans Case,” (PLANADVISER, February 27, 2018)
3 options to transform a company 401k contribution from a lame carrot to an effective stick – Carosa,” (BenefitsPRO, February 28, 2018)
Georgetown University Targeted by Familiar ERISA Breach Allegations,” (PLANADVISER, February 28, 2018)
How plan sponsors can up their fiduciary game,” (Employee Benefit Adviser, March 1, 2018)
A new solution to tackle the old problem of missing 401k plans,” (Employee Benefit News, March 2, 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.
5 Ways to Avoid Paying Taxes on Your Social Security Benefits,” (US News, February 21, 2018)
Retirement may be hazardous to your health,” (MarketWatch, February 22, 2018)
Social Security underpays thousands of widows and widowers,” (CBS News, February 22, 2018)
Are 401k Fees Shrinking Your Retirement Returns? Here’s What You Need To Know,” (Forbes, February 23, 2018)
Left your 401k at an old job? Here’s how to track it down.” (USA Today, February 23, 2018)
5 (Critical) Reasons for Fiduciary Liability Insurance,” (The 401(k) Specialist, February 26, 2018)
Americans Unprepared for Health Care Costs in Retirement,” (PLANADVISER, February 26, 2018)
Reject This Attempt to ‘Regain Retirement Plan Control’,” (The 401(k) Specialist, February 26, 2018)
Millennials Are Saving for the Future, if They Can Afford To,” (The New York Times, February 26, 2018)
Would Your Retirement Plan Hold Up In Court?” (Forbes, February 26, 2018)
What to do if your retirement savings fall short,” (CBS News, February 26, 2018)
Social Security Short-Changed Widows: Inspector General,” (The 401(k) Specialist, February 27, 2018)
Two Thirds of Millennials Have No Retirement Savings,” (PLANADVISER, February 27, 2018)
What Constitutes Termination of an IRA?” (Wealth Management, February 28, 2018)
Social Security Optimization Can Extend Retirement Portfolios by a Decade,” (PLANADVISER, February 28, 2018)

Wisdom from Some of Our Favorite Blogs:
RetirementRevised: Jolt: Stories of trauma and transformation |
Data “Points”: 5 Things Plan Sponsors Should Know Before Hiring an Advisor |
RetirementRevised: How states tax retirement income |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #81 |
ERISA Lawyer Blog: Seventh Circuit Holds That ERISA Does Not Preempt Illinois Slayer Statute, Which Bars Plan Participant’s Killer/Spouse From Receiving A Survivor’s Pension |
The Rosenbaum Law Firm P.C. Blog: Introducing the inaugural That 401k Conference |
The Rosenbaum Law Firm P.C. Blog: Open MEPs will eventually rise again |
Ary Rosenbaum: Trying To Understand A Plan Sponsor’s Irrational Decisions Isn’t Easy |
RetirementRevised: Social Security fumbling on benefit guidance to widows |
Squared Away Blog: Future ‘Retirees’ Plan to Work |
fi360: Don’t Miss National Fiduciary Day on March 22, 2018 |

Hot Tips from Popular Web Resources:
Kiplinger: Roth IRA: Convert Now or Pay Later? |
Morningstar: Should You Make IRA Contributions After 65? |
NAPA Net: Communication, Trust Top Priorities When Targeting Gen X Investors |
NAPA Net: Social Media Becoming Financial Achilles’ Heel for Millennials |
NAPA Net: Researchers: Persistent Low Interest Rates Weigh on 401k Savings |
Morningstar: Tips for Managing Debt in Retirement |
Kiplinger: Passing the Social Security Benefits Earnings Test |
NAPA Net: Institutional Investors Turn to Alts, ESG and Risk Management as Volatility Looms |
NAPA Net: 5 Key Industry Trends You May Have Missed |
NAPA Net: What’s a Reasonable Fee? | 401k Plan Leakage and the Bipartisan Budget Act of 2018 |
Morningstar: How to Get the Most Out of Your IRA Contributions |
NAPA Net: Hoyas Hit with 403(b) University Excessive Fee Suit |
NAPA Net: Case of the Week: Mid-Year Changes to Safe-Harbor 401k Plans |
NAPA Net: More 401k Plans Adding Automatic and Roth Features, Survey Finds |
Morningstar: Don’t Let Pro Rata Rules Trip Up Your Retirement Plan |
The Motley Fool: More Employers Are Offering Roth 401k Plans. Here’s Why You Should Save in One |
Kiplinger: Investors: Don’t Let FOMO Put Your Retirement at Risk |
NAPA Net: SEC Charges BD with Overcharging Retirement Accounts |
NAPA Net: Is the New Fiduciary Rule Enforceable During the Transition Period? |
NAPA Net: How Does HSA Saving Affect 401k Plans? |
NAPA Net: Reader Poll: Most Not Shaken, Much Less Stirred, by Market Volatility |
NAPA Net: February Snaps Streak for Average 401k Balances |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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