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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 3/16/18 Trending Topics for ERISA Plan Sponsors: Week Ending 3/16/18
March 19
00:04 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:
Much Ado About Nothing Saved for Retirement? Why Social Security Alone May Be Enough,” (, March 13, 2018) “In the final analysis, though many Americans would find it difficult or impossible to be happy with their retirement income being limited to Social Security, a sizable group of other Americans can and do live their retirement with Social Security as their sole income source.”

Compliance – Lotsa Talk of New Stuff:
Looks like a lot of folks think they know what the magic bullet is. It might be time to take a deep breath and keep things simple.
Big Ideas – Has the Time Arrived for a New Wave of Retirement Reforms?” (PLANADVISER, January/February 2018) Are we headed towards a new PPA?
IRS Issues Guidance Regarding 403(b) Plan RMDs and Missing Participants,” (PLANADVISER, March 12, 2018) Here’s what they’re telling examiners.
GAO to Labor: Give employers clarity on separated 401k accounts,” (BenefitsPRO, March 13, 2018) Yep, like maybe we need a place for them to go.
Tax Reform’s Implications for Retirement Plans,” (Wealth Management, March 14, 2018) Good run down of the highlights.
Pennsylvania focuses on retirees who cannot afford to retire,” (Employee Benefit News, March 14, 2018) Read this. Absorb every word. Your first impression might be that this is the face of socialism, but try to avoid that. Instead, look at it like a financial analyst would. What you see is the repercussions of a government that assumes all the liability and fails to realize there is no reliable asset side on this ledger.

Fiduciary – We All Knew This Was Coming:
The press spilled a lot of ink on the 5th Circuit’s decision, but what does it mean in the grand scheme? Well, probably not much, because the scheme has been exposed.
The Duty of Loyalty,” (PLANADVISER, January/February 2018) Marcia Wagner explains what ERISA states and how the courts have interpreted it.
Wells Fargo Advisors SEC Filing Hints at Federal Fiduciary Investigation,” (PLANADVISER, March 9, 2018) The filing alludes to the possibility of “inappropriate referrals of recommendations with respect to rollovers for 401k plan participants.”
Most CFPs are brokers. Fiduciary advocates say that’s a problem,” (Financial Planning, March 9, 2018) A recent survey shows only 15% of CFPs are fee-only. The rest get some form of commission as compensation. When you’re in a regulatory environment that is moving towards declaring conflict-of-interest fees like commissions a breach of fiduciary duty, it’s tough for CFPs to market themselves as advisers when the vast bulk of their members rely on conflict-of-interest fees.
DOL Wins Fiduciary Challenge in Federal Court,” (ThinkAdvisor, March 13, 2018) Apparently, the DOL did not “arbitrarily treat fixed-indexed annuities differently from fixed annuities.” This sounds like a weak argument from the get-go.
Appeals Court Upholds DOL Rule, But Battle Continues,” (Financial Advisor, March 14, 2018) Same story, different take.
Fiduciary rule survives another court challenge, but victory may be hollow,” (On Wall Street, March 14, 2018) Here’s a take that appears to be saying there’s a possibility this court ruling may be nullified in the future.
Where is the 5th Circuit’s decision on Labor’s fiduciary rule?” (BenefitsPRO, March 14, 2018) Given the next entry, is this an amazing coincidence or what?
5th Circuit Court of Appeals kills fiduciary rule,” (BenefitsPRO, March 15, 2018) Well that was fun while it lasted.
DOL Fiduciary Rule Struck Down by Appeals Court,” (ThinkAdvisor, March 15, 2018) It ain’t over ‘til it’s over. There’s another court case pending, and the DOL may (or may not) decide to appeal this decision.
Fiduciary rule, RIP? Fate looks dim after court overturns regulation,” (Financial Planning, March 15, 2018) And the action looks to be shifting to the SEC…
SEC Fiduciary Rule Likely to Address Broker, Advisor Titles: Peirce,” (ThinkAdvisor, March 15, 2018) It’s about time.
Court of Appeals Vacates DOL Fiduciary Rule,” (Wealth Management, March 16, 2018) More on the story.
Financial Industry Celebrates, Mourns Fiduciary Rule Decision,” (Financial Advisor, March 16, 2018) It’s the morning after and this is what everyone has to say.
Fate of DOL Fiduciary Rule in Question After Court Ruling,” (ThinkAdvisor, March 16, 2018) There are many moves left in this game, including that of the DOL itself.
Fiduciary rule’s next stop: Supreme Court?” (Financial Planning, March 16, 2017) Maybe, maybe not.
What the new fiduciary appeals ruling means for employers,” (Employee Benefit News, March 16, 2017) You can’t stuff the genie back in the bottle. Closing the barn doors won’t bring the horses back after they’ve left. And you can’t reverse the trend towards fiduciary that’s already started.

Fees – “At Absolutely No Cost to You!”:
Yeah, who ever believes that? Trouble is, too many people do.
Those index funds in your 401k could cost you,” (CNBC, March 12, 2018) Depending on the service provider, those “low-cost” index funds offered in your 401k may not be as low cost as you think.
Can AI relieve cost pressures on retirement plans?” (Financial Planning, March 14, 2018) There’s a four word answer to this: “Open the podbay door, HAL.”

Investments – Time to Call It:
The tide has apparently turned. We saw hints of this in the February correction, but the last several weeks seem to confirm we seen a reversal from growth (and passive) to value (and active). Not that anyone is keeping score anymore. Maybe they should.
Allocate your retirement portfolio in 3 easy steps,” (MarketWatch, March 11, 2018) Start with domestic equities, then add any international component you wish to add, then consider how much you want in fixed income.
401k investors: How to invest late in a bull market,” (USA Today, March 12, 2018) Could this be the mainstream media equivalent of “getting investment advice from your barber”? Take a look at the recommendations. See if you can spot the conflicting advice. Then remember: this is what the average worker is reading.
Measuring Managed Account Performance Is Part Art, Part Science,” (PLANADVISER, March 13, 2018) Performance is a tricky thing to measure, even when it’s measured correctly.
Corporate pension plans could become fully funded once the 10-year yield rises above this level,” (MarketWatch, March 14, 2018) According to the article, that level is 3%. What a different a little inflation can make.
Growth and Value Stock Indexing Are Both Broken: Nicholas Colas,” (ThinkAdvisor, March 14, 2018) This title is a bit misleading. “Growth” and “value” represent disciplines for individual stock picking, not algorithms for creating index funds. The issue is really that no two portfolio managers agree on the quantitative definition for either style. Rather, while both inform real numbers (fundamental accounting data for value and technical statistics for growth), they each require more of a qualitative analysis. If you want an index fund, buy an index fund that doesn’t incorporate stylistic schemes. If you want individual stocks (including portfolios within a mutual fund), then you better understand which of these two styles the portfolio manager operates under. Either style is good – as long as you stick to you. Once you start switching styles, you suffer the same fate of all market timers.
Three Things You Need To Know Before Buying Bitcoins With An IRA,” (Forbes, March 14, 2018) Maybe only one thing: “Tulips.”

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.
Plan Sponsors Fail to Find 25 Million 401k Accounts,” (The 401(k) Specialist, March 7, 2018)
All Auto Everything—Shlomo Benartzi on 401ks in the Digital Age,” (The 401(k) Specialist, March 12, 2018)
HSA Knowledge Gap Offers Clear Adviser Service Role,” (PLANADVISER, March 13, 2018)
401k Target Date Assets on the Up and Up,” (The 401(k) Specialist, March 14, 2018)
Behavioral enrollment, part 2: Influence,” (BenefitsPRO, March 14, 2018)
401k Stakeholders Aren’t In Sync,” (The 401(k) Specialist, March 14, 2018)
SunTrust Agrees to Settle Stock Drop Suit for $4.75 Million,” (PLANADVISER, March 14, 2018)
More 401k Fraud Fallout Amid Vantage Allegations,” (The 401(k) Specialist, March 14, 2018)
Stakeholders in DC Plan Industry Must Come Together for Plan Success,” (PLANADVISER, March 14, 2018)
How Bad is the 401k ‘Missing Participant’ Problem?” (The 401(k) Specialist, March 14, 2018)
9 ways plan sponsors can up their fiduciary game,” (Employee Benefit News, March 15, 2018)
Report Reveals Savings Strategies and Products Needed,” (PLANADVISER, March 15, 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.
How Tech Can Make Retirement Harder For Couples,” (Forbes, March 8, 2018)
Health Care Is Second-Largest Retirement Expense, but Americans Aren’t Prepared: RBC,” (ThinkAdvisor, March 8 2018)
Creating a millennial roadmap for retirement,” (Employee Benefit Adviser, March 9, 2018)
5 Inherited IRA Mistakes That Will Destroy Your Inheritance,” (Forbes, March 12, 2018)
At retirement, should you roll your 401k into your IRA? Think about these factors,” (Los Angeles Times, March 12, 2018)
It’s high time Gen X takes retirement seriously,” (CNBC, March 12, 2018)
Hurry, Tax Law Cracks Window for Roth IRA Rate Gains,” (ThinkAdvisor, March 13, 2018)
It will cost you if you fail to take out retirement cash by this deadline,” (CNBC, March 13, 2018)
What You Need To Know Before Establishing A Roth IRA For Your Kids,” (Forbes, March 13, 2018)
Believe it or not, some people survive fine on just Social Security – Carosa,” (BenefitsPRO, March 14, 2018)
Worst States to Retire in the U.S.,” (TheStreet, March 14, 2018)
How to retire by 40: 3 proven tips from someone who has,” (CNN, March 14, 2018)
Few Americans Saving HSA Assets for Retirement,” (ThinkAdvisor, March 15, 2018)
Millennials Doubt Happy Retirement Will Exist,” (PLANADVISER, March 15, 2018)
5 ways to avoid becoming a failed retiree,” (MarketWatch, March 15, 2018)

Wisdom from Some of Our Favorite Blogs:
The Rosenbaum Law Firm P.C. Blog: Beware of those plan document restatement requests |
The Rosenbaum Law Firm P.C. Blog: Plan Sponsors have to Keep Track of All Plan Amendments |
Ary Rosenbaum: Why Your 401k Plan Should Get a Tune-Up |
Data “Points”: ‘False’ Start? |
The Rosenbaum Law Firm P.C. Blog: Another Vantage lawsuit with an advisor twist |
The Rosenbaum Law Firm P.C. Blog: Don’t be cheap when it comes to your retirement plan |
Squared Away Blog: Dreams of Retirement? Watch for Pitfalls |
ERISA Lawyer Blog: Ninth Circuit Holds That A Plan Service Provider Is Not An ERISA Fiduciary With Respect To Its Compensation |
The Rosenbaum Law Firm P.C. Blog: Vantage defaults in first case decision |
The Rosenbaum Law Firm P.C. Blog: Auto Enrollment is going up |
The Rosenbaum Law Firm P.C. Blog: Why would you be affiliated with that? |
Squared Away Blog: Boomers are Longing to Retire Overseas |
Proskauer’s: Tenth Circuit Upholds DOL’s Authority to Impose New Conditions for PTEs and Leaves Door Open for Changes to #Fiduciary Rule |
RetirementRevised: How about some bitcoin with that IRA? |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #83 |
Proskauer’s: Fifth Circuit Vacates DOL Fiduciary Rule |
fi360: Fi360 Urges DOL and SEC to Come Together on Fiduciary Rule |

Hot Tips from Popular Web Resources:
NAPA Net: First Judgment Handed Down in Vantage Benefits Suits |
NAPA Net: TDFs as a Decumulation Solution? |
NAPA Net: Report Finds DC Plan Performance Catching up to DB Plans |
Morningstar: Can Retirement Plan Benefits Be Transferred After the Owner’s Death? |
The Motley Fool: 6 Reasons Claiming Social Security at Age 70 May Be a Mistake |
NAPA Net: Cali’s Secure Choice Rebrands, Fast-Tracks for Launch |
NAPA Net: ‘Missing’ Inaction |
NAPA Net: Undisclosed 12b-1 Fees: DOL Versus SEC |
NAPA Net: Retirement Standard of Living: Work Longer or Save More? |
Morningstar: How Has the Bucket Strategy Performed? |
Kiplinger: Lottery Winnings’ Impact on Social Security |
NAPA Net: Fiduciary Rule Notches Another Win in Court |
NAPA Net: Case of the Week: Form 5500 Compliance Questions |
NAPA Net: What’s a Plan Sponsor to Do About Missing Participants? |
NAPA Net: Parties Propose $4.75 Million Settlement in Stock Drop Suit |
The Motley Fool: How Big Will My Social Security Disability Benefit Be? |
Kiplinger: How Much Can You Contribute to a Roth IRA for 2017? |
NAPA Net: What’s Driving Record M&A Activity in the RIA Industry? |
NAPA Net: FAs Shifting to a More Client-centric Model |
NAPA Net: IRS Digs in on New VCP Fee Structure |
Kiplinger: Real-Life Lessons for a Dream Retirement |
The Motley Fool: Why Don’t More People Wait to Claim Social Security at 70? |
NAPA Net: 5th Circuit Short Circuits Fiduciary Rule |
NAPA Net: Déjà vu All Over Again in Voya Fiduciary Suit |
The Motley Fool: 20% of Americans Aren’t Saving a Penny |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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