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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/23/18 Trending Topics for ERISA Plan Sponsors: Week Ending 3/23/18
March 26
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:
Exclusive Interview: Ary Rosenbaum says Scottrade Still on the Hook Despite 5th Circuit Ruling,” (, March 20, 2018) Prolific ERISA attorney shares his views on the DOL’s Fiduciary Rule and the direction the industry is headed in.

Compliance – A Cauldron of Competing Ideas:
Anyone who says we’re just sitting back and allowing the retirement crisis to happen must be rethinking their position after this week.
Pennsylvania focuses on retirees who cannot afford to retire,” (Employee Benefit Adviser, March 21, 2018) Be careful what you wish for here. Those that live by the state… are at the state’s mercy.
The Retirement Enhancement and Savings Act is back — and it does some good things,” (MarketWatch, March 22, 2018) Yes, this includes the most talked-about MEP legislation.
State-run retirement plans future help retirees maximize Social Security,” (CNBC, March 22. 2018) Yes, but at what price?

Fiduciary – You Don’t Know What You Don’t Know:
Is this the beginning of the end or the end of the beginning? It all depends on which side of the aisle you’re sitting in. But despite all the foreground noise, it’s the background noise that’s most important.
The Fiduciary Standard Has Already Been Set,” (Wealth Management, March 16, 2018) And this has already been said, umpteen times.
Financial Industry Celebrates, Mourns Fiduciary Rule Decision,” (Financial Advisor, March 16, 2018) That’ll certainly tell you what (and whose) side they’re on.
5th Circuit’s bombshell decision on fiduciary rule leaves industry scrambling,” (BenefitsPRO, March 16, 2018) Within days of this article’s publication, the “speculations” it contained became reality.
Confusion Abounds After Fifth Circuit Decision Vacates DOL Fiduciary Rule,” (PLANADVISER, March 16, 2018) But only for those not committed to being a pure unadulterated fiduciary.
Massachusetts’ Galvin Urges Appeal of Court Decision on DOL Rule,” (Wealth Management, March 18, 2018) We don’t need no stinking DOL when we have the State of Massachusetts around!
In Wake Of Court Ruling, DOL Will Cease Enforcing Fiduciary Rule, Source Says,” (Financial Advisor, March 19, 2018) Well, this is merely repeating what the DOL said when they initially issued the rule in 2016. At the time the DOL announced it had no plan to enforce the Rule but would instead rely on the tort bar (they didn’t mention states’ Attorneys General).
Labor Dept shelving enforcement of fiduciary rule after court decision,” (CNBC, March 19, 2018) Good advice here – know who your provider is.
Clayton: SEC Fiduciary Rule on Track Despite DOL Court Defeat,” (ThinkAdvisor, March 19, 2018) And why wouldn’t he? The 5th circuit was all about procedure, not substance. Fix the procedure, keep the substance.
Merrill Chief Reaffirms Support for Beleaguered DOL Rule,” (Financial Advisor IQ, March 19, 2018) Yep, the marketplace is the ultimate regulator.
With fiduciary rule seemingly KO’d, what do firms do now?” (On Wall Street, March 19, 2018) The bottom-line: You don’t know what you don’t know so assume you don’t know and stay the course.
Kitces: The way out of this fiduciary mess,” (On Wall Street, March 19, 2018) Here’s a rerun of the history of fiduciary that’s been published before, but we get Kitces’ unique take on it.
Will SCOTUS Decide the Fate of the DOL Fiduciary Rule?” (PLANADVISER, March 19, 2018) This assumes the DOL is motivated to appeal.
Gibson Dunn: There is no Circuit split over fiduciary rule; decision applies nationwide,” (BenefitsPRO, March 19, 2018) So says the attorney that got the 5th circuit to agree with his argument.
Cue 401k Freak-Out Over Fiduciary Rule Folly,” (The 401(k) Specialist, March 19, 2018) If you don’t subscribe to the Wall Street Journal and didn’t read their take on the 5th circuit’s decision, this is a nice recap.
Circuit Court Fiduciary Rule Decisions Raise Important Process Questions,” (PLANADVISER, May 20, 2018) At least one attorney thinks it isn’t over until the DOL formally declines to appeal and, in any case, this isn’t likely to go to the Supreme Court.
Waiting On A DOL Appeal For Its Fiduciary Rule,” (Financial Advisor, March 20, 2018) Another attorney also things it isn’t over until the DOL formally declines to appeal and, in any case, this is likely to go to the Supreme Court.
The irony of the 5th Circuit decision (and the response it generated) – Carosa,” (BenefitsPRO, March 21, 2018) The marketplace is the ultimate arbiter, not the regulators. And the 5th circuit now allows that.
As DOL Rule is Struck Down, Fears Resurface Over Investor Protection,” (Financial Advisor IQ, March 21, 2018) Once again, there are those who are looking to the SEC to make up the difference. That kind of thinking will all end in tears.
Fiduciary Rule’s Court Setback Isn’t End of Story,” (Financial Advisor IQ, March 21, 2018) Mostly because nobody knows how pervasive this 5th circuit ruling will be.
Industry advised to continue to comply with fiduciary rule amid uncertainty after 5th Circuit ruling,” (BenefitsPRO, March 21, 2018) Pretty consistent advice here.
It’s time advisors and brokers go their separate ways,” (Financial Planning, March 22, 2018) Of all the articles written in the wake of the 5th circuit decision, this one by fan favorite Knut Rostad hits the nail on the head. It’s a must read!
DOL Fiduciary Rule Advocates Considering Another Court Fight,” (Forbes, March 22, 2018) With or without the DOL, interested parties may fight on. Could we be seeing a repeat of the Defense of Marriage Act scenario?
Scalia: DOL Fiduciary Rule Will Be Obliterated,” (ThinkAdvisor, March 23, 2018) Well, that is his job, isn’t it?
RIP fiduciary rule? Not so fast.” (Employee Benefit News, March 23, 2018) Because the horse is already out of the barn.

Fees – Not the Priority:
The DOL has long advised against making a decision based solely on fees. This will become more apparent when you read the next section.
What If Your Fee Focus Is Hurting Your 401k Plan?” (Forbes, Mach 20, 2018) There’s a lot more to life – and 401k plans – than fees.

Investments – The Market Squeeze:
Blame it on China, blame it on a bloated budget bill, what ever you blame it on, it’s happening. And all those “inexpensive” index funds that “charge” only basis points are now costing investors full percentage points. Sometimes you get what you pay for.
Will Your Target-Date 401k Fund Blow Up Your Retirement?” (Forbes, March 19, 2018) The assumption is a heavy weighting in equities might be bad for retirees. That’s only true if the retiree is fully invested in equities (that includes all mutual funds, including bond funds and target date funs).
Challenges Facing Passive Investing,” (Wealth Management, March 20, 2018) There’s always been a systemic theoretical problem with index investing at some unknown threshold as we approach the boundary condition.
The Damage Done by Short-Term 401k Trading,” (The 401(k) Specialist, March 20, 2018) The idea here is not to look at short-term performance. Easier said than done when the SEC requires all mutual funds to do precisely that.
Nearly Three-Quarters of Americans Value Guaranteed Income,” (PLANADVISER, March 21, 2018) This may sound like good news for the insurance companies but it’s not. The same survey says, while people like guaranteed income, they don’t like annuities as the vehicle to deliver it.
Institutional Investors Increasing Exposure to Focused Strategies,” (PLANADVISER, March 21, 2018) Meaning, they’re moving away from index funds. A “focus” fund is one with 50 or fewer holdings. Studies suggest you only need 35 holdings to be considered “diversified” (where “diversified” means capturing the same level of industry diversification as an index fund).
Why 60/40 Portfolios Are Downright Dangerous Today,” (Financial Advisor, March 22, 2018) Where they ever?

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.
The Cloud Hovering Over 401k Automatic Enrollment,” (The 401(k) Specialist, March 15, 2018)
Addressing DC Plan Participant Behaviors With Predictive Analytics,” (PLANADVISER, March 16, 2018)
Need to find lost retirement plan participants? Check your recordkeeper,” (BenefitsPRO, March 16, 2018)
Broad-Based Financial Education Found to Be Ineffective,” (PLANADVISER, March 16, 2018)
What the new fiduciary appeals ruling means for employers,” (Employee Benefit Adviser, March 18, 2018)
Pairing retirement with health benefits for a one-two punch,” (Employee Benefit Adviser, March 18, 2018)
The Battle Over Automatic Retirement Plan Enrollment,” (Wealth Management, March 20, 2018)
One State’s Experience With Auto-Enrollment,” (The 401(k) Specialist, March 19, 2018)
Court Denies Filing of New Complaint Against Voya Over Advice Services,” (PLANADVISER, March 20, 2018)
401k best practices: employee education,” (Employee Benefit News, March 21, 2018)
Morningstar and Prudential Win RICO Suit Dismissal,” (PLANADVISER, March 21 2018)
Traditional Retirement Planning Is Dangerous And Misleading,” (Financial Advisor, March 22, 2018)
District Court Dismisses ERISA Lawsuit Targeting Aon Hewitt, Financial Engines,” (PLANADVISER, March 22, 2018)
Personal Touch Matters in 3(38) Fiduciary Marketplace,” (PLANADVISER, March 22, 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.
Sallie Krawcheck: How Much You Should Save at Every Age,” (Money, February 20, 2018)
Declutter Your Retirement Savings: What To Do With Your Old 401ks And IRAs,” (Forbes, February 20, 2018)
Most Americans close to retirement have saved 12% of what they need,” (CNBC, March 19, 2018)
Millennials: Serious 401k Savers or Struggling Spendthrifts?” (The 401(k) Specialist, March 19, 2018)
No retirement savings? Thinking you’ll just work longer? Think again,” (The Washington Post, March 19, 2018)
How Many 401k Savers Are Using Roth Options?” (The 401(k) Specialist, March 19, 2018)
RMD tax strategies for financial advisors,” (Financial Planning, March 20, 2018)
You can still cut your 2017 tax with these retirement accounts,” (CBS News, March 21, 2018)
The Simplest, Most Successful Way to Save for Retirement,” (Money, March 23, 2018)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: ‘Missing’ Inaction |
Ary Rosenbaum: M&A, 401k & The Plan Sponsor: What You Need To Know |
Nerd’s Eye View: How The Financial Product Distribution Industry Beat DOL Fiduciary |
Business of Benefits: The IRS Has a 403(b) MEP Problem |
The Rosenbaum Law Firm P.C. Blog: Another Vantage Case, South Carolina style |
The Rosenbaum Law Firm P.C. Blog: Fifth Circuit decision doesn’t bury Fiduciary Rule |
The Rosenbaum Law Firm P.C. Blog: One metric about financial advisors that you should consider |
The Rosenbaum Law Firm P.C. Blog: Stop thinking of TPAs as just a price placeholder |
Nerd’s Eye View: Why Clients Often Split Investments Across Multiple Advisors |
fi360: Best practices for fund replacements to keep you in compliance |

Hot Tips from Popular Web Resources:
NAPA Net: DOL Puts Fiduciary Rule Enforcement on Hold |
NAPA Net: The Fiduciary Rule – Now What? |
NAPA Net: RESA Rises in House |
NAPA Net: 401k Costs and Mutual Fund Expense Ratios Continue Downward Trend |
NAPA Net: 401k Stakeholder Priorities Not Always in Tune |
NAPA Net: ‘End’ Adequate? Are We Getting an Accurate Read on Retirement Readiness? |
NAPA Net: Can Automation Help Solve the Missing Participant Problem? |
NAPA Net: Debt Could Dog Boomer Retirements |
The Motley Fool: 5 Problems With Retiring in Your 50s |
NAPA Net: Robo RICO Suit Dismissed |
NAPA Net: Do You Work with Non-Qualified Plans? |
NAPA Net: Volatility Cast a Big Shadow in February |
NAPA Net: Washington State Launches Retirement Marketplace |
The Motley Fool: Pros and Cons of Taking Social Security at 70 |
Morningstar: How to Extract Income from a Retirement Portfolio |
NAPA Net: Robo Arrangement Wins Again on Fiduciary Challenge |
NAPA Net: Maryland Takes a Step Back on Fiduciary Rule |
NAPA Net: Half of Americans Still Don’t Grasp Benefits of HSAs |
NAPA Net: 50 Years from Now, What Will Life Be Like for Millennials? |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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