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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/9/18 Trending Topics for ERISA Plan Sponsors: Week Ending 3/9/18
March 12
00:02 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:
The Shocking Truth of Supply and Demand in the Markets and the Retirement Saver’s Best Interest,” (, March 6, 2018) “Retirement savers must maintain long-term orientation regarding their assets. Supply and demand shock and generally easy to identify and often temporary in nature. These shocks often bring out the worst in decision making for investors. Astute investors will want to recognize this for what it’s worth: the opportunity to stand athwart the crowds in the market and purchase at cut-rate prices.”

Compliance – They’re MIA Because They Didn’t Roll Over into an IRA:
Orphan accounts in 401k plans is a problem for both the plan sponsor and the owner of the account. Maybe it would be better if the employee is required to roll the money over into an IRA if he leaves the firm.
DOL cracks down on efforts to find missing retirement plan participants,” (BenefitsPRO, March 5, 2018) Perhaps the DOL is finally getting wise to the fact that it may not be in the best interests of former employees to leave their money in their old company’s retirement plan. Too many bad things can happen – for both the former employee and the former employer.
PBGC Proposes Certain Amendments to Rules for Terminated DB Plans,” (PLANADVISER, March 5, 2018) Applies primarily to plan participants with an ownership interest in the plan sponsor.
Retirement policy wonks pitch new pre-Social Security accounts,” (BenefitsPRO, March 6, 2018) This is for people who have to retire early.

Fiduciary – The Complexities of Being a Fiduciary:
No one said it was easy. There are simply too many moving parts. And when you try to get fancy, well, that’s when the bad stuff usually happens.
DOL Announces Fiduciary Responsibilities Seminar in Louisiana,” (PLANADVISER, March 5, 2018) Mark it in your calendar.
How to help retirement savers buy anything better, from groceries to stocks – Carosa,” (BenefitsPRO, March 7, 2018) ‘member how fiduciaries used to be? Before they all got measured by fee alone? This article throws you back to that time and reminds every fiduciary of their fundamental duty (hint: It’s not addressed in the DOL’s “Fiduciary” Rule).
Wells Fargo: ‘Where there’s smoke, there’s fire,’ regulator says,” (Financial Planning, March 8, 2018) All transition phases create turbulence. Be wary of being caught up in that turbulence.

Fees – One Man’s Bargain is Another Man’s Rip-Off:
This is the trouble with subjectivity. There’s no right answer. Strike that. There is a right answer. And it’s usually found at the end of the barrel of a high-priced attorney.
Watch What You Charge, With Or Without The Fiduciary Rule,” (Financial Advisor, March 7, 2018) Regardless of the headline, this is about “reasonable” compensation.

Investments – A Whole Lotta “Behavior” Goin’ On:
There may still be some upside to be squeezed out, but the way the tea leaves are reading, it looks like a lot of folks are beginning to stretch for alpha. We all know the past can never predict the future, but we also all know what has happened in the past.
Stock market volatility causes decline in client risk tolerance,” (Financial Planning, March 2, 2018) Thus proving once again why “risk tolerance” is meaningless. Seriously, the time is growing close when some fancy pants tort attorney will frame its use as malpractice.
Differences Shrink Between DC and DB Plan Returns,” (The 401(k) Specialist, March 2, 2018) DC plans are finally catching up to DB plans. Could it be all those TDFs are institutionalizing portfolio management in the previously employee-directed 401k plans? Either way, it’s good news for employees.
Can Bonds Still Protect Your Stock Portfolio?” (Forbes, March 3, 2018) There’s an old saying that goes like this: “If you gotta ask, you can’t afford it.” If you’re asking this question about bonds, in the part of the interest rate cycle we’re in right now, you can’t afford to place them in your portfolio.
Using bitcoin in your IRA may be a bad idea,” (CNBC, March 5, 2018) Ya think?
Why annuities are a bad idea for almost everyone,” (MarketWatch, March 5, 2018) The article explains much more, but it includes this tidbit: Once the DOL required annuity sales reps to work only within the best interest of the section, annuity sales dropped off the cliff.
Strong market returns bolster participants’ faith in 401k plans,” (BenefitsPRO, March 7, 2018) When things go up, everybody’s happy. It still doesn’t mean they’re doing the right thing. It just means they’re happy about it.

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.
Who Has the Biggest and Best 401k Plan in America?” (The 401(k) Specialist, February 28, 2018)
A Mere 16% of Fortune 500 Companies Offer a DB Plan,” (PLANADVISER, March 2, 2018)
Parsing procrastination on auto-enrollment default rates,” (BenefitsPRO, March 2, 2018)
A new solution to tackle the old problem of missing 401k participants,” (Employee Benefit News, March 2, 2018)
What to do About Small and Missing 401k Accounts,” (The 401(k) Specialist, March 5, 2018)
DC Plans Slowly Close Pension Performance Advantage,” (PLANADVISER, March 5, 2018)
401k Sponsors Worry While Participants Breathe Easy,” (Financial Advisor, March 6, 2018)
As Participant Sentiments Improve, Sponsor Decumulation Concerns Increase,” (PLANADVISER, March 6, 2018)
401k best practices: plan design,” (Employee Benefit News, March 6, 2018)
The One Thing You Must Do as a 401k Plan Advisor,” (The 401(k) Specialist, March 6, 2018)
Advisor Allegedly Steered Client to 401k Fraudster,” (Financial Times, March 7, 2018)
Participants Need More Than Savings Plan for Retirement Success,” (PLANADVISER, March 7, 2018)
Court Finds Pension Trustee Guilty of Embezzlement,” (PLANADVISER, March 8, 2018)
BlackRock DC Pulse Survey Data Points of Interest,” (PLANADVISER, March 8, 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.
When Adult Children Wreck Parents’ Retirement,” (Financial Advisor, March 2018)
Make the most of employer 401k improvements,” (CNBC, March 1, 2018)
Non-Mortgage Debt Derails Retirement Savings for Many,” (PLANADVISER, March 2, 2018)
How to fortify your retirement against a financial shock,” (CBS News, March 2, 2018)
‘How’s your 401k doing?’ It’s a good question to ask right now,” (CNBC, March 2, 2018)
Your Social Security Check Might Be Smaller Than You Expect,” (Fox Business, March 4, 2018)
Can You Get Tax-Free Funds From Your IRA And 401k?” (Forbes, March 5, 2018)
Here’s how to use that extra cash in your paycheck from the tax bill,” (Forbes, March 5, 2018)
Overcoming the millennial retirement challenge,” (Employee Benefit Adviser, March 6, 2018)
42% of Americans are at risk of retiring broke,” (CNBC, March 6, 2017)
Negative Tax Consequences Often Result from Poor Rollover Knowledge,” (PLANADVISER, March 7, 2018)
Overcoming the millennial retirement challenge,” (Employee Benefit News, March 7, 2018)
Do You Need a Do-Over on Your Roth Conversion?” (US News, March 7, 2018)
Ask Larry: ​​​​​​When Can I Go From Spousal To Retirement Benefits?” (Forbes, March 7, 2018)
Spousal IRAs are a missed retirement savings opportunity for couples,” (CNBC, March 7, 2018)
Here’s how to pull off a tiny tax rate when you earn $100,000 in retirement,” (MarketWatch, March 8, 2018)

Wisdom from Some of Our Favorite Blogs:
Data “Points”: 5 Key Industry Trends You May Have Missed |
Ary Rosenbaum: Retirement Plan Advisors Advantage |
Squared Away Blog: Stock Market Jitters, Millennials? Relax |
RetirementRevised: Jolt: A discussion at the National Institute on Retirement Security |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #82 |
Squared Away Blog: Retirement – Ripped from the Headlines! |
ERISA Lawyer Blog: Fifth Circuit Upholds Dismissal of Class Action Against Fiduciaries of Radio Shack Corporation’s 401k Plan |

Hot Tips from Popular Web Resources:
NAPA Net: Will We See Any Action on Retirement Legislation This Year? |
NAPA Net: How to Make Financial Education Work |
NAPA Net: Hatch: Tax Reform Not Crumbs for Retirement Plan Participants |
The Motley Fool: What to Do if You’re Forced Into Early Retirement |
Kiplinger: Medicare Doesn’t Cover Hearing Aids but Retirees Have Options |
NAPA Net: Guess What’s Taking a Toll on Financial Wellness? |
NAPA Net: ‘False’ Start? |
NAPA Net: ARA Backs Small Business AHP Proposal – and Offers Suggestions |
NAPA Net: OregonSaves Tops $1 Million in Assets |
Morningstar: How to Best Leave an IRA to Charity |
The Motley Fool: Here’s Why the “Social Security at 62 or 70” Debate Is a Total Crapshoot |
NAPA Net: Case of the Week: Imputed Income |
NAPA Net: Enrollment Methods Matter in Moving Participants, Research Reveals  |
NAPA Net: Bipartisan Bill (Again) Seeks Lost and Found Participant Database |
Morningstar: Buckets: Not Just for Retirees |
NAPA Net: TDF Assets: The Big Got Even Bigger in 2017 |
NAPA Net: Tax Reform Change Clips 2018 HSA Contribution Limit |
NAPA Net: IRS OKs Speeding Up NQDC Distributions to Pay Taxes on Some 457A Deferrals |
The Motley Fool: How Should Retirees Think About Their “Income Cushion”? |
NAPA Net: Massachusetts Probes Rollover Recommendations |
NAPA Net: Traditional Measures (Still) Matter Most, But… |
NAPA Net: Big Retirement Bill Resurrected in Senate |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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