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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 3/30/18 Trending Topics for ERISA Plan Sponsors: Week Ending 3/30/18
April 02
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:
The Greatest 401(k) Book Sequel Ever, by Ary Rosenbaum – Chapter 3,” (, March 27, 2018) Ary Rosenbaum’s latest book tells the story of the modern retirement era through the lens of classic movie sequels, but it’s his own unique experiences that tell the real story. Here’s a taste.

Compliance – Fiddling Away Precious Time:
Nero may have fiddled while Rome burned, but Washington legislators appear to be fiddling with the 401k MEP bill. In the meantime, states are burning to assume the role of the Feds.
What 401k RESA Legislation Means for MEPs and PEPs,” (The 401(k) Specialist, March 23, 2018) A good overview of a bill that hasn’t passed yet – and may never pass.
Omnibus spending bill leaves out health, retirement provisions,” (Employee Benefit News, March 25, 2018) Once again, 401k MEPs are left on the cutting room floor.
New Jersey police, firefighters aggravate pensions mess,” (Employee Benefit Adviser, March 28, 2018) Yeah, this story ain’t going away.
Oregon Settles Lawsuit Related to State Run Retirement Plan,” (Wealth Management, March 29, 2018) Do you now see why this is going to be a mess? Companies that already had retirement plans and were filing with the federal government were now required to also file with Oregon because of this new law.
ERIC Settles Lawsuit With Oregon Retirement Savings Board,” (PLANADVISER, March 29, 2018) Same story. Different (and shorter) take.

Fiduciary – Filling the Void:
When the chasm opens, rest assured physics requires the equilibrium be restored. So, into this void rushes in everything – and anything – to quell this temporary imbalance. That’s what the CFP Board did this week. Is it valid? Let the debate begin.
RIP fiduciary rule? Not so fast,” (Employee Benefit Adviser, March 26, 2018) Yet another article declaring the horse is already out of the barn.
Consumer Group Says Industry Wants ‘Watered-Down’ Advisor Rule,” (Financial Advisor, March 26, 2018) According to Barbara Roper of the Consumer Federation of America, according to the article, “said conflict of interest disclosures—the industry’s sole suggestion of enhancing existing B-D regulatory requirements—have been shown for years by consumer research to be ‘ineffective in protecting investors.’”
Fixed-Annuities Group Drops Lawsuit Against DOL Rule,” (Financial Advisor, March 27, 2018) The case was moot after the 5th circuit’s decision.
The Fiduciary Standard Is Still Evolving,” (Wealth Management, March 27 2018) Yep, we knew that.
DOL weighs political pressure to drop defense of fiduciary rule,” (BenefitsPRO, March 27, 2018) Expectations are that we won’t be seeing much of a fight.
SEC pledges quick delivery on fiduciary standard, but some have doubts,” (BenefitsPRO, March 28, 2018) It all depends what your meaning of “quick” is.
CFP Board Expands Fiduciary Requirements, Finalizes New Ethics Code,” (Financial Advisor, March 29, 2018) This is the first attempt by the industry to redefine “fiduciary.” Perhaps the watering down has begun. In this defintion, self-dealing transactions is allowed as long as you disclose these normally prohibited transactions to the client and the client agrees to allow them. This particular section would only apply to non-SEC Registered Investment Advisers as SEC-RIAs will still need to abide by the regulation against prohibited transactions. Ironically, it appears Barbara Roper doesn’t define this as “watered-down.” The article says, “The Consumer Federation of America ‘strongly supports the CFP Board’s bold and timely decision to extend the fiduciary standard to all financial advice,’ said CFA Director of Investor Protection Barbara Roper, who was a member of the commission that wrote the new code.”
Will Brokerages Comply with CFP Board’s New Fiduciary Standard?” (Wealth Management, March 29, 2018) Here are the salient points: Brokers will ignore it like they did the last time the CFP introduced a “fiduciary” standard; It’s unenforceable; It’s no different than existing securities law.
CFP Board Expands Fiduciary Duty for Planners,” (ThinkAdvisor, March 29, 2018) Another take on the subject.
With DOL Fiduciary Expansion Faltering, CFP Board Requires Best Interest Service,” (PLANADVISER, March 29, 2018) Yet again we ask: Are self-dealing conflict-of-interest fees ever in the “best interests” of anyone (except the one benefiting from the self-dealing)?
CFP Board May Revise New Fiduciary Standard if SEC Sets Higher One: Keller,” (ThinkAdvisor, March 29, 2018) Pushback from purists already?

Fees – The Beginning of the End?:
With all the low hanging fruit apparently picked, where’s your friendly neighborhood tort attorney to go?
Marcia Wagner: How to Avoid 401k ‘Share-Class Chaos’,” (The 401(k) Specialist, March 22, 2018) This is the thing that can really ruin your day of you’re a 401k fiduciary.
Will 401k Fee Lawsuits Soon Be In The Rearview Mirror?” (Forbes, March 27, 2018) On the other hand, maybe all those ruined days are a thing of the past.

Investments – Repeating History:
When you see the same mistakes being made over and over again, it tells you two things. First, there aren’t any better ideas. Second, bad ideas still sell.
CITs Are Hot—Why Aren’t More 401k Advisors Intrigued?” (The 401(k) Specialist, March 22, 2018) Maybe it’s because they don’t offer the same regulatory oversight as registered investment companies.
Pre-Retirees, Retirees Not Addressing Market Volatility in Portfolios,” (PLANADVISER, March 26, 2018) Oddly, the article makes it sound like investing in equities is a bad idea because – heaven forbid – they can go down! Sounds like marketing timing or someone trying to sell annuities. Oh, wait a second. Look who’s quoted in the article.
Suit Claims Gannett 401k Holds Too Much in Parent Company Stock,” (PLANADVISER, March 27, 2018) A classic mistake.
What To Do When Couples Have Differing Risk Tolerances,” (Financial Advisor, March 28, 2018) Tell them to talk their marriage counselor about this because risk tolerance has nothing to do with your investment counselor. “Heresy!” you say? Then you ought to read this article: Should 401k Plan Sponsors Ban Risk Tolerance Questionnaires? (, August 13, 2013).
Reverse Mortgages Could Be Next Hot Topic in Retirement Planning,” (ThinkAdvisor, March 29, 2018) Actually, this was so last year when Wade wrote he’s book. But he’s back again talking about it in a new article.
Cryptocurrency Index Fund Offers Shares to IRAs,” (ThinkAdvisor, March 29, 2018) Paging Seth MacFarlane. Seth MacFarlane. Call on courtesy line number two. Something about a new script called “A Million Ways to Lose Money in Your IRA.”

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.
How to Get People ‘Lined-Up Around the Corner’ for HSAs,” (The 401(k) Specialist, March 22, 2018)
Thanks to tax cuts, employers beef up retirement efforts,” (Employee Benefit News, March 22, 2018)
How to Get People ‘Lined-Up Around the Corner’ for HSAs,” (The 401(k) Specialist, March 22, 2018)
Plans Offering Roth Accounts Have Doubled in the Past Decade,” (PLANADVISER, March 23, 2018)
Why employers should help employees understand the benefits of Roth 401k plans,” (Employee Benefit News, March 26, 2018)
Best practices for mandatory retirement plan distributions,” (Employee Benefit Adviser, March 26, 2018)
On the March: What Truly Excites BridgePoint’s Innovative CEO About Retirement Saving,” (The 401(k) Specialist, March 26, 2018)
CVS Wins Dismissal of Stable Value Fund Suit by 1st Circuit,” (PLANADVISER, March 26, 2018)
Why WaPo Whacked Warren Buffett’s 401k Lineup,” (The 401(k) Specialist, March 27, 2018)
NAFA Drops Its Fiduciary Rule Challenge in DC Circuit,” (PLANADVISER, March 27, 2018)
What Happened With 401k Assets in the Fourth Quarter?” (The 401(k) Specialist, March 27, 2018)
TPA Accused of Stealing Assets From Retirement Plans,” (PLANADVISER, March 27, 2018)
Employers: Here’s how you improve the broken 401k plan system,” (Employee Benefit News, March 29, 2018)
American participants in foreign retirement plans need clearer rules,” (Employee Benefit Adviser, March 29, 2018)
Retirement Plan Assets, Participation Are Growing: EBRI,” (ThinkAdvisor, March 30, 2019)

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.
Gen Xers on Shaky Retirement Planning Ground,” (PLANADVISER, March 23, 2018)
When RMDs From Retirement Accounts Aren’t Required,” (Forbes, March 23, 2018)
These 3 Threats Scare Gen Xers More Than Basic Retirement Costs: IRI,” (ThinkAdvisor, March 24, 2018)
Recently Turned 70 and 1/2? Don’t Miss the RMD Deadline,” (Money, March 26, 2018)
Ask Larry: ​​​​​​Will Early Retirement Mean Lower Widow’s Benefits?” (Forbes, March 26, 2018)
How the new tax law creates a ‘perfect storm’ for Roth IRA conversions,” (MarketWatch, March 27, 2018)
Market Volatility Hasn’t Tempered Historically High DC Plan Optimism,” (PLANADVISER, March 27, 2018)
Yes, it’s true: Older people depend on Social Security,” (MarketWatch, March 27, 2018)
If you received a 401k plan refund check, here’s what to do,” (CNBC, March 27, 2018)
The 5 Ways Retirement Plans Are Most Likely To Go Off Track,” (Forbes, March 27, 2018)
Millennials are saving, but they’re also making this big mistake,” (MarketWatch, March 27, 2018)
Saving for Retirement Lower Priority for Women Than Men: Willis Towers Watson,” (ThinkAdvisor, March 28, 2018)
Discovering new passions — and who you really are — in retirement,” (Miami Herald, March 28, 2018)
Ask Larry: ​​​​​​Early Widow’s Benefits Or Wait Till FRA?” (Forbes, March 28, 2018)
401k savers: How Millennials can fix retirement investment mistakes,” (USA Today, March 28, 2018)
This retired couple lives for their hobbies — and each other,” (MarketWatch, March 29, 2018)
Majority of Workers Feel Financially Stressed,” (PLANADVISER, March 29, 2018)
Retirement Saving Less A Priority For Women, Survey Says,” (Financial Advisor, March 30, 2018)

Wisdom from Some of Our Favorite Blogs:
Ary Rosenbaum: Plan Sponsors Need To Fix Their Plan Errors Now! |
ERISA Lawyer Blog: Ninth Circuit Holds That The Company’s Owners And Officers Are Not ERISA Fiduciaries and Therefore Are Not Response For Unpaid Contributions To The Plan |
Squared Away Blog: Boomers Do Retirement their Way |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #84 |
ERISA Lawyer Blog: New Tax Act Extends The Period For Rolling Over The Plan Offset Amount From An Outstanding Plan Loan And Avoiding Adverse Tax Consequences |
Business of Benefits: A 403(b) “Pseudomorph”: The IRS’s Gradual Shift On Applying 415 Limits to 403(b) Plans | 401k Advisors – The New Breed |
The Rosenbaum Law Firm P.C. Blog: The Fiduciary Rule is not dead, but extremely sleepy |
The Rosenbaum Law Firm P.C. Blog: Be patient with possible referral sources |
Proskauer: Seventh Circuit Rejects “Big Buyer” Defense to Successor Liability |
Proskauer: Confusion Ensues After Appeal Over Fiduciary Rule in D.C. Circuit Dropped |
Squared Away Blog: Future Retirees Financially Fragile |
RetirementRevised: Social Security funding should ease customer-service crisis |

Hot Tips from Popular Web Resources:
NAPA Net: TPA Theft Suit Adds Another Party |
NAPA Net: Is Your Workplace ‘Toxic’? |
NAPA Net: Wyoming Task Force Tackles Retirement, State-Run Plan for Private Sector |
NAPA Net: Women’s Retirement Optimism Takes a Hit |
Kiplinger: The Biggest Risk Retirees Face Right Now |
NAPA Net: NAFA, DOL Drop Fiduciary Ruling Appeal |
NAPA Net: Parental Guidance |
NAPA Net: Many Retirees, Pre-Retirees Not in Tune with Their Risk Tolerance Level |
NAPA Net: Use of Roths in 401k Plans Doubled in Past Decade, PSCA Survey Finds |
Kiplinger: Don’t Let Volatility Rear-End Your Retirement Plans |
The Motley Fool: Procrastinating on Retirement Savings? Here’s What It Might Cost You |
NAPA Net: Simplify Disclosure and Explore E-Delivery, Advisory Council Tells Acosta |
NAPA Net: Case of the Week: Reasonable Interest Rate on Plan Loan |
NAPA Net: $50 Change in HSA Limit May Be More Costly Than First Thought |
NAPA Net: What Does the 5th Circuit Decision Mean for Rollover Recommendations? |
Morningstar: Roth or Traditional: Keep the Decision Personal |
Kiplinger: How 10 Types of Retirement Income Get Taxed |
NAPA Net: ERIC Strikes a Deal with Oregon on OregonSaves Reporting Requirement |
NAPA Net: Enforcement and Litigation Update |
NAPA Net: Volatility Doesn’t Deter Investor Optimism, Wells Fargo Finds |
The Motley Fool: 3 Reasons to Claim Social Security at Age 62 |
NAPA Net: Is an IRS Overhaul Next on Capitol Hill? |
NAPA Net: DB Plans Holding Their Own, EBSA Finds |

Miss anything? Feel free to add a comment below.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


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