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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 4/13/18 Trending Topics for ERISA Plan Sponsors: Week Ending 4/13/18
April 16
00:38 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 Can Business Owners Do Before the Deadline to Save More for Retirement?” (, April 10, 2018) If you own a business, waiting until the last minute to reduce taxes limits your options. You still have some, though. Here they are.

Compliance – The Truth Hurts:
Compliance is a bear, but it sure beats the tiger that’ll chase you down otherwise.
IRS Asks for Comments on Determination Letters for 2019,” (PLANADVISER, April 6, 2018) Although the IRS stopped issuing Determination Letters in 2017, it’s open to the idea issuing them on an as needed basis, but only if it turns out enough people as for them.
Compliance hurts, but ERISA & IRS penalties will hurt even worse,” (BenefitsPRO, April 10, 2018) Ah, ain’t it da trute.

Fiduciary – Cavalry Rides In?:
We need to add the question mark because the jury is still out. Will the SEC come to the rescue of the fiduciary standard, or will the water it down like some say the DOL did?
Clayton Says ‘Sooner the Better’ for SEC Fiduciary Rule,” (ThinkAdvisor, April 10, 2018) Will this be a case of haste makes waste?
SEC to Take Up Fiduciary Proposal on April 18,” (ThinkAdvisor, April 11, 2018) Yes, this would qualify as “sooner.” Now the pressure’s on the SEC to make it better.
SEC Signals Start of Formal Broker Fiduciary Rule Examination,” (PLANADVISER, April 12, 2018) And away we go…
Fiduciary rule takes a hit in the Fifth Circuit,” (MarketWatch, April 12, 2018) Alicia Munnell agrees with others who say that – Rule or no Rule – it’s too late to turn back the hands of the clock.
Advisor? Broker? SEC proposes vote on fiduciary standards to help clear up confusion,” (On Wall Street, April 12, 2018) Well, maybe…

Fees – The Wrong Target:
Everyone’s talking about fees but few are focusing on the correct target. It’s the conflict-of-interest fees that matter most. But what happens when a client doesn’t act in his bests interest and allows conflict-of-interest fees? Well, by the book, a proper fiduciary should resign from the account.
SEC Orders Advisory Firms To Pay $12 Million To Harmed Clients,” (Financial Advisor, April 6, 2018) SEC determines a fiduciary breach occurs as a result of conflict-of-interest fees.
Fidelity Restructures Fees, Switching To AUM Format,” (Financial Advisor, April 11, 2018) 1.1%-1.7% for what? Picking their own mutual funds? On top of the fees they’re already getting for managing their own mutual funds? Sounds like it might be a case of double-dipping? Now, if this is for managing a portfolio of individual stocks and bonds, then it’s actually competitive for smaller accounts.

Investments – Much Ado about Risk:
Could this be another wrong target?
Lack of Understanding About Investment Risk Threatens Retirees, Workers,” (ThinkAdvisor, April 9, 2018) Solve it with buckets. Keep 2-5 years of expenses in cash. If that’s a problem, then there’s a problem.
More Critical Target Date Trends to Consider,” (The 401(k) Specialist, April 10, 2018) Sure, why not.
Truce: 401k Advisors Make Active/Passive Peace,” (The 401(k) Specialist, April 10, 2018) Perhaps, but not the way you think.
Some Warn Against Relying on ‘Active Share’ to Gauge a Fund’s Value,” (Wealth Management, April 11, 2018) Yeah, this isn’t going to work out.

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.
U.S. Census Wrong on 401K Coverage,” (The 401(k) Specialist, April 5, 2018)
Ruling on NY Times Multiemployer Plan Arbitration Challenge Rejects Use of ‘Segal Blend’,” (PLANADVISER, April 6, 2018)
Why are 401k participation rates so much lower at smaller employers?” (Employee Benefit News, April 8, 2018)
Employee retirement confidence on the decline,” (Employee Benefit Adviser, April 9, 2018)
6 Easy Steps to Get Sued Over Your 401k Plan,” (The 401(k) Specialist, April 9, 2018)
Virginia colleges form 403(b) multiple employer plan,” (Employee Benefit News, April 9, 2018)
Five bad investment habits that retirement plan sponsors should consider,” (Employee Benefit Adviser, April 9, 2018)
Benefits Dollar Amount Available for 401ks Just Shrunk,” (The 401(k) Specialist, April 10, 2018)
OCIO Model Can Improve Outcomes for DB and DC Plans,” (PLANADVISER, April 11, 2018)
ERISA Lawsuits Targeting Franklin Templeton Advanced, Consolidated by District Court,” (PLANADVISER, April 11, 2018)
Formal Retirement Plans Prompt Investors to Save More,” (PLANADVISER, April 11, 2018)
7 must-cover topics for annual reviews,” (Financial Planning, April 12, 2018)
Home Depot 401k Plan Latest Targeted with ERISA Fiduciary Breach Lawsuit,” (PLANADVISER, April 12, 2018)
Why employers should help employees understand the benefits of Roth 401k plans,” (Employee Benefit Adviser, April 12, 2018)
Judge Keeps Former Committee Members in ERISA Church Plan Suit,” (PLANADVISER, April 12, 2018)
Guiding employees before they take hardship distributions from 401k plans,” (Employee Benefit Adviser, April 13, 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.
Roth Option Viewed as Another Avenue for Diversification,” (PLANADVISER, April 6, 2018)
How financially secure is your retirement? Your account balance won’t tell you,” (MarketWatch, April 6, 2018)
401k: Get a retirement plan if your employer doesn’t offer one,” (USA Today, April 8, 2018)
Baby Boomers Not Doing Enough to Prepare for Retirement,” (PLANADVISER, April 9, 2017)
Older Pre-Retirees Worry a Lot About Social Security: Gallup,” (ThinkAdvisor, April 9, 2018)
U.S. Workers Still Lag In Retirement Savings, But Execs See Some Hope,” (Financial Advisor, April 9, 2018)
7 mistakes guaranteed to ruin your retirement,” (AOL Finance, April 9, 2018)
Your long life could be the death of your retirement savings,” (The Washington Post, April 9, 2018)
Traditional retirement planning isn’t going to cut it. Do this instead,” (MarketWatch, April 9, 2018)
Retirement Plan Participants Need Professional Advice: Survey,” (ThinkAdvisor, April 10, 2018)
Retirees Say Life Is More Expensive Than They Had Imagined,” (PLANADVISER, April 10, 2018)
How long $1 million in retirement lasts in US cities,” (CNBC, April 10, 2018)
Retirement surprises: What retirees wish they had known,” (Fox Business, April 10, 2018)
How to negotiate your retirement salary,” (MarketWatch, April 10, 2018)
Retirement Plan Participants Need Professional Advice: Survey,” (ThinkAdvisor, April 10, 2018)
More Americans Participate in Credit Card Rewards Programs Than 401ks,” (The 401(k) Specialist, April 10, 2018)
Three Things To Consider Before Taking A Distribution From A Self-Directed IRA,” (Forbes, April 11, 2018)

Wisdom from Some of Our Favorite Blogs:
Ary Rosenbaum: 401k Plan Sponsors Aren’t Aware Of These Mistakes They Make |
Data “Points”: College ‘Intuition’ |
ERISA Lawyer Blog: Eighth Circuit Upholds The Plan Administrator’s Ruling That The Participant’s Benefit Was Transferred Out Of The Plan Prior To His Death, So That His Surviving Spouse Had No Claim To The Benefit |
Fi360: Fi360’s Conference is Awesome and Here’s Why! |
The Rosenbaum Law Firm P.C. Blog: That 401k Conference to hit Chicago this September |
The Rosenbaum Law Firm P.C. Blog: A Little Humor May Help |
Proskauer: Ninth Circuit Deepens Circuit Split Over Whether Delinquent Contributions Are Plan Assets |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #86 |
Squared Away Blog: Arcane but Shrewd Retirement Solution? |
Fi360: You Can Help Shape the Strategies of Retirement Advisors |

Hot Tips from Popular Web Resources:
NAPA Net: SEC Settles Share Class Suit for $15 Million |
NAPA Net: New York Takes Aim at Active Share Disclosures |
NAPA Net: Scottrade Moves to Move Massachusetts Fiduciary Claim to Federal Court |
The Motley Fool: This Little-Known 401k Trick Can Open the Floodgates to Roth IRA Savings |
NAPA Net: The Luck of the Irish |
NAPA Net: Investors Considering Alternative Investments Amid Market Volatility |
NAPA Net: Non-Mortgage Debt Inhibits Retirement Savings |
The Motley Fool: You’ll Spend 80% of Your Retirement Money on These 5 Things. Here’s How to Save on Them |
NAPA Net: Under Pressure to Reduce Fees, Passively Managed TDFs Finding Favor |
NAPA Net: Study: Wealth Shocks Shorten Life |
Morningstar: Where Investors Can Go Wrong |
Kiplinger: A One-Size-Fits-All Retirement Plan Won’t Work |
NAPA Net: SEC Announces Open Meeting on Fiduciary Issues |
NAPA Net: TCJA Changes Compel Review of ‘Uncomfortable’ Loan Fiduciary Obligations |
NAPA Net: 403(b) MEP Formed by Group of Virginia Private Colleges |
NAPA Net: Participants Prefer Workplace Plans, Want More Employer Help |
The Motley Fool: 65% of Americans Aren’t Saving Enough |
NAPA Net: Tax Regulations Subject to New Scrutiny Under Agency Agreement |
NAPA Net: Enacting RESA Key to Fostering Retirement Savings Options, Panelists Say |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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