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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 7/6/18 Trending Topics for ERISA Plan Sponsors: Week Ending 7/6/18
July 09
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:
Must Read for the Summer: Top Fiduciary Questions 401k Plan Sponsors Must Ask (But Sometimes Don’t),” (, July 3, 2018) Would you rather have the nuts and bolts practical guide for what to ask or the theoretical questions that tend towards the philosophical? Most 401k plan sponsors are too busy for theory, that’s why they’ll prefer to focus on these questions.

Compliance – Plugging Leaks Instead of Building New Dikes:
Seems likes problems have easy solutions if you only take the time to take a look at the obvious. That these solutions are also off the beaten track appears to be the real problem.
Fight backlash against retirement planning nudges,” (Employee Benefit Adviser, June 29, 2018) The author does a fine job of explaining why low-income workers shouldn’t be forced into saving for retirement when Social Security will provide more than what they need (spoiler alert: because it causes them to take on more debt, which for them is a greater priority to avoid than it is to save for retirement). Then, for unknown reasons, the author then does a 180 and tries to explain how the US Thrift Savings Program makes his earlier point meaningless. To this reader, it looks like it only enhances his initial argument.
PSCA Calls for Clearer Guidance from IRS and DOL on Missing Participants,” (PLANADVISER, June 29, 2018) Speaking of low-income workers, here’s a problem that seems to inordinately impact that particular cohort. This gives rise to the concept of a “Personal” or “Universal” individual retirement savings account. Kind of like a “Super” SEP IRA where the employee owns the account and the employer merely places deferred savings into it. That means the worker never leaves his money behind.
PBGC Aligns Disaster Relief Directly With IRS Announcements,” (PLANADVISER, July 3, 2018) Some technical suggestions as we head into the hurricane season.
Congress Says No Rothification For Now,” (Financial Advisor, July 3, 2018) We’ve been seeing this story a lot. It was forthrightly denied last week. Why does it keep coming up?

Fiduciary – What? Me Worry?:
Nothing this week. But keep your eyes on this channel for late breaking news.

Fees – Marketing is All the Buzz:
If it reeks of marketing, it’s probably not as it appears to be.
Clean Shares’ Popularity,” (PLANADVISER, May/June 2018) Yes, they’re popular, but the article suggests we need a clearer definition of them. It would have been wittier to say we need a “cleaner” definition of them.

Investments – Speaking of Buzz:
If an investment reeks of buzz, it’s a fad. Fads generally don’t make good long-term investments.
Three Reasons Cryptocurrency Is Making Its Way Into Retirement Plans,” Forbes, June 27, 2018) The author’s basic contention: If you like REITs, you’ll love cryptocurrencies!
5 Guidelines for Investing a Retirement Portfolio,” (US News, June 28, 2018) All good points.
How can I simplify my retirement investments?” (CNN, June 29, 2018) Maybe, maybe not. It appears the author comes close to understanding the evils of over-diversification, but can’t quite get the reasons why.

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.
Matrix Trust Company Accused of Making Unauthorized Transfers of 403(b) Plan Assets,” (PLANADVISER, July 2, 2018)
DOL Investigation Results in $5 Million ESOP Settlement,” (PLANADVISER, July 2, 2018)
Average Deferral Rate Reaches 8.3%,” (PLANADVISER, July 2, 2018)
10 insights on 401k plans & participants: T. Rowe Price report,” (BenefitsPRO, July 2, 2018)
Participation Rates Not Affected by Student Loans,” (PLANADVISER, July 2, 2018)
4 Ways Advisors Can Serve the IRA Market,” (ThinkAdvisor, July 3, 2018)
Plan sponsors must protect employee 401k loans from default,” (Employee Benefit Adviser, July 3, 2018)
The Advisor & The Quant: Is the 4% Rule Dead?” (ThinkAdvisor, July 3, 2018)
Can you speak ‘plan-sponsor-speak’? – Carosa,” (BenefitsPRO, July 3, 2018)
Average 401k Deferral Rate Reaches All-Time High: T. Rowe Price,” (ThinkAdvisor, July 3, 2018)
Five retirement planning mistakes made by small business sellers,” (Crain’s Cleveland Business, July 3, 2018)
Is employees’ growing retirement confidence misguided?” (Employee Benefit News, July 6, 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.
Why squirreling away every spare dime into your 401k is a bad idea,” (CNBC, June 28, 2018)
Is it ever a good idea to pay Roth conversion taxes with IRA money?” (MarketWatch, June 28, 2018)
10 indicators of retirement confidence – or lack of it,” (BenefitsPRO, June 29, 2018)
Retirement Catch Up Contributions – Supercharge Your Nest Egg,” (Forbes, July 2, 2018)
Here’s how aging singles should plan for their golden years,” (CNBC, July 2, 2018)
401k investors: What are the risks and rewards for the rest of 2018,” (USA Today, July 2, 2018)
There Is Hope For Women In Retirement,” (Financial Advisor, July 3, 2018)
How Retirement Preparedness Varies by Profession,” (ThinkAdvisor, July 3, 2018)
Americans With Low Savings May Not Have To Work Until They’re Dead, Morningstar Says,” (Financial Advisor, July 5, 2018)
401k and retirement saving strategies,” (Employee Benefit News, July 5, 2018)
Pre-Retirees Expect to Need More Money Than What Retirees Spend,” (PLANADVISER, July 5, 2018)
Auto-portability key to helping women save in retirement,” (Employee Benefit News, July 6, 2018)

Wisdom from Some of Our Favorite Blogs:
The Rosenbaum Law Firm P.C. Blog: It’s a changed and less profitable world for financial advisors |
The Rosenbaum Law Firm P.C. Blog: You see how large 401k providers can treat their employees |
Data “Points”: What’s (Really) Hindering Millennials’ Retirement Savings? |
Ary Rosenbaum: Mistakes An Employer Needs To Avoid When Starting A 401k Plan |
Ary Rosenbaum: The Rosenbaum Law Firm Review |
Squared Away Blog: Readers Like a Travel Twist on Finances |
Data “Points”: 5 Plan Committee Lessons from the Second Continental Congress |
The Rosenbaum Law Firm P.C. Blog: Matrix sued over Vantage Benefits |
The Rosenbaum Law Firm P.C. Blog: Empathy goes a long way |
The Rosenbaum Law Firm P.C. Blog: Keep Those Beneficiary Information On File and Updated |
RetirementRevised: Smart IRA opportunities exist under new tax law, but hurry |

Hot Tips from Popular Web Resources:
The Motley Fool: Retiring With Debt? Here’s How to Manage It |
NAPA Net: Hackers Crack into 529 College Savings |
NAPA Net: CPS Needs a New GPS |
The Motley Fool: Social Security’s Purchasing Power Has Declined 34% Since 2000 |
Kiplinger: Midyear Moves for Retirees to Rein In Tax Tabs | Baby Boomers Are Ready to Retire; Their Debt Isn’t |
NAPA Net: How Has Market Volatility Moved Average 401k Balances? |
NAPA Net: 5 Plan Committee Lessons from the Second Continental Congress |
NAPA Net: PSCA Makes Recommendations for Missing Participant Guidance | Think Twice About Withdrawing from Your IRA |
NAPA Net: New Plaintiff Class Charges Matrix in Vantage Benefits Theft |
NAPA Net: Under Covered |
NAPA Net: Cerulli: 401k Participants ‘Clueless’ About Decumulation |
NAPA Net: Extra Employer Contribution Helps Workers with Student Debt Save More |
Morningstar: Why You Need a Retirement Policy Statement |
Kiplinger: How a Merger or Acquisition Affects Your 401k |
The Motley Fool: The Exciting Feature 67% of 401k Plans Offer |
NAPA Net: Fiduciary Rule Litigation (Still) Lingers |
NAPA Net: Study Uncovers Disconnects on Couples’ Retirement Expectations |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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