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Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 8/31/18 Trending Topics for ERISA Plan Sponsors: Week Ending 8/31/18
September 04
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:
DOL Fiduciary Rule Post-Mortem: How Long Will the Taste Linger?” (, August 28, 2018) Is the DOL’s Defunct Rule a Fiduciary Obi-Wan: More Powerful Dead Than Alive?

Compliance – Yin and Yang:
What Trump giveth retirement savers the IRS taketh away. By opening up the MEP gateway, more employees will have access to affordable retirement savings plans (without creating undue and non-value-adding liability for their employers). That’s the good news of the week. The bad news is the IRS may have just opened the spigots of leakage by tying student loan repayments to retirement saving. This has the potential to all end in tears.
IRS ruling allows 401k student loan benefits,” (MarketWatch, August 27, 2018) There’s a way to do this without blowing up your retirement, but it’s tricky and you’ve got to be extremely optimistic because everything else about human nature makes you skeptical of this idea.
How Student Loans Scuttle Retirement Plan Saving,” (401k Specialist, August 28, 2018) There’s a movement now which just might be responsible for creating the next great American retirement crisis.
Trump to Sign ‘Retirement Security’ Executive Order Friday,” (401k Specialist, August 29, 2018) Could it be? Could it be Godot?
Trump Calls For Review Of Rule Requiring RMDs At 70½,” (Financial Advisor, August 31, 2018) Not quite Godot,… yet.
Trump’s executive order instructs Labor to set table for Open MEPs,” (BenefitsPRO, August 31, 2018) And there he is! Godot! Well, not really. But at least we can see him now, if only from a distance.

Fiduciary – Choose Wisely:
Just because you can doesn’t mean you should. In the end, the marketplace will be the ultimate arbiter of who chose wisely and who didn’t.
Fiduciary rule worth more dead than alive – Carosa,” (BenefitsPRO, August 29, 2018) This is why the now-vacated Fiduciary Rule is here to stay. Until…
Merrill Lynch Lifts Ban On Commissions For Retirement Accounts,” (Financial Advisor, August 30, 2018) Poof! And just like that goes away their competitive marketing advantage. In the words of the knight guarding the Holy Grail in that Indiana Jones movie “They chose poorly.”

Fees – Yes, But Will They Get Away With It?:
Related to the above.
Commission-Free ‘Clean Shares’ Are Messier Than You Might Think,” (Financial Advisor, August 28, 2018) Oops! There’s that revenue-sharing thingee rearing its ugly head again!
Wells Fargo Drops Plans to Use T Shares in Retirement Accounts,” (PLANADVISER, August 29, 2018) Well, that was fun while it lasted.
Merrill Lynch brings back commission-based retirement accounts,” (On Wall Street, August 30, 2018) In case you overlooked if above, same story with a different take. It rates a rare double-category listing because it’s a fee issue in a Fiduciary Rule wrapper.

Investments – Blame It On The Education System:
Is it fair we place the onus of retiring in comfort on a citizenry ill-equipped to make the right decisions? Trouble is, there’s really no better answer than self-responsibility.
Americans Don’t Know How Inflation, Interest Impact Investments,” (401K Specialist, August 28, 2018) You think this might be a problem?
These mistakes with target-date funds can undermine 401k savings,” (CNBC, August 29, 2018) When it comes to target date funds, the article suggests to “go one or none at all.”

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.
Claims in T. Rowe Price Self-Dealing Suit Survive Motions to Dismiss,” (PLANADVISER, August 24, 2018)
How retirement advisers leverage tech to improve outcomes,” (Employee Benefit Adviser, August 27, 2018)
401k Plan Sponsors Worried About the Number of Participant Loans,” (PLANADVISER, August 27, 2018)
401k plans still matter to employees,” (BenefitsPRO, August 27, 2018)
Participant Loan Activity Appears to Have a Quarterly Seasonal Pattern,” (PLANADVISER, August 27, 2018)
401k Participants Regret Reckless Spending,” (401K Specialist, August 27, 2018)
401k Participants With Loans Save Less Than Those Without,” (PLANSPONSOR, August 27, 2018)
Employers have big concerns over retirement. Here’s why.” (Employee Benefit News, August 28, 2018)
A 403(b) Plan Is More Than Supplemental Retirement,” (Forbes, August 28, 2018)
ICI study says 401k plan participants showed commitment to retirement savings in Q1,” (Financial Regulation News, August 29, 2018)
Chrysler Pension Plan Participant Finds Some Litigation Success in 6th Circuit,” (PLANADVISER, August 29, 2018)
Amicus Briefs Argue Against 9th Circuit USC Decision About Arbitration Agreements,” (PLANADVISER, August 29, 2018)
A new way employers can use 401k to attract, retain recent graduates,” (Employee Benefit Adviser, August 30, 2018)
Employees prefer retirement advice to dining out,” (Employee Benefit News, August 31, 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.
Morningstar Examines How Participants Can Better Position Themselves for Retirement,” (PLANADVISER, August 24, 2018)
Top 5 industries with the most improved retirement plans,” (BenefitsPRO, August 24, 2018)
How To Plan (Or Not Plan) For Social Security In Retirement,” (Forbes, August 26, 2018)
How to ensure that assets end up with an heir — not that person’s spouse,” (Los Angeles Times, August 26, 2018)
Saving for Retirement Is Americans’ No. 1 Source of Financial Stress,” (PLANADVISER, August 27, 2018)
Average American Households Have a Savings Balance of …,” (401K Specialist, August 27, 2018)
Advisers Should Consider Unpredictable Retirement Age in Client Retirement Planning,” (PLANADVISER, August 27, 2018)
1 in 3 Americans have less than $5,000 saved for retirement,” (CNBC, August 27, 2018)
Alexa, what’s my retirement account balance?” (BenefitsPRO, August 29, 2018)
Retirement: 8 ways to start your year-end financial planning now,” (USA Today, August 29, 2018)

Wisdom from Some of Our Favorite Blogs:
401k Plan Blog: 403b vs. 401k: What’s the Difference? |
The Rosenbaum Law Firm P.C. Blog: IRS approves tying student loans to 401k employer contributions |
RIABiz: Trump exec order could hurt rollover efforts, but gives RIAs way to scale 401k servicing and dodge ‘bad apples’ |

Hot Tips from Popular Web Resources:
NAPA Net: Clayton Calls for End to Sales Contests |
NAPA Net: IRS Guidance Addresses Tax Reform Impact on Executive Comp |
NAPA Net: Are Early Retirement Account Withdrawals the New Norm Among Young Investors? |
Motley Fool: The No. 1 Reason Why People Tap Their Retirement Funds Early |
NAPA Net: Employers May Underestimate the Importance of 401k plans |
NAPA Net: Reference ‘Points’ |
NAPA Net: HSA Assets Surpass $50 Billion, But Overall Investment Percentage Still Lags |
NAPA Net: DC Plan Participants Hold Steady on Asset Allocations |
Kiplinger: Look to REITs for Retirement Income as Inflation Heats Up |
NAPA Net: Trump to Take on Retirement |
NAPA Net: Case of the Week: Sham Termination of Employment |
NAPA Net: 401k Participants Welcome Investment Advice |
NAPA Net: Report: 15% of Loan Takers Become Non-Savers |
Morningstar: Retiring Overseas May Not Be as Dreamy as You Think |
The Motley Fool: Senior Citizens Going Bankrupt at Twice the Rate They Used to |
Kiplinger: Myth: Life Insurance is NOT Taxable |
NAPA Net: Could MEPs Be on the President’s Mind? |
NAPA Net: A New ‘10-10-90’ Plan for Success |
NAPA Net: Are Retirement Decisions Driven by Personality? |
NAPA Net: Merrill Moves Back to Commissions on Retirement Accounts |
NAPA Net: ARPs, RMDs and E-Delivery – Oh, My! |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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