What do you think of our site upgrade?
Hosting an industry conference? Ask us about including it in this ticker? Trending Topics for ERISA Plan Sponsors: Week Ending 12/14/18 Trending Topics for ERISA Plan Sponsors: Week Ending 12/14/18
December 17
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:
3 Reasons 401k Plan Sponsors are Smiling,” (, December 11, 2018) As the year approaches its conclusion, it’s a good time to reflect on the good that we have seen in the 401k world. In doing so, we can see plan sponsors have reason to smile.

Compliance – Camel’s Nose Meet Tent:
A lot of folks worry state-sponsored retirement plans are the beginning of nationalizing the retirement industry. But what if it’s really the beginning of privatizing Social Security?
Tax Reform Shakes Up Routine EOY Retirement Planning,” (ThinkAdvisor, December 5, 2018) Stay tuned.
Workers Reacting Positively to OregonSaves Retirement Program Opportunity,” (PLANADVISER, December 11, 2018) The good news is that this is behaving exactly like a private company auto-enrollment program. The better news is, if the trend continues, this concept may replace Social Security. In effect, it would organically privatize Social Security without going through all the rigmarole of the legislative process. The bad news (and perhaps the very bad news), is that this is being administer by the government, not by the competitive marketplace. If there’s anything we’ve learned from government administration, the higher the dollars, the higher the odds for manipulative corruption.
The first state auto-IRA program is up and running,” (MarketWatch, December 11, 2018) Here’s another take.
The pension math test New Jersey and Illinois are nearly flunking,” (BenefitsPRO, December 12, 2018) OK, let’s get this straight. They can’t keep their own public pensions in order, so now they want private retirement plans, too?

Fiduciary – Be Careful Now:
Bad decisions do not necessarily mean there’s a conflict-of-interest. Sometimes they’re just bad decisions.
10 Litigation Lessons for 401k Fiduciaries,” (401K Specialist, December 12, 2018) Just in case you want to void nasty circumstances.
Edward Jones Self-Dealing ERISA Challenge Leads to $3M Settlement,” (PLANADVISER, December 12, 2018) Sort of defines “conflict-of-interest.”
Unexplained Hemorrhaging Of Cash From IRA Prompts Call For Help,” (Financial Advisor, December 14, 2018) This is where we have to be careful. Is this an example of a fiduciary breach? Or merely bad luck at investing. The article, though it certainly implies a negative situation, doesn’t present the reasoning clearly enough. If we see more like this, we know we’re heading for a slippery slope.

Fees – The End of 12b-1 Fees?:
If you don’t like it when someone is hanging around you, you might try pestering them until they voluntarily walk away. Is that the SEC strategy with 12b-1 fees?
SEC Sending Letters To Hybrid RIAs That Failed To Self-Report 12b-1 Fees,” (Financial Advisor, December 12, 2018) Will they open with “Season’s Greetings!”
SEC Looks Deeper at Advisors’ Share-Class Use, Revenue Sharing,” (ThinkAdvisor, December 13, 2018) Will this end up “shaming away” conflict-of-interest behavior?

Investments – Emotion vs. Logic:
Who wins? We’d all like to think we’re disciplined enough to stay logical. That works when we’re watching someone else try to answer the question on a TV game show. But when we’re on that same seat, things don’t go the same way as they do when we’re on our living room couch.
Managers’ Long-Term Outlook Gives Context for Current Volatility,” (PLANADVISER, December 7, 2018) Prognosticators say no near-term recession.
ESG Inclusion is a Major 401k Fiduciary Fail,” (401K Specialist, December 10, 2018) Once again, readers were well ahead of the curve (see “When Does ‘Socially Responsible’ Investing Violate Fiduciary Duty?” May 23, 2017).
How does stock market drop affect my 401k?” (USA Today, December 12, 2018) How does that saying go? “If you have to ask, then you can’t afford it.” If you have to ask this question, then it’s already too late for you. This time to ask this question is well before the market drops. Alas, behavioral economics tells us why this is so.

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.
403(b) Plans Offer Diverse Range of Investment Options,” (PLANADVISER, December 7, 2018)
Progressive Plan Design Features Have Moved Down-Market,” (PLANADVISER, December 7, 2018)
Financial and Physical Wellbeing Boost Workplace Productivity,” (PLANADVISER, December 7, 2018)
DC Plans Rank High For Employees And Employers,” (Financial Advisor, December 10, 2018)
Settlement Reached in Franklin Templeton Self-Dealing Lawsuit,” (PLANADVISER, December 10, 2018)
How Did 401k ‘Trading’ Fare in November?” (401K Specialist, December 10, 2018)
MetLife Pension Calculations Questioned in ERISA Complaint,” (PLANADVISER, December 10, 2018)
9 risks in 2019 (and some fixes) for sponsors of retirement plans,” (BenefitsPRO, December 10, 2018)
ERISA Litigators Reflect on Lessons Learned in 2018,” (PLANADVISER, December 10, 2018)
9th Circuit Upholds Dismissal of Chevron Fiduciary Breach Lawsuit,” (PLANADVISER, December 10, 2018)
401k Plan Participants Contributing At Record Levels, Survey Says,” (Financial Advisor, December 11, 2018)
Top 5 Causes of Workplace Financial Stress (And What It Costs),” (401K Specialist, December 11, 2018)
November Was a Typical Month for Trading in 401k Plans,” (PLANADVISER, December 11, 2018)
Personalizing Retirement Auto-Enrollment Plans,” (Wealth Management, December 11, 2018)
Financial Stress Adds Significantly to Labor Costs,” (PLANADVISER, December 11, 2018)
Will dismissal of Chevron 401k lawsuit tip the scales for sponsors in other venues?” (BenefitsPRO, December 11, 2018)
ERISA Suit Against ‘Small’ 401k Settled for $500K,” (PLANADVISER, December 12, 2018)
Build a better 401k, get a better company – Carosa,” (BenefitsPRO, December 12, 2018)
Why Employers’ Retirement Plan Misperceptions Could Kill Their Business,” (401K Specialist, December 12, 2018)
Retirement Readiness Not No. 1 Measure of 401k Plan Success for Plan Sponsors,” (PLANADVISER, December 12, 2018)
Avoiding the headaches and frustration of ERISA litigation,” (BenefitsPRO, December 12, 2018)
Education and Better Investments Needed to Propel HSAs to Retirement Savings Vehicles,” (PLANADVISER, December 13, 2018)
Small employers would consider joining an Open MEP – even if they already sponsor a plan,” (BenefitsPRO, December 13, 2018)
Workers putting retirement on the backburner are taxing employers,” (Employee Benefit News, December 14, 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.
Social Security notices available online, though traffic slows access,” (CNBC, December 5, 2018)
How to help clients juggle two (or more) defined contribution plans,” (Financial Planning, December 7, 2018)
Lawsuit Seeks to Remove Killer as Victim’s 401k Beneficiary,” (401K Specialist, December 7, 2018)
3 Year-End IRA And 401k Moves,” (Forbes, December 10, 2018)
The top regrets of retirees,” (The Washington Post, December 10, 2018)
401k Providers Are Top Source for Financial Advice,” (PLANADVISER, December 11, 2108)
Wait! Average 401k Contribution Rates Are How Much?” (401K Specialist, December 11, 2018)
Withdrawing Money From Your Retirement Accounts in a Tax-Efficient Manner,” (TheStreet, December 11, 2018)
Consider All Individual Circumstances Before Suggesting 4% Retirement Income Withdrawal,” (PLANADVISER, December 11, 2018)
Are You Using The Wrong Age To Plan Retirement?” (Forbes, December 11, 2018)
Working With Financial Professionals Better Engages K-12 403(b) Participants,” (PLANADVISER, December 12, 2018)
‘I blame myself’: Retirement remains out of reach for millions of Americans,” (CBS News, December 12, 2018)
Americans Expect to Be Better Off Financially in 2019,” (PLANADVISER, December 13. 2018)
BlackRock, Envestnet, Carson Group new retirement offerings,” (Financial Planning, December 13, 2018)
Employers Must Act Ahead of Retirement Wave,” (PLANADVISER, December 13, 2018)

Wisdom from Some of Our Favorite Blogs:
ERISA Lawyer Blog: Ninth Circuit Holds That Plaintiff Must Have Actual Knowledge Of The Alleged Breach Of Fiduciary Duty Under Section 1104 of ERISA More Than Three Years Before Filing Suit In Order For The Suit To Be Time-Barred Under ERISA |
ERISA Lawyer Blog: Recent Tax Legislation Changes Some Of The Rules For Hardship Withdrawals, Starting In 2019 |
Proskauer: IRS Announces Transition Relief From The Once-In-Always-In Requirement For Excluding Part-Time Employees Under 403(b) Plans |
Fred Reish: Best Interest and Best Practices #11 |
The Rosenbaum Law Firm P.C. Blog: With Millennials uninterested in retirement, plan providers have a job to do |
The Rosenbaum Law Firm P.C. Blog: Need Auditors who understand the “new way” |
The Rosenbaum Law Firm P.C. Blog: The MEP Solution |
Squared Away Blog: Reducing Poverty for Our Oldest Retirees |
The Chicago Financial Planner: Charitable Giving and Tax Reform |
Ary Rosenbaum: A Plan Sponsor Can Increase 401k Participation Without Costing Much $$$ |
Nerd’s Eye View: Pros and Cons of Completing a Rollover Before Year-End |

Hot Tips from Popular Web Resources:
NAPA Net: Franklin Templeton Settles Proprietary Fund Suit |
NAPA Net: Is All Well with Financial Wellness? |
NAPA Net: Persistent Participant Plaintiff Pursues Stable Value Suit – Again |
NAPA Net: Study Finds Retirees Spending More Than Anticipated |
Morningstar: How to Reduce Risk in Your Portfolio Using a Light Touch |
The Motley Fool: What’s the Best Way to Invest if an IRA Is Off the Table? |
Kiplinger: Create a Solid Retirement Income Plan |
NAPA Net: A Record Savings Rate for 401k Plans |
NAPA Net: 8 Things to Know About the State of Financial Wellness |
NAPA Net: Retirement Provisions Remain in Retooled Lame Duck Tax Package |
NAPA Net: Participant Transfers Trended Back to ‘Normal’ in November |
The Motley Fool: 3 Ways You Can Lose Your Social Security Benefits |
NAPA Net: $500k Settlement Struck in Excessive Fee Case |
NAPA Net: Case of the Week: Deferral Election Timing for the Self-employed |
NAPA Net: FINRA Detects ‘Unsuitable Recommendations’ to Retail Investors |
NAPA Net: Thinking About Offering a Student Loan Benefit Program? |
The Motley Fool: 3 Major Problems With 401k Plans | Qualified Charitable Distributions: Donate to Charity, Not the Government |
Morningstar: 3 Ways to Reduce Risk in a Portfolio |
The Motley Fool: 5 Steps to Making Sure You’re Ready to Retire |
NAPA Net: Edward Jones Settles Excessive Fee Suit |
NAPA Net: READER POLL: What’s Up With Financial Wellness? |
NAPA Net: IRS Should Clarify ‘Significant Failures’ and Expand SCP, ARA Suggests |

Miss anything? Feel free to add a comment below.

Related Articles

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA

1 Comment

Only registered users can comment. Login is sponsored by…

Order Your 401k Fiduciary Solutions book today!

Vote in our Poll


The materials at this web site are maintained for the sole purpose of providing general information about fiduciary law, tax accounting and investments and do not under any circumstances constitute legal, accounting or investment advice. You should not act or refrain from acting based on these materials without first obtaining the advice of an appropriate professional. Please carefully read the terms and conditions for using this site. This website contains links to third-party websites. We are not responsible for, and make no representations or endorsements with respect to, third-party websites, or with respect to any information, products or services that may be provided by or through such websites.