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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 10/27/17 Trending Topics for ERISA Plan Sponsors: Week Ending 10/27/17
October 30
00:04 2017

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:
Retirement Pros Reveal Worst Fears Regarding Tax Reform,” (, October 24, 2017) While much has been written of the lack of retirement savings among Americans, the most widely talked about change – lowering the cap on tax deductions – could exasperate the lack of retirement savings.

Compliance – To Cut the Cap, or Not to Cut the Cap:
Talk about outrageous slings and arrows. It’s getting so you don’t know which way it’s going. Even Richard Thaler seems confused by the whole thing.
GAO: U.S. retirement security imperiled by systemic challenges,” (BenefitsPRO, October 20, 2017) So why is anyone talking about anything that dissuades retirement saving?
Republicans want to slash tax deductions for your 401k. That’s actually a good idea!” (Los Angeles Times, October 23, 2017) Sure, the math on ROTHs is better, but only if you’ll be in a higher tax bracket when you retire. And – and this is a big “and” – if you save in the first place. Folks didn’t start saving for retirement in earnest until the advent of the 401k, despite the fact IRAs had already been in existence – and that was with the tax-deductible contributions to IRAs. The math might favor ROTHs (in limited circumstances), but the behavioral reality doesn’t.
Trump says there will be ‘no change’ to 401k plans,” (MarketWatch, October 23, 2017) This is why it’s so difficult to write serious news stories before the final version is inked and passed.
Lawmakers ‘Taking a Fresh Look’ at Savings Vehicles in Tax Reform,” (ThinkAdvisor, October 23, 2017) Unlike previous stories, the Chairman of the House Ways and Means Committee is now officially on the record saying any reform will be designed to encourage – not discourage – retirement savings. It’s amazing what 140 characters can do.
Nearly 1 in 5 Pension Plans Are Overfunded,” (ThinkAdvisor, October 24, 2017) Will this make them attractive takeover targets like it did in the 1980s?
EBRI’s numbers show how $2,400 Roth threshold would impact savers,” (BenefitsPRO, October 24, 2017) Before we get mad – and this should upset everyone – let’s see what really happens.
Congress: Consider these 401k improvements to help employees,” (Employee Benefit News, October 25, 2017) Not a bad idea.
Thaler, government accounting, and buying pants for your kids – Carosa,” (BenefitsPRO, October 25, 2017) If you want to know why Washington thinks it needs to “offset” tax cuts by increasing other taxes, it’s all here.
Retirement crisis affects NFL players too,” (BenefitsPRO, October 25, 2017) It’s really hard to feel sympathy for multi-millionaires who go broke in three years – and that’s before you even incorporate the general ill-will towards NFL players the nation is currently experiencing.
Nobel Laureate Richard Thaler backs lower 401k contribution limits,” (USA Today, October 26, 2017) Um… yes,… and no. While he said he backed the lower limit because there’s “no reason to subsidize saving by the rich,” he then went on to say the lower cap ($2,400) could be offset by a 10% deferral. Surely, Mr. Thaler, you must be joking if you think the average salary is $24,000.
EBRI Breaks Down Number Affected by Tax Reform Changes,” (PLANADVISER, October 26, 2017) As you would guess, the $2,400 cap would impact those earning more than $50,000 the most. It was also impact older workers more than younger workers (maybe because they earn more?). Of interest, more than a third of the people earning less than $25,000 would also be negatively affected by this.
That 401k Tax Break Shouldn’t Be Sacred,” (ThinkAdvisor, October 27, 2017) As they say, the perfect is the enemy of the good.

Fiduciary – More Talk, Less Action:
Talk might be cheap, but it’s less expensive than doing the wrong thing.
Pooling Investors Assets,” (PLANADVISER, September/October 2017) Be wary of the fiduciary implications.
Why Many Think a Uniform Fiduciary Rule Won’t Work,” (Financial Times, October 23, 2017) Of course it won’t work if you choose to rely solely on disclosure. Such a watered-down version isn’t a Rule at all. It’s merely a CYA for the industry and the regulators.
SEC Nominees Say Fiduciary Rule Isn’t Top Priority,” (ThinkAdvisor, October 24, 2017) Maybe not, but they sure are talking about it.

Fees – An Enigma Wrapped in a Riddle:
There is good and bad in everything, and everything is bad and good.
Why retainer fees pose questions for regulators,” (Financial Planning, October 20, 2017) Interesting. It may be harder to document the justification for retainer fees as opposed to more traditional fee models.

Investments – The Eternal Truth:
Here’s the thing about investing: There are many different approaches. In no case do any one of them always work. In general, though, over the long haul they’re all heading in the right direction. The problem only arises when you try to switch horses in mid-race. That’s when folks tend to crash and burn.
Investors Who Held Steady After the Great Recession Have Been Rewarded,” (PLANADVISER, October 26, 2017) You know what they say about Bulls and Bears making money, but Pigs always getting slaughtered.

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.
DCIO Assets Up 12% in the Past 12 Months,” (PLANADVISER, October 19, 2017)
PANC 2017: The Role of HSAs,” (PLANADVISER, October 19, 2017)
Mortality Rates Increased 1.2% Between 2014 and 2015,” (PLANADVISER, October 20, 2017)
Workers are retiring later, dying sooner and sicker in-between,” (Employee Benefit Adviser, October 23, 2017)
What the Heck is ‘Plan Failure’?” (Wealth Management, October 23, 2017)
More High Earners May Resort To Solo 401k Plans If GOP Adds Fourth Tax Bracket,” (Financial Advisor, October 23, 2017)
Why advisers should consider these often overlooked retirement plans,” (Employee Benefit Adviser, October 23, 2017)
Answering the Most Important Question for 401k Participants” (The 401(k) Specialist, October 23, 2017)
Retirement savings plans are using workers’ inertia to help them,” (Employee Benefit Adviser, October 24, 2017)
Why Financial Wellness is Everywhere at the Moment: 2017 Excel 401k,” (The 401(k) Specialist, October 24, 2017)
HSAs surge in popularity for tax savings,” (Financial Planning, October 24, 2017)
When should plan sponsors bring in an independent TPA?” (Employee Benefit News, October 24, 2017)
Why Multiple Employer Plans Are Getting So Much Attention,” (The 401(k) Specialist, October 24, 2017)
Retirement plan sponsors adapt to the new fiduciary rule,” (Employee Benefit News, October 24, 2017)
Developing More Effective Investment Committees,” (Wealth Management, October 25, 2017)
5 steps to a successful year-end retirement plan checkup,” (Employee Benefit Adviser, October 25, 2017)
Court Dismisses Case Challenging Xerox and Financial Engines Fee Arrangement,” (PLANADVISER, October 25, 2017)
Maran settlement to make ESOPs more expensive,” (BenefitsPRO, October 25, 2017)
Old-Fashioned Retirement Advice Still Works,” (Wealth Management, October 26, 2017)
Latest multiple employer retirement plans need clear strategy,” (Employee Benefit Adviser, October 26, 2017)
Multiple employer retirement plans need clear organizational strategy for compliance,” (Employee Benefit Adviser, October 26, 2017)
More Retirement Plans Add Auto-Enrollment, Auto-Escalation Features,” (ThinkAdvisor, October 27, 2017)

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.
PANC 2017: Financial Wellness,” (PLANADVISER, October 20, 2017)
Must clients choose retirement savings or paying student debt?” (Financial Planning, October 20, 2017)
Here’s how much more money you can put in your 401k in 2018,” (MarketWatch, October 21, 2017)
6 Steps You Can Take In Your 20s To Help You Retire Before 60,” (Forbes, October 21, 2017)
What to do with your 401k when you change jobs,” (CBS News, October 23, 2017)
Americans Carry an Average Debt Load That Impedes Retirement Savings,” (PLANADVISER, October 23, 2017)
Why Retirees Should Set Limits on Financial Largess With Family,” (Wall Street Journal, October 23, 2017)
Americans are saving poorly for retirement,” (CNBC, October 23, 2017)
Will Your Retirement Nest Egg Last Past 100?” (Forbes, October 24, 2017)
Working Past 70½? Skip the 401k RMD Without Penalty,” (ThinkAdvisor, October 24, 2017)
The Need to Save More Tops List of Reasons for Limiting Spending,” (PLANADVISER, October 25, 2017)
This couple went from workaholics to early retirees in six years,” (MarketWatch, October 25, 2017)
How to maximize your Social Security benefits, retirement savings,” (Fox Business, October 25, 2017)
Many Pre-Retirees Misjudge Their Coming Expenses,” (PLANADVISER, October 25, 2017)
Retirement: Why You Probably Won’t Spend as Much as You Expect,” (Fortune, October 25, 2017)
Here’s how motherhood affects your Social Security benefits,” (CNBC, October 25, 2017)
Your 401k plan could be a gold mine if you do these two simple things,” (MarketWatch, October 26, 2017)
What Really Happens To People When They Retire?” (Forbes, October 26, 2017)
How single people need to plan differently for retirement than couples do,” (MarketWatch, October 26, 2017)
The good news and bad news about America’s retirement accounts,” (MarketWatch, October 26, 2017)

Wisdom from Some of Our Favorite Blogs:
Squared Away Blog: 401k Nudges and Course Corrections |
The Rosenbaum Law Firm P.C. Blog: The $2,400 401k cap isn’t going to happen |
The Rosenbaum Law Firm P.C. Blog: Well here is where an advisory firm gets in trouble |
RetirementRevised: Getting a handle on what retirement plan failure really means |
Nerd’s Eye View: Spousal Rollover Rules For Inherited Roth & Traditional IRAs |
Fred Reish: Interesting Angles on the DOL’s Fiduciary Rule #67 |
Squared Away Blog: Gen-X, Millennials: Now is the Time |
The Rosenbaum Law Firm P.C. Blog: Don’t want to call an ERISA attorney? It’ll snowball |
The Rosenbaum Law Firm P.C. Blog: Don’t give good employees the wrong idea |
Data “Points”: Foreseeable Consequences |
Data “Points”: Behavioral Finance – the Next Frontier |

Hot Tips from Popular Web Resources:
NAPA Net: DCIOs on Upswing with Strong Asset Growth, Improving Sales |
NAPA Net: ARA Issues Retirement Policy Principles for Tax Reform |
NAPA Net: Massachusetts Bill Sets Sights on a State-Run Open MEP |
NAPA Net: The Impact of a Proposed Pre-Tax Contribution Cap |
Kiplinger: The Medigap Conundrum If You Take a Retirement Job |
NAPA Net: Will Trump’s Tweet Tweak Tax Reform Focus? |
NAPA Net: Forseeable Consequences |
NAPA Net: Are Your 408(b)(2) Disclosures Sufficient? |
NAPA Net: GAO Suggests Commission to Examine U.S. Retirement System |
The Motley Fool: 25% of Americans Say They’ll Never Be Able to Retire — 3 Signs You Might Be One of Them |
Kiplinger: Bonds Aren’t the Investment They Used to Be |
NAPA Net: Study Reinforces Benefits of Access to a 401k |
NAPA Net: Women’s Growing Role in Benefits and Retirement Decisions |
NAPA Net: Plaintiffs’ Counsel Fee Cut in Excessive Fee Case |
NAPA Net: It Pays to Consistently Participate in a 401k Plan |
The Motley Fool: 2018 Roth IRA Income Limits: What You Need to Know |
Kiplinger: Preparing Yourself for a Stock Market Downdraft |
NAPA Net: Are 401k Plans Off the Tax Reform Table – or Not? |
NAPA Net: The Trump-Era Fiduciary Rule |
NAPA Net: U.S. Receives ‘C’ Grade in Global Retirement Study |
Kiplinger: Do You Have a Written Financial Plan? |
The Motley Fool: Here’s the Top Reason Americans Don’t Feel Financially Secure About Retirement |
NAPA Net: Graff Warns of the Potential Impact of Tax Reform |
NAPA Net: Expanded HSAs Part of Proposed ACA Fix |
Kiplinger: Retirees, Start a Nonprofit to Serve a Need |

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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