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What do you think of our site upgrade? Trending Topics for ERISA Plan Sponsors: Week Ending 4/5/19 Trending Topics for ERISA Plan Sponsors: Week Ending 4/5/19
April 08
00:03 2019

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:
How 401k Plan Sponsors Can Mitigate Fiduciary Liability Associated with Target Date Funds,” (, April 2, 2019) There are two strategic paths to use when it comes reducing liability. One approach occurs after the fact – after the target date funds are already in place. The other approach takes place before the target date funds are even placed on the 401k plan menu. Which is more reliable?

Compliance – New Regulator Guidelines:
The difference between a regulation and a guideline can best be explained by an attorney. And that explanation is best done before the regulators come knocking at the door.
Updated Operational Compliance List Includes Hardship Withdrawal Changes,” (PLANADVISER, April 2, 2019) A must read for anyone who thinks this may be relevant to them. And if you’re not sure, then read it to be sure.
IRS Discusses Ways ESOPs Can Prevent Violation of Nonallocation Year Rules,” (PLANADVISER, April 3, 2019) The helping hand.

Fiduciary – Strange New Fiduciary Worlds:
Once we opened the Pandora’s Box of fiduciary, it was only a matter of time before it would come creeping into arenas we least expected. Is that a good thing or an annoying thing? Time will tell, but, until then, prepare yourself for a lot of whining.
Financial advisor Dave Grant: Being a fiduciary can be costly,” (Financial Planning, April 2, 2019) Here’s a real-live example. You may not agree with the final recommendation, but that’s not the point of the story.
Should Index Funds Be Bound by a Fiduciary Standard?” (Wealth Management, April 2, 2019) The headline sounds like a no-brainer. Read the article, and your brain might explode. This is all about infusing politics into the definition of fiduciary, regardless of what the person quoted in the article says. Additionally, the article doesn’t address a true fiduciary obligation, it is using index funds to foist proxy voting policies into a politically correct systematology. This is probably not the road we should head down.
The NeverEnding Story—Reg BI and the Latest Fiduciary Folly,” (401K Specialist, April 5, 2019) The  title gives it all away.

Fees – Some Clarity and More Confusion:
As we finally reach the definitive end of one celebrated case, a single state, in the name of clarity, seeks s requirement that may lead to confusing redundancy.
Landmark 401k excessive fee case will settle for $55 million,” (BenefitsPRO, March 29, 2019) This was one of the granddaddies of them all. Here’s the low-down.
Tussey vs. ABB Fee Litigation Saga Draws to a Close,” (PLANADVISER, March 29, 2019) What did we learn from it? The article explores the answer.
401k fees can eat into retirement savings. How much is too much?” (Business Insider, April 2, 2019) It’s not throw-back-Thursday but it may as well be. Remember when we used to see articles like this almost every day?
Massachusetts Beats SEC With One-Page Fee Disclosure,” (Financial Advisor, April 4, 2019) This could be interesting. Not sure if it’s not just a cover to promote Fidelity, though.
Galvin Seeks Feedback on Fee Table for Advisors in Massachusetts,” (ThinkAdvisor, April 4, 2019) This article brings up an interesting point. For RIAs, this measure is redundant. What goes unsaid is whether Galvin is really targeting brokers.

Investments – What’s on the Menu?:
Is this dine in or take out? As in, are the expected returned good enough to eat or will they take you out of contention when it comes to a comfortable retirement?
Major Trends in 401k Fund Menus,” (401K Specialist, April 1, 2019) A fairly comprehensive overview for those not yet fully up to speed.
Testing Warren Buffett’s suggested retirement portfolio,” (Financial Planning, April 3, 2019) The blended portfolio protects better on the downside, the pure index fund portfolio offers a higher return on average. Pick your poison.
Due diligence is a piece of cake – unless you don’t do it – Carosa,” (BenefitsPRO, April 3, 2019) Yeah, so just do it.

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.
Landmark 401k excessive fee case will settle for $55 million,” (BenefitsPRO, March 29, 2019)
Employers Trust 401k Firms Over Government on Retirement Plans,” (401K Specialist, April 1, 2019)
What can be done to help older workers prepare for retirement?” (Employee Benefit News, April 1, 2019)
Affirmation of Teets vs. Great-West Shows ERISA Liability Limits,” (PLANADVISER, April 1, 2019)
Companies are making it harder for workers to not save for the future,” (CNBC, April 2, 2019)
Smaller employers take on financial wellness,” (Employee Benefit News, April 2, 2019)
George Washington University Faces ERISA Hearing,” (PLANADVISER, April 3, 2019)
BMW Driving Employees to 401ks,” (401K Specialist, April 3, 2019)
Small Business Owners Prefer Financial Service Companies to Manage Retirement Plans,” (PLANADVISER, April 3, 2019)
Workers are overly optimistic in retirement says Natixis,” (Employee Benefit News, April 4, 2019)
Plan Design, Education and Advice Can Improve Participant Retirement Savings,” (PLANADVISER, April 4, 2018)
What Retirement Plan Participants Want, Need,” (ThinkAdvisor, April 4, 2019)
Tailoring Plan Designs to Reflect Shorter Employee Tenure,” (PLANADVISER, April 4, 2019)
Plan Design, Education and Advice Can Improve Participant Retirement Savings,” (PLANADVISER, April 4, 2019)

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.
Got an IRA? Forget taking this tax break on your 2018 return,” (CNBC, March 25, 2019)
When Retirees Should Take Required Minimum Distribution,” (Money, March 25, 2019)
5 places to retire where you can feel rich, yet live on a budget,” (CNBC, March 29, 2019)
Social Security, IRA, and Tax Mistakes to Avoid when Planning Retirement,” (USA Today, March 30, 2019)
Healthier Economy Brings Out Retirement Concerns,” (PLANADVISER, April 1, 2019)
Teach millennials why not to cash out retirement 401k,” (Employee Benefit News, April 1, 2019)
Ed Slott on how to avoid costly IRA rollover mistakes,” (Financial Planning, April 1, 2019)
Concerns Grow About Converting 401k Savings to Income,” (401K Specialist, April 1, 2019)
Moving In With Mom and Dad,” (Financial Advisor, April 1, 2019)
Half of Older Americans Have Nothing in DC Plans, IRAs,” (ThinkAdvisor, April 2, 2019)
Busy Millennials With Side Hustles May Miss Out On This Overlooked Benefit,” (Forbes, April 2, 2019)
Despite Market-Buoyed 401k Balances, Plan Participant Anxieties Are Rising,” (Financial Advisor, April 2, 2019)
Financial Literacy Leads to Better Retirement Planning,” (PLANADVISER, April 2, 2019)
How Your Clients Can Use Their IRAs To Make Charitable Donations,” (Financial Advisor, April 3, 2019)
Which Should You Fund First: Your 401k Or IRA?” (Forbes, April 3, 2019)
Millennials Offer Opportunity to Provide Investing Help,” (PLANADVISER, April 3, 2019)
Americans Find A New Definition Of Retirement,” (Financial Advisor, April 3, 2019)
More Older Women Are Working To Fund Retirement And Unexpected Expenses,” (Financial Advisor, April 4, 2019)
You’re Not Putting Aside Enough For Retirement,” (Financial Advisor, April 4, 2019)

Wisdom from Some of Our Favorite Blogs:
The Rosenbaum Law Firm P.C. Blog: Lawsuits against Fidelity piling on |
The Rosenbaum Law Firm P.C. Blog: One of the biggest problems is unmet expectations |
The Rosenbaum Law Firm P.C. Blog: As an advisor, it’s not just about fees and fiduciary duty |
Squared Away Blog: Retirees Ration or Forgo Dental Care |
RetirementRevised: Government weighs social-media snooping to detect Social Security fraud |
Ary Rosenbaum: A Plan Provider’s Guide On How Not To Die (Sorry Lois) |

Hot Tips from Popular Web Resources:
National Association of Plan Advisors: CalSavers Clears ERISA Preemption – For Now |
National Association of Plan Advisors: Could Retirement Reform Bypass MEPs? |
National Association of Plan Advisors: Average 401k Closes March Like a Lion |
The Motley Fool: 62% of Americans Aren’t Aware of This Important IRA Rule |
Kiplinger: It’s Not Too Late to Boost Retirement Savings for 2018 |
National Association of Plan Advisors: PSCA Launches Innovative New Education Program, Credential for Plan Sponsors |
National Association of Plan Advisors: RESA Resurfaces in Senate |
National Association of Plan Advisors: NJ Governor Signs Secure Choice Legislation |
National Association of Plan Advisors: National Association of Plan Advisors: Ways & Means Moves Comprehensive Retirement Reforms Forward |
National Association of Plan Advisors: Case of the Week: 401k After-Tax Contributions Are ‘Testy’ |
National Association of Plan Advisors: Retiree Health Care Cost Climbs |
National Association of Plan Advisors: HSA Growth Continues, But at Reduced Pace |
National Association of Plan Advisors: Maryland Fiduciary Bill (Unfavorably) Fades Away |
National Association of Plan Advisors: Allison Lee Gets Nod for SEC Commissioner Post | How To Talk To Yourself About Retirement |
National Association of Plan Advisors: Legislation Mandating 401k Contributions Introduced |
National Association of Plan Advisors: READER POLL: Stress ‘Tests’ NAPA-Net Readers |
National Association of Plan Advisors: The Steel State Takes Aim at Auto-IRA Program |
National Association of Plan Advisors: ARA Calls for Examination of Expensing Retirement Plan Design Costs |

Miss anything? Feel free to add a comment below.

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Christopher Carosa, CTFA

Christopher Carosa, CTFA

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