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Ret plan investments - misc

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Target, Microsoft Lead Move Away from 401(k) Stock Investments
"In the last five years, some of the country's largest employers have taken steps to reduce or eliminate the company stock held in their retirement plans ... Costco, UBS, and others have limited the amount of company stock workers can hold by imposing caps ranging between 10 and 50 percent of a worker's 401(k) balance. Chevron, Verizon, and Tiffany & Co. have ended their practice of using company stock to make matching 401(k) contributions. Target and Microsoft are among the companies barring employees from acquiring new shares of stock in their retirement accounts." (Bloomberg BNA)
What's Next for the DOL Fiduciary Rule?
"DOL staff are rumored to be hard at work collecting data on the Obama-era fiduciary rule in order to potentially amend the more onerous aspects. In light of the court decision, Labor Secretary Alexander Acosta has a different decision to make: Does the department appeal the ruling? ... [O]ther immediate impacts ... [1] Watch the SEC.... [3] The industry no longer has to fear a regulatory action like the one William Galvin, secretary of the Commonwealth of Massachusetts, filed against Scottrade in mid-February.... [3] Suddenly, the National Association of Insurance Commissioners' March 24 meeting to possibly finalize a best-interest standard looms much larger." [Chamber of Commerce of the United States of America, et al. v. DOL, No. 17-10238 (5th Cir. Mar. 15, 2018)] (
Interesting Angles on the DOL's Fiduciary Rule, Part 83
"When will, or could, a recommendation of a higher-cost share class (and, therefore, a more expensive investment) satisfy the best interest standard of care (that is, the prudent person rule and the duty of loyalty)? What kind of disclosure of 12b-1 fees would be adequate under the fiduciary rule?" (
Fifth Circuit Opinion Vacating DOL Fiduciary Rule (PDF)
65 pages. "DOL has made no secret of its intent to transform the trillion-dollar market for IRA investments, annuities and insurance products, and to regulate in a new way the thousands of people and organizations working in that market. Large portions of the financial services and insurance industries have been 'woke' by the Fiduciary Rule and BIC Exemption. DOL utilized two transformative devices: it reinterpreted the forty-year old term 'investment advice fiduciary' and exploited an exemption provision into a comprehensive regulatory framework. As in the UARG case, DOL found 'in a long-extant statute an unheralded power to regulate a significant portion of the American economy.' And, although lacking direct regulatory authority over IRA 'fiduciaries,' DOL impermissibly bootstrapped what should have been safe harbor criteria into 'backdoor regulation.' ... The Fiduciary Rule thus bears hallmarks of 'unreasonableness' under Chevron Step Two and arbitrary and capricious exercises of administrative power.

"DOL makes no argument concerning severability of the provisions making up the Fiduciary Rule and BICE exemption apart from the illegal arbitration waiver. In any event, this comprehensive regulatory package is plainly not amenable to severance. Based on the foregoing discussion, we REVERSE the judgment of the district court and VACATE the Fiduciary Rule in toto."

[Chamber of Commerce of the United States of America, et al. v. DOL, No. 17-10238 (5th Cir. Mar. 15, 2018)] (U.S. Court of Appeals for the Fifth Circuit)

401(k) Fiduciaries: Is It Time to Hone Your Processes?
"Establish and run processes that demonstrate they have leveraged the lowest cost fees based on their plan size and servicing needs. If the fees their plan pays exceed market norms, they need to be able to show why the fees are reasonable.... Articulate why one investment was chosen over the other. Dig down deeper in understanding whether actual fund plan investments align with investment objectives." (Fiduciary Plan Governance, LLC)
Voya Escapes Lawsuit Over 401(k) Robo-Adviser Fees
"A 401(k) investor who accused Voya Financial Inc. and its subsidiaries of overcharging for investment advice from robo-adviser Financial Engines Advisors LLC won't get another chance to make her case. A federal judge on March 13 denied the investor's request to amend her complaint ... The judge reiterated her prior conclusion that the investor couldn't use [ERISA] to challenge these fees, because the defendants weren't acting as ERISA fiduciaries when negotiating fees with Financial Engines." (Bloomberg BNA)
[Opinion] Retirement Risk: Don't Trade Downside Protection for More Upside
"The challenge with the Fidelity glide path isn't so much that they are suggesting a bad portfolio ... [T]hey are recommending a portfolio with a risk/reward tradeoff that is well above the level necessary for the participant profile their glide path is designed for.... To the extent that the anticipated level of reward is well above what is called for by the participant profile, participants are likely to experience greater risk and more potential regret than necessary." (Russell Investments)
NAIC to Huddle on Contentious Best Interest Model Law
"The Annuity Suitability Working Group will discuss their next steps after a recent comment period on the regulation. Critics from both sides have panned the attempt to deliver a best-interest standard.... NAIC model laws must then be adopted by a state before they are applicable. Several states, however, are not waiting. New York, Nevada, New Jersey and Connecticut are a few states where the fiduciary, best-interest standard is winning votes." (
[Opinion] Avoiding 'Lipstick on a Pig': Evidence-Based Investing for ERISA Fiduciaries
"[G]oing forward, expect to see the plaintiff's bar focus additional attention on the issue of a fiduciary's duty to be cost efficient and the closet index issue, as the evidence overwhelmingly establishes the failure of most actively managed funds to meet such hurdles.... Is any compensation 'reasonable' or in the 'best interest' of a customer if the historical performance ... indicated that such investments were not cost efficient and/or would have failed to provide any inherent value for a customer ... at the time the recommendations were made? " (The Prudent Investment Fiduciary Rules)
Made to Measure: Evaluating the Impact of a Retirement Managed Account (PDF)
16 pages. "Many defined contribution plans today offer a managed account option. Yet there is no standard method for valuing these accounts that considers the full range of potential product features and their financial impact.... [This whitepaper presents] a method for valuing managed accounts ... [and] delineate[s] the menu of features that may be offered through a managed account investment option in a defined contribution plan." (Great-West Financial and Empower Retirement)
'Patent Troll' 401(k) Investment Leads to $180k Settlement
"The deal resolves a lawsuit claiming Emerald Coast Eye Institute and its founder, Dr. Samuel Poppell, directed a significant portion of the 401(k) plan's assets into the stock of VirnetX, a company that allegedly specialized in acquiring patents and attempting to bring litigation against violators of those patents. Poppell, who allegedly had no background in investment management, learned of VirnetX through 'online message boards and unqualified or speculative investment blog-type websites,' according to the lawsuit." (Bloomberg BNA)
SunTrust Agrees to Pay $4.75M to Settle 401(k) Stock Drop Case
"If approved, the proposed settlement would end a 10-year lawsuit accusing SunTrust of breaching its fiduciary duties under [ERISA], when plan participants lost hundreds of millions of dollars as the market price of SunTrust stock fell 73 percent between May 2007 and October 2009.... The proposed deal would also provide plan participants with ... quicker vesting on matching contributions and a guarantee that the vesting schedule won't change to a less generous one for a period of at least three years. SunTrust also agreed to fund matching contributions in cash and enhance training for its fiduciary committee[.]" (Bloomberg BNA)
How to Generate Retirement Cash Flow by Rebalancing
"A trap some retirees can fall into when it comes to retirement income planning is limiting their strategy to interest and dividends and neglecting the power of rebalancing to capture portfolio growth as an additional income source." (Charles Schwab)
Fidelity Puts 6 Million Savers on Risky Path to Retirement
"While deposits in the trillion-dollar sector have surged, Fidelity has seen nearly $16 billion in net withdrawals over the past four years ... The exodus stems in part from unease with the way Boston-based Fidelity has boosted performance -- by ramping up risk.... Fidelity portfolio managers now try to time market shifts, for instance by moving billions of dollars out of money-losing commodities bets and into Chinese stocks and U.S. tech shares[.]" (Reuters)
Should Plan Sponsors Consider Investing Retirement Plan Assets in Bitcoin? (PDF)
"Because cryptocurrency cannot be held and only exists as a few lines of computer code, the chance of it vanishing completely would be a concern to a plan sponsor who must have assets independently in the custody of a trust company.... One of the biggest challenges of bitcoin is its intangible nature.... Plan sponsors have to be able to know they own a particular asset and can value it in an accurate and timely fashion.... Cryptocurrencies remain a significant target for hackers and thieves." (Milliman)
Ninth Circuit: Plan Service Provider Not Subject to Fiduciary Duties When Negotiating Fees or Collecting Predetermined Compensation
"According to the court, ... claims that fully disclosed fee agreements are unreasonable lie against the hiring fiduciary, not the provider.... [T]he court dismissed claims related to the revenue-sharing payments because they were fully disclosed before the provider agreements were signed and did not come from plan assets. Finally, the court held that the provider's withdrawal of its predetermined, formula-driven fees from pooled accounts was a ministerial act that did not give rise to fiduciary liability." [Santomenno v. Transamerica Life Ins. Co., No. 16-56418 (9th Cir. Feb. 23, 2018)] (Thomson Reuters / EBIA)
Massachusetts Launches Investigation Into Wells Fargo Advisors Sales Practices
"Wells Fargo itself disclosed in a recent regulatory filing that it is 'assessing whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company's investment and fiduciary services business' ... [The Massachusetts Secretary of the Commonwealth] is seeking additional information to determine the scope of Wells Fargo's internal investigation as well as reasonable assurances that any Massachusetts investors affected by unsuitable recommendations will be made whole." (Financial Advisor)
Investment Advisers and Conflicts of Interest
"[The] Share Class Selection Disclosure Initiative ... continues the SEC's focus on investment advisers who receive compensation or financial incentives in connection with their selection or recommendation of mutual fund share classes. For employers that sponsor retirement plans, the Initiative also raises the issue of whether plan fiduciaries, who engage the services of an investment adviser, have the appropriate information to fulfill their fiduciary obligations." (Spencer Fane)
401(k) Fiduciaries: Is It Time to Hone Your Processes?
"Last year's litigation ... attacks 401(k) fiduciaries on the quality of their process and on outcome. The fiduciaries that were sued last year were for the most part doing what their lawyers told them to do. They followed a 'prudent process stratagem' and entered into pretty low cost arrangements but they still got hammered with a lawsuit." (Fiduciary Plan Governance, LLC)
Trap for the Unwary: Family Members as Investment Advisors for IRAs and Plans
"[If], for example, a mother asks her son, who is an advisor at a broker-dealer, to manage her IRA, any compensation paid to the son would be a prohibited transaction. That is, the mother is causing a family member -- a person in whom she presumably has an interest that could affect her fiduciary judgment -- to receive compensation. The consequences are harsh." (Drinker Biddle)
Understanding the DOL Fiduciary Rule: An Exception for Certain Large Independent Fiduciaries
"Though the phased implementation period ultimately may be further extended, plan sponsors will want to become familiar now with the new fiduciary rule and exemptions, as well as the exception. While attempts by advisers to avoid fiduciary responsibility are not new, the investment adviser currently can avoid acceptance of fiduciary responsibility and hope that it stays with a sophisticated plan fiduciary by incorporating the exception's terms into his or her agreements." (HR Daily Advisor)
Aggregate Funded Ratio for Corporate Pension Plans Decreased in February (PDF)
"The aggregate funded ratio for U.S. corporate pension plans decreased by 0.7 percentage points to end the month of February at 88.2 percent, and up 6.1 percentage points over the trailing twelve months ... The monthly change in funding resulted from a 3.3% decrease in liability values, which was more than offset by a 4.1% decrease in asset values. Despite February's decline, the aggregate funded ratio is up 3.6 and 6.1 percentage points year-to-date and over the trailing twelve months, respectively." (Wilshire Associates)
Interesting Angles on the DOL's Fiduciary Rule, Part 82
"On February 12, 2018, the SEC announced a remedial program called the 'Share Class Selection Disclosure Initiative' (SCSDI) ... [which allows] investment advisers who have received undisclosed 12b-1 fees can correct and self-report.... [W]hat are the consequences under the Fiduciary Rule (which became applicable on June 9, 2017) for advisory services to IRAs, where an investment adviser receives undisclosed 12b-1 fees? ... [T]he Fiduciary Rule is more demanding for discretionary investment management than the SEC rules are.... [T]he DOL Fiduciary Rule for non-discretionary advice is similar to the SEC's, but still more demanding." (
Pension Finance Watch, February 2018
"In a dynamic February for the capital markets, significant changes offset to produce little net impact ... Interest rates increased markedly, equity returns were sharply negative and the Index ticked up 0.1% to 78.8." (Willis Towers Watson)
Supply and Demand in the Markets and the Retirement Saver's Best Interest
"The fiduciary who can effortlessly and clearly explain the mechanism of supply and demand no doubt helps retirement savers embrace their best interests.... Retirement savers must maintain long-term orientation regarding their assets. Supply and demand shock and generally easy to identify and often temporary in nature. During these kind of extreme events, in most cases, doing nothing is the best road to take." (Fiduciary News)
Startup Offers Annuities Online on a Subscription Plan
"[D]eferred income annuities ... typically require five- or six-digit sums in return for a future stream that, should someone die prematurely, may never be used. [Blueprint's] website spits out a quote for a contract in 60 seconds and requires an initial investment of $5,000. The real twist is part of a trend that's swept industries from mattresses to clothing to movies: subscription-based business models." (InvestmentNews)
How to Cope with Stock Market Declines in Retirement
"Shift to more conservative investments.... Create a cash reserve.... Avoid emotional investment decisions.... Continue to invest." (U.S. News & World Report)
ESOP Sponsor's Board of Directors Sued Over Company Stock
"The company stock held in Lifetouch's ESOP declined by more than $840 million between 2015 and 2018, representing an average loss of more than $22,000 in retirement savings for each of the plan's 16,000 investors, according to the lawsuit. This decline happened while several Lifetouch executives retired and cashed out their stock at favorable prices, the lawsuit claims." (Bloomberg BNA)
Wells Fargo's Wealth Management Unit Attracts Justice Department Attention
"The Justice Department in late 2017 told the bank to conduct an independent investigation of its wealth-management business ... The bank said the board's review is assessing 'whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company's investment and fiduciary services business.' " (The Wall Street Journal; subscription may be required)
Pension Finance Update, February 2018
"February was a difficult month for investments, but a so-so month for pension finance due to higher interest rates. Both model pension plans ... were close to flat last month. For the year, Plan A remains 5% ahead, while Plan B is up 1%[.]" (October Three Consulting)
Single Premium Pension Buy-Out Sales Nearly Double in the Fourth Consecutive Quarter
"U.S. single premium pension buy-out product sales were $11.1 billion in the fourth quarter of 2017, a 96 percent increase compared with fourth quarter 2016 results. This is first time that fourth quarter buy-out sales have surpassed $10 billion in the last 5 years and the 11th consecutive quarter of sales over $1 billion ... In 2017, single premium buy-out product sales were $23 billion, 68 percent higher than 2016." (LIMRA)
$20 Billion Club's Record-Breaking Year
"The 20 members of the $20 billion club, representing 40% of the global DB liabilities among US-listed corporations, didn't just add on to 2016 contribution totals, they doubled them. They nearly tripled 2015 contributions. Combined with their highest recorded investment earnings, pension assets increased by around $85 billion for this group and offset a 45 bps drop in discount rates. This led to an average 5% improvement in funded ratio and $32 billion reduction in the funding deficit." (Russell Investments)
Defined Contribution Plans Have Come a Long Way! (PDF)
"DB funds outperformed DC plans by 0.46% from 2007-2016, a substantial narrowing of the gap from the 1.80% net return difference from 1998-2005.... 8-year (1998-2005) average holdings of cash, stable value and company stock [for DC plans were] 41% compared to the corresponding 8-year average of 1% for DB plans.... In 1998, these assets represented on average 44% of the holdings in the DC plans. In 2016, they represent 25%, a sizable reduction." (CEM Benchmarking)
Reduce Market Volatility with LDI
"Expectation of rising interest rates is often cited as a reason to postpone implementing an LDI strategy.... Hesitancy to exit a one-directional bull market is another. These are certainly valid thoughts, particularly for underfunded plans. But if the correction indeed signals the dawn of a new era, one of rising rates and increased equity volatility, LDI may be worth another look." (The Principal Blog)
Interesting Angles on the DOL's Fiduciary Rule, Part 81
"The myth for this post is the oft-repeated statement that the Fiduciary Rule prohibits the payment of commissions.... Under transition BICE, there is only one explicit restriction on compensation. That is that advisors and their financial institutions can receive no more than reasonable compensation for their services." (
How Is Liability-Driven Investing Different?
"An LDI approach forces us to examine our investment and funding assumptions on an ongoing basis -- and to make adjustments. Because an LDI approach starts with an identified liability or funding target, compares it with the current value of available assets and challenges us to figure the best way to achieve that goal, it makes us carefully evaluate the assumptions we have made as part of our plan." (Best Best & Krieger LLP)
Appeals Court Orders Fiduciary Breach Case Against Transamerica to Be Dismissed
"In a complex case that dates back to 2011, the three-judge appeals court panel reversed a ruling by a U.S. District Court judge in Los Angeles that had supported the plaintiffs.... Plaintiffs argued that Transamerica had violated its fiduciary duties by offering certain investment options by Transamerica affiliates in a group annuity contract.... Transamerica maintained that it wasn't a fiduciary regarding the terms of its own compensation." [Santomenno v. Transamerica Life Ins. Co., No. 16-56418 (9th Cir. Feb. 23, 2018)] (Pensions & Investments)
Retirement Plan Best Practices: Plan Monitoring (PDF)
14 pages. "Monitoring your investment menu managers, your plan providers, and plan fees is an important part of your overall fiduciary responsibility. Plan sponsors vary widely in how they monitor their plans. What are best practices, and what standards should you be following in your monitoring practices?" (Arnerich Massena)
Fairytale Ending for Defendants in the First Stable Value Fund Appeal
"Plaintiffs' loyalty theory largely centered on the assertion that Fidelity prioritized its interest in securing wrap insurance over the beneficiaries' interest in higher returns. But by publishing a more conservative benchmark than its peers, Fidelity risked market share as there were 'innumerable options available.' ... What the court did ... essentially gutted the logical core of any argument that a stable value fund is too conservative. Those arguments, the court underscored, impermissibly rely on hindsight." [Ellis v. Fidelity Mgmt. Trust Co., No. 17-1693 (1st Cir. Feb. 21, 2018)] (Mayer Brown)
[Opinion] American Benefits Council Letter to EBSA on ERISA Preemption of State Fiduciary Rules
"State fiduciary rules, like the one enacted in Nevada, are clearly preempted by ERISA.... ERISA defines who is a fiduciary, details that standard of care, and creates its own enforcement mechanisms through DOL, the IRS, and federal courts. States cannot add any new or additional requirements to that comprehensive system if their regulation 'relates to' an employee benefit plan." (American Benefits Council)
SEC Chairman Jay Clayton Outlines Goals for a New Fiduciary Standard
"Mr. Clayton did not offer any details on what an SEC fiduciary rule might look like. He did reiterate that he wants an advice regulation to clarify for investors what standard of care they receive from investment advisers and brokers." (Pensions & Investments)
Notice to Financial Advisers: State Regulators Are Enforcing the DOL Fiduciary Rule
"The Complaint alleges that, although Scottrade added new policies to comply with the impartial conduct standards, Scottrade expanded the scale and scope of the sales practices that the new policies were designed to curtail.... The Complaint [further alleges] that Scottrade 'failed to take any meaningful steps to remove retirement assets from the scope of the contests or ensure compliance with the Fiduciary Rule.' " (Financial Services Employment Law, Epstein Becker Green)
Fiduciary Conduct Is Good for Business
"The focus on compliance obscures the compelling business case that fiduciary conduct [1] is what clients want, [2] is operationally efficient and reliable, [3] strengthens client-adviser relationships and makes them more enduring, [4] provides the adviser with greater pricing power, and [5] enhances the advisory firm's brand and market valuation." (InvestmentNews)
Will Australia's Advisor Competency Standards Come to the US?
"[M]uch like Australia served as an indicator for what regulation was to come [for financial advisors in the US] (with a fiduciary rule that took effect 5+ years ahead of the US), Australia's new adoption of competency standards for financial advisors may be a good indication of where the regulatory focus will be next in a post-fiduciary world in the US." (Nerd's Eye View)
Massachusetts Heats Up DOL Rule (PDF)
"While this is hardly the first case regarding a broker-dealer's use of incentives, it is the first enforcement action -- of any kind -- to incorporate the [DOL's] fiduciary rule. In light of the approach now demonstrated by a prominent securities regulator, financial firms should reassess existing controls and their compliance with internal procedures." (Winstead PC, via The Texas Lawbook)
Defined Contribution Plan Participants' Activities, First Three Quarters of 2017 (PDF)
"Defined contribution (DC) plan withdrawal activity in the first three quarters of 2017 remained low and was similar to the activity observed in the first three quarters of 2016.... The commitment to contribution activity in the first three quarters of 2017 continued at the high rate observed in the first three quarters of 2016.... Most DC plan participants stayed the course with their asset allocations as stock values increased over the first nine months of the year.... DC plan participants' loan activity was little changed at the end of September 2017." (Investment Company Institute [ICI])
Fidelity Stable Value Fund Suit Gets Final Dismissal from Appellate Court
"The appellate court notes that the primary investment objective of the MIP is to 'seek the preservation of capital as well as to provide a competitive level of income over time consistent with the preservation of capital.' As a benchmark, the MIP used the Barclay's Government/Credit 1-5 A- or better index throughout the relevant time period. The 1st Circuit points out that during the years covered by the lawsuit, the MIP fully achieved its objective of preserving the investors' capital." [Ellis vs. Fidelity Management Trust Co., No. 17-1693 (1st Cir. Feb. 21, 2018)] (planadviser)
[Guidance Overview] Interesting Angles on the DOL's Fiduciary Rule, Part 80
"[T]he non-enforcement policy does not give a free pass during the transition period. Instead, there are expectations about good faith efforts to comply with the Impartial Conduct Standards and about the adoption and application of policies, procedures and practices to mitigate the effects of conflicts of interest and incentive compensation." (
Should You Switch to an Unbundled Service Provider for Your Defined Contribution Plan?
"For plan sponsors focused intently on fiduciary considerations, ... bundled service providers also mean restricted investment selections and limited insight into the true costs of asset management and asset servicing. Neither of those plan components are without an associated cost, and the issue of costs and expenses has been the lynchpin in many recent lawsuits filed against plan sponsors." (BNY Mellon)
4Q Annuity Sales Show Market Moving on from Fiduciary Rule
"Fourth-quarter sales of fixed annuities fell 2 percent to $26.1 billion compared to the year-ago period, while sales of variable annuities also fell to 2 percent, to $24.7 billion[.]" (
Funds, Fees, and Annuities: A Guide to 403(b) Investment Options (PDF)
11 pages. "[W]hile annuity contracts were once the only option -- and still constitute a majority of the total assets nationwide -- there is a strong trend toward offering mutual funds as an alternative to annuities. In 2015 ... while 87.1% of 403(b) plans offered mutual funds as an investment option, only 58.6% offered annuities.... [A]dditional investment options are not likely to be permitted anytime soon." (Greensfelder)
Recent UBIT Change May Impact Benefit Plans as Investors
"Effective for tax years beginning after December 31, 2017, benefit plans with two or more unrelated trade or businesses will no longer be able to 'net' the income and losses of the businesses when determining the UBIT.... Many investment funds generate tax losses in early years, and with regular turnover of investments, UBIT can often be deferred for many years. Thus, the potential impact of the law could be significant." (Groom Law Group)
Massachusetts Brings Enforcement Action Against Brokerage Firm Based on Violations of Fiduciary Rule Compliance Policies
"The Complaint has garnered attention because it is the first enforcement action related to the Fiduciary Rule and also because it is part of a wave of state action (regulatory, legislative, and now enforcement) that sends a signal that if the DOL relaxes its requirements, states may step in. The Complaint also represents the first enforcement effort that relates to a financial institution's compliance with the Fiduciary Rule." (Groom Law Group)
Risk vs. Readiness: The 401(k) Plan Annuity Conundrum
"Annuities offer a guaranteed stream of retirement income that can provide life-long financial security. Yet fewer than 10 percent of plan sponsors have made any move to include annuities as a 401(k) investment option." (Society for Human Resource Management [SHRM])
Target Date Funds: Things to Consider
"This article addresses three major features common to most TDFs' structure: asset allocation (specifically, equity exposure), management style (including active and passive management, use of proprietary funds, and tactical asset allocation), and fees -- which, if not evaluated carefully and on a manager-by-manager basis, could result in a mismatch between an employer's goals and participant investment results." (P-Solve LLC)
Managed Accounts: 'You Can't Always Get What You Want'
"By taking into account factors such as outside assets, contribution levels, existence of a defined benefit plan, and risk tolerance, managed accounts offer participants the promise of a more personalized asset allocation.... [J]ust over half of plan sponsors offer a managed account solution, and nearly all who do offer it on an opt-in basis. But there are often limited choices when it comes to selecting a managed account provider, with recordkeepers typically offering only one or two options." (Callan)
[Opinion] Pensions and the Corporate Bond Supply
"Corporations are presumed to be less likely to issue debt in the future given the new corporate tax law. Pension plans, who like to use corporate bonds to hedge liabilities, are becoming better funded ... Better funding leads investors to shift asset allocations toward fixed income, which in turn presumably will significantly increase demand for corporate bonds, especially as plans close or freeze. What's a pension investor to do?" (Russell Investments)
Lawyer Fighting DOL Rule Blasts Scottrade Fiduciary Charges
"Eugene Scalia, ... who represents the nine plaintiffs suing the [DOL] over its fiduciary rule, told the U.S. Court of Appeals for the 5th Circuit on Friday that Massachusetts' action Thursday against Scottrade for allegedly violating the fiduciary rule's Impartial Conduct Standards is 'without merit,' and will spark 'private plaintiffs exploit the rule to concoct state law claims.' ... Among the nine plaintiffs that Scalia represents are the Securities Industry and Financial Markets Association [SIFMA], the Financial Services Institute and the U.S. Chamber of Commerce." (ThinkAdvisor)
Cybersecurity Identified as an SEC OCIE Examination Priority for 2018
"[T]he 2018 Exam Priorities make clear that OCIE's examinations will focus on governance, risk assessments, access rights and controls, data loss prevention, vendor management, training, and incident response.... OCIE will continue to work with firms in all sectors to identify and manage cybersecurity risks and to encourage other market participants to engage in this effort as well." (Data Matters, Sidley Austin LLP)

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