The Rosenbaum Law Firm P.C. Blog

For 14 years now, I have had an ERISA practice of my own and my favorite part of the job is meeting people across the retirement plan industry. Part of my practice is helping advisors and third-party administrators (TPAs) with free content they could use and the answering of a question or two, on the house.

So what drives me nuts is when I get contacted by a new advisor and their only concern is getting my business to be a client of theirs or that I have referrals for them. First off, I handle my assets and second, if I have clients to refer to advisors and TPAs, I’m going to refer it to advisors I have known for years, and not someone I just connected to on, LinkedIn.

The retirement plan business is relationship-driven. That means building relationships, that take time and effort, not something that can be created out of thin air, in a day.

I had a running joke about places I’d work where I felt the only way they’d tell you that the business closed was by letting you know after the doors closed. We were the last to know anything.

With the news of the Chase data breach, make sure any plan providers advise you of any data breach on their end. As someone who hired them, there is some culpability and you don’t want to be on the hook for something that you are unaware of.

You work for a company, you want benefits. When I worked for others, what I wanted was a retirement plan.

So it comes as no shock that people want any type of retirement coverage, even if it is state-run, according to a study from the National Institute on Retirement Security (NIRS).

According to the study, 77% agree that a state-run program is a good idea. 82 % of Americans said they would participate in state-facilitated retirement programs, a rise from 75% just four years prior in 2020. The sentiment is held across all party lines, with 86% of Democrats, 74% of Republicans, and 71% of Independents showing strong support for state-wide retirement programs.

I like state plans because they increase retirement plan coverage and that could certainly spur employers to have plans of their own if mandated to offer one, or join a pooled employer plan.

They have been around for a long time and while I. think they can be beneficial, managed 401(k) accounts could certainly use a rebrand.

A recent PlanAdviser article asked if there should be a rebrand for this service and I think it should. I don’t think the name for it, truly shows what it is, and doesn’t fully engage participants who should consider using such a service. There is such a large group of participants who could use the help, and I think there is a disconnect for them, as to why getting investment expertise at a low fee, is a good thing.

It was great hosting a live event again. I didn’t hold any live edition of That 401(k) Conference because people didn’t want to attend or sponsor the location I came up with (Detroit and Oakland) and Yankee Stadium was incommunicado (we’re back live there on June 7th).

It was well attended and I had people who wanted to take pictures with me on the field like I was some celebrity. I even had plan providers, who sponsored the event, say nice things about me, one calling me an icon.

As someone who didn’t get many compliments from family members or the bosses at work while lesser people did (see my article on the “prop up”), I try to downplay the compliments. Listen, I’m just doing my job, working with clients and knocking out content that plan providers use for their business. As I have been trying to do for the last few years, I should complain less and enjoy the moment.

People compliment on the good work you do, don’t downplay it, like you’re supposed to do your job, but accept the compliments because the nature of people is to complain more than compliment.

It was great hosting a live event again. I didn’t hold any live edition of That 401(k) Conference because people didn’t want to attend or sponsor the location I came up with (Detroit and Oakland) and Yankee Stadium was incommunicado (we’re back live there on June 7th).

It was well attended and I had people who wanted to take pictures with me on the field, like I was some celebrity. I even had plan providers, who sponsored the event, say nice things about me, one calling me an icon.

As someone who didn’t get many compliments from family members or the bosses at work while lesser people did (see my article on the “prop up”), I try to downplay the compliments. Listen, I’m just doing my job, working with clients and knocking out content that plan providers use for their business. As I have been trying to do for the last few years, I should complain less and enjoy the moment.

People compliment on the good work you do, don’t downplay it, like you’re supposed to do your job, but accept the compliments because the nature of people is to complain more than compliment.

The new fiduciary rule, which had its final rule, published, got its first lawsuit.

The Federation of Americans for Consumer Choice (FACC), along with several independent insurance agents, filed a lawsuit in the U.S. District Court for the Eastern District of Texas against the Department of Labor (DOL).

FACC says it will seek a preliminary injunction to stop the new rule from taking effect while the case is contested.

FACC claims that by implementing a new fiduciary rule, the DOL has violated the Fifth Circuit’s 2018 rule that had vacated the department’s previous 2016 fiduciary legislation. Expect more litigation down the pike.

I’m not a fan of abuses in the retirement plan space. I called for fee disclosures before it was vogue and I always saw abuses in the rollover space. I always felt that advisors could try to steer participants into products that would net them a higher commission.

Prohibited Transaction Exemption (PTE 2020-02) has required, concerning rollover recommendations, disclosures as to why a rollover recommendation is in the best interest of the retirement investor. This requirement applied regardless of whether the rollover was made from an ERISA-covered plan or an IRA.

The new fiduciary rule will provide that the rollover disclosure requirement is only applicable in connection with a recommendation to rollover from an ERISA-covered plan or a recommendation to invest assets following a rollover from an ERISA-covered plan. So it won’t apply in connection with a recommendation to rollover from one IRA to another. That makes sense.

The new fiduciary rule will also require that Financial Institutions document and disclose: (a) the retirement investor’s alternatives to a rollover, including leaving the money in their current retirement plan, if applicable; (b) the fees and expenses associated with both the plan and the recommended investment or account; (c) whether the plan sponsor pays for some or all of the plan’s administrative expenses; and (d) the different levels of services and investments available under the plan and the recommended investment or account.

Cybersecurity on all levels is one of the biggest threats out there that everyone in the 401(k) space needs to be tackled.

J.P. Morgan Chase has been hit with a data breach exposing the personal information of more than 451,000 retirement plan participants.

The participant information that was exposed included participants’ names, addresses, Social Security numbers, payment and deduction amounts, as well as bank routing and account numbers if the participants had set up direct deposit.

The breach was not part of a cyberattack and there is no indication of data misuse, according to a J.P. Morgan spokesperson.

Chase learned of a software issue that caused certain reports run by three authorized system users to include plan participant information.

That 401(k) Conference first started in 2018 and Arlington, Texas is the first city to have the event twice. On May 3rd, it was held at Globe Life Field, across the street from AT&T stadium, which hosted the event in December 2019.

Even after COVID, the crowd this time was larger. Dave Valle was a great guest. The stadium tour was fun, and many thanks to our sponsors.

We return live at Yankee Stadium on Friday, June 7th. Details on this site to be a part of it.