Nevin's Data "Points"

A couple of weeks back, the Social Security Administration announced that, for the second year in a row—but only for the second time since 1975—there would be no cost of living adjustment (COLA) for Social Security recipients. Of course, this close to an election, it should come as no surprise that some went scurrying to introduce legislation that would provide some kind of supplemental funding to the nation’s seniors; similar actions were undertaken a year ago, ostensibly in the interests of economic stimulus, as well as the importance of supporting those on fixed incomes. But this election year is one unlike most, perhaps any, in our memory—and concerns about the federal budget deficit have, thus far, overcome the political class’s natural inclinations in such matters. Whether or not you are on a fixed income, it’s hard to credibly argue that prices aren’t rising on everything from food to gasoline to utilities; from real estate taxes (those reassessments never come as rapidly when

Last week the Labor Department issued a proposal that would, by its reckoning, provide the first update to the definition of an ERISA fiduciary since shortly after the birth of the federal regulation (see DoL Broadens Fiduciary Net ). The move was much-anticipated and, in the eyes of many, long overdue. Clearly, the Labor Department wanted to narrow the exceptions to that definition (that were, somewhat ironically, put in place by the Labor Department of 1975) and, in the process, subject more advisers to ERISA’s fiduciary standards. At a high level, the Labor Department is seeking to restore the two-part test for fiduciary status found in ERISA, one that was expanded to be a five-part test in the 1975 regulations. The proposal seeks to set aside the additional conditions that the advice be rendered “on a regular basis,” that the advice would serve as a “primary basis” for investment decisions with respect to plan assets, that the recommendations are individualized for the plan, and

Last week, the Department of Labor reissued its proposed regulation on participant fee disclosure. Those familiar with the last proposal (put out by the prior Administration—see “ EBSA Finishes Regulatory Package with Participant Disclosure Proposal ”) will doubtless find this one to be a modest improvement (see “ EBSA Releases Final 401(k) Fee Disclosure Rule ”). Aside from the passage of time, this version incorporates additional input from the retirement plan community, financial services regulators, and even participant focus groups—most of it good, and all of it interesting. 1 The rule itself is worth a read for, IMHO, it offers valuable insights not only into the suggestions made, but into the Labor Department’s reaction and response to those comments. As always, the devil lies in the final details, but one senses a strong interest in balancing the desire to give participants more information to make better decisions with the practical realities attendant in providing trans

Last week, I got an early morning call from my daughter. This, of course, is not an everyday occurrence, and since she had driven MY car to work that morning, it didn’t bode well as a start to the day for either of us. Turns out, she had noticed an unusual warning light as she pulled into her workplace—and she had even taken the time to determine its meaning. The good news is, the light indicated nothing more serious than low pressure in one (or more) of the tires. Now, my vehicle routinely prompts me for certain scheduled maintenance visits—many of which I ignore/postpone since they seem mostly designed to keep me spending money at the dealer. Unfortunately, the last time this particular light came on, it was a somewhat belated acknowledgement that one of my tires was flat. Consequently, on this particular occasion, I immediately jumped to the conclusion that we were dealing with a flat tire. By the time I got to the car (fortunately, it was sitting in a parking lot on a brillian

I’ve long had an issue with weight scales, for the perhaps obvious reason that, these days, they frequently deliver a message I’d just as soon not receive. See, even when I’m feeling pretty good about the way I look and feel, those scales generally remind me that is at a weight that I know is not “appropriate” for my height. Over the years, I have rationalized that gap in any number of ways; that those scales are frequently inaccurate, that the definitions of “appropriate” are skewed, even that I’m wearing clothes (or shoes) at the moment that are throwing things off (hey, I’ve got pretty big feet). But since I know, deep down, that those are, after all, mere rationalizations for avoiding the truth, these days I pretty much just treat stepping on scales as I would stepping on a rusty nail—which is to say, I avoid them at all costs…at least until I manage to get back on a regular exercise regimen. My sense has long been that that is how participants approach the issue of figuring ou