Nevin's Data "Points"

 I’ve been writing a weekly column (and then some) for more than two decades now. Some are easier to write (and read)—and some hold up better (and longer) than others. These are some of my (and perhaps your) favorites from 2022. Let me know what you think in the comments below… particularly if I have missed one of your favorites…   7 Things to Know About the New ESG Regulation There’s a lot to unpack in that regulation (and the rest of the 236-pages that help explain its process and rationale), but here’s a few things that seem particularly important to note at the outset. https://www.napa-net.org/news-info/daily-news/7-things-know-about-new-esg-regulation ‘Damned’ (Even) If You Do The flurry of lawsuits unleashed on holders of the BlackRock LifePath target-date funds is not without precedent—but it’s surely a head scratcher. https://www.napa-net.org/news-info/daily-news/damned-even-if-you-do Things to Ponder In the course of my day, I talk to (and email with) peopl

" You better watch out, you better not cry, you better not pout…” Those are, of course, the opening lyrics to that holiday classic, “Santa Claus is Coming to Town.” And while the tune is jaunty enough, the message—that there’s some kind of elfin “eye in the sky” keeping tabs on us has always struck me as just a little bit… creepy. That said, once upon a time, as Christmas neared, it was not uncommon for my wife and I to caution our occasionally misbehaving brood that  they  had best be attentive to how their (not uncommon) misbehaviors might be viewed by that big guy at the North Pole. In support of that notion, a few years back—well, now it’s quite a few years back—when my kids still believed in the (SPOILER ALERT) reality of Santa Claus, we discovered an ingenious website [i]  that purported to offer a real-time assessment of their “naughty or nice” status. Indeed, no amount of parental threats or admonishments—in fact, nothing we ever said or did— ever  managed t

 It’s ironic that programs designed to provide retirement income pay so little attention to the realization of that objective. Still, some have said that this could be the year for retirement income—a combination of new offerings, volatile markets, and rising interest rates—and yet, it still seems that there are obstacles to overcome.  Here are six: 1. There is no legal requirement to provide a lifetime income option. Let’s face it, it’s a full-time job just keeping up with the plan provisions, standards, participant notices and nondiscrimination tests that are required by law. The notion that a plan sponsor would, in the absence of a compelling motivation take on extra work, and work that carries with it additional financial and fiduciary responsibility as well, doesn’t seem very realistic. Indeed, with no legal obligation to provide this offering, and an underlying concern that providing the option does involve taking on additional liability… 2. The safe harbor fo

A little more than a week ago, the U.S. Department of Labor unveiled its much-anticipated final ESG rule.  There’s a lot to unpack in that regulation (and the rest of the 236-pages that help explain its process and rationale), but here’s a few things that seem particularly important to note at the outset. There are some (important) things that did NOT change. First, and to my mind, foremost, the Labor Department noted that “The duties of prudence and loyalty require ERISA plan fiduciaries to focus on relevant risk-return factors and not subordinate the interests of participants and beneficiaries (such as by sacrificing investment returns or taking on additional investment risk) to objectives unrelated to the provision of benefits under the plan. But it also included an important clarification: “…the final rule amends the current regulation to make it clear that a fiduciary’s determination with respect to an investment or investment course of action must be based on fa

 Most of the attempts to affix a value to having an advisor tend to focus on investment returns or cost savings. Both are valid, objective measures that can have a real, substantive impact on retirement security—but, at least with the best advisors—there’s usually more. Indeed, years ago as a fiduciary of another firm’s 401(k) plan, and while I had always felt comfortable with the decisions the plan committee had made, as our little company grew to be less little, I was increasingly aware of the personal liability associated with my role, and the small amount of time I was able to dedicate to the task alongside my “day job.”  That advisor delivered in all the ways I had hoped he would—but there was value well beyond that in terms of the structure he brought not only to our discussions, but to our process. Things like: The Discipline to Meet Internally driven committee meetings are frequently a casualty of whatever crisis emerges on any particular day. As human beings

 While it’s the celebration following a successful harvest held by the Pilgrims and members of the Wampanoag tribe in 1621 that provides most of the imagery around the holiday, Thanksgiving didn’t become a national observance until much later. Incredibly, it wasn’t marked as a national observance until 1863—right in the middle of this nation’s Civil War, and at a time when, arguably, there was little for which to be thankful. Indeed, President Abraham Lincoln, in his proclamation regarding the observance, called on all Americans to ask God to “commend to his tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife” and to “heal the wounds of the nation.”  We could surely stand to have some of that these days.    Thanksgiving has been called a “uniquely American” holiday—and so, even in a year in which there has been what seems to be an unprecedented amount of disruption, frustration, stress, discomfort and loss—there r

In the course of my day, I talk to (and email with) people, read a lot, and every so often jot down a random thought or insight that gives me pause and makes me think. See what you think. It’s not what you’re doing wrong; it’s what you’re not doing that’s wrong. The best way to stay out of court is to avoid situations where participants lose money. The key to successful retirement savings is not how you invest, but how much you save. Does anybody still expect their taxes to be lower in retirement? If you don’t know how much you’re paying, you can’t know if it’s reasonable. Everybody wants a pension, but nobody seems to want an annuity. Everybody’s “committed to the business”…until they aren’t. Retirement income is a challenge to solve, not a product to build. “Stay the course” is only good advice if you were on a good course to begin with. Does anybody but lawyers actually read those legal “disclosures?” (that’s a rhetorical question.) When selecting plan investm

If you have turned on a TV, walked by a radio, driven down a residential street, gotten an unsolicited text or answered a phone (or more likely let it go unanswered) in the past month, you will, of course, be aware that our nation will officially go to the polls today. I say “officially,” but of course, our nation has been “going” to the polls—or at least casting votes—for several weeks now. And while some states (and voters) have done so in elections past, a combination of factors means that the process of voting, like so much of our lives the past couple of years, is going to be “unprecedented,” both in terms of the breadth and volume of votes cast prior to election “day”—and perhaps on that day itself. And yes, it’s been a particularly nasty—one feels compelled to say “unprecedented”—election cycle. Now, we all carry on as though the nation has never, ever seen anything like this—but perhaps it would be more accurate to say that it hasn’t …in our lifetimes. Students

 The academics are at it again. In a paper provocatively titled “The Life-Cycle Model Implies that Most Young People Should Not Save for Retirement” no fewer than four of them take 48 pages to make that case. The “trade press” breathlessly intoned “ Most Young People Should Not Save For Retirement in Their 401k ,” “ Many young people shouldn’t save for retirement, says research based on a Nobel Prize–winning theory ,” “ Under 35? Don’t Save For Retirement Yet, These Experts Say ,” “ Economists Say Enjoy Your Youth and Save Later .” At least one had the temerity to offer a contrasting viewpoint (see “ A New Paper Says Young People Shouldn't Save for Retirement. Advisors Disagree ”), while The Street at least called it out as “ This May Be the Worst Financial Advice Ever Shared .” Like most research, the conclusion is a premise based on assumptions. Here the most basic is that this thing called a “life-cycle model” is worth considering in the first place. Now, granted, it’s t

 I’ve spent my entire working career working with retirement plans—but most of it not focused on a retirement plan of my own. In that sense, I am perhaps like many, maybe most of you. Oh, I thought about retirement (a lot, just not mine), maxed out my 401(k) (when I wasn’t co-funding college tuitions), and was at least intellectually cognizant of the potential costs of living for decades without a salaried paycheck. Much has been made of how difficult it is for younger workers to grasp the reality of retirement—but the reality is that retirement “myopia” is not limited to younger workers. That said, and as you will hopefully have seen in the lead post today, I have announced my “retirement” —though it’s not retirement [i] in the traditional cessation of work sense. Yes, while I love what I do and the people I do it with (for the very most part)—I’ve been cranking out a daily news service (and then some) pretty much every working day (including vacations) across multiple

You may have missed it, but there’s been a bit of a “hub-bub” brewing on social media…about the impact of, and perhaps even the utility of, social media. Here’s some thoughts—and some tips.  JD Carlson of Retireholics “fame” kicked things off with a post intriguingly titled “Forget About Social Media Content and Run Your 401(k) Business.” Oh, there were words [i] that followed, but you really didn’t have to read more than that to see where he was going. Well, about a nanosecond after that post appeared on…social media… Sheri Fitts who, as you may know, spends a fair amount of her time and energy helping advisors (and other retirement professionals) be more effective on…social media… pushed back on JD’s basic premise. A bit. Her argument was basically that while social media was important (we’ll come back to that), doing so without a clear focus or strategy was a mistake—but that ignoring the marketing impact of social media was perhaps a larger one.  And then, Faith Teo

If you work with TPAs—third party administrators—you might want to avoid bugging them this week.  As you may well know (certainly if you work with TPAs), this year, Monday (Oct. 17th) is the deadline to file Form 5500s, and for most TPAs, that’s a pretty all-consuming focus. So much so that every year on the day AFTER the Form 5500 filing deadline, John Hancock declares an annual day of recognition for TPAs .  Now, to its credit, John Hancock goes so far as to note that National TPA Day is also a reminder to financial professionals (especially those still getting established) that partnering with TPAs may be an important pathway to success. Not that everyone feels that way, of course. I’m talking about the disconnects in focus between retirement plan advisors and TPAs—an issue that is, perhaps, as old as ERISA itself—this “tension” between these two critical roles. Not in every case, of course—there are plenty of advisors that will tell you how many times their TPA part

The future is an uncertain thing, and planning for uncertainty inevitably involves making some assumptions. Here are seven that, done improperly, can—yes, derail your retirement realities. How Long You’ll Work Perhaps the most important assumption is when you plan to quit working, or perhaps more accurately, when you plan to start drawing down your retirement funds. Today most Americans are doing so at 62, though 65 seems to be the most common assumption—and while using 70 (or later) will surely boost your projected outcomes (it both gives you more time to save and reduces the time that you will be drawing down those savings), it may not be realistic for many individuals. Indeed, the 2022 Retirement Confidence Survey from the nonpartisan Employee Benefit Research Institute (EBRI) notes that the age at which workers expect to retire has been slowly rising. In 1991, just 11% of workers expected to retire after age 65. By 2022 that number had nearly quadrupled; 41% of wor

What’s the most important number when it comes to retirement? Once upon a time it might have been considered to be “65”—that traditional age for retirement—but even though it’s the default in many retirement calculators, until recently it hadn’t even been the most common age for actual retirement. Heck, it’s not even “good enough” for full Social Security benefits these days. [i]   Perhaps a more precise focus number in retirement planning is the one that purports to provide some level of financial security in retirement [ii] —indeed, some years back there was a commercial that prompted folks to determine their “number”—a reference to a financial result that was deemed necessary to “retire the way you want” (and perhaps when you want, though that wasn’t part of the “pitch”). But while that was (and is) “A” number, in order to get to it, for it to have any semblance of actually fulfilling that promise (premise?), you had to first get to several other numbers; how long