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BenefitsLink Retirement Plans Newsletter
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[Guidance Overview]
Final Rules on Retirement Plan Fee Disclosures
"[T]he effective date of the participant-directed fee disclosure rules is tied to these service provider fee disclosure rules. Accordingly, this means that, for calendar year plans, initial disclosures to participants must be made by August 30, 2012 and the first quarterly disclosures must be made by November 14, 2012."
(Pillsbury)
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[Guidance Overview]
IRS Proposed Regs on Minimum Present Value Requirements Under Defined Benefit Plans
"The changes under the proposed regulations are proposed to apply to distributions with annuity starting dates in plan years beginning after the regulations are finalized. If the regulations are finalized as proposed and a plan that previously provided for a partial single-sum distribution together with a specified annuity distribution is amended to treat that distribution form as a bifurcated accrued benefit (and applies less favorable actuarial factors to the portion of the benefit that is not subject to Code Sec. 417(e)(3)), then the plan must comply with the anti-cutback requirements of Code Sec. 411(d)(6)."
(Wolters Kluwer Law & Business / CCH)
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Credit Unions Make Suggestions for Governmental Plan Redefinition
"Credit Union National Association (CUNA) and the National Association of Federal Credit Unions (NAFCU) have made suggestions concerning the issue of whether a retirement plan offered by a federal credit union is considered a governmental plan under the Internal Revenue Code."
(PLANSPONSOR.com)
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Capitalizing on Fee Disclosure Rules (PDF)
"Over the last 12 months there has been a great deal written about the new rules issued by the U.S. Department of Labor (DOL) which will require separate fee disclosures to plan sponsors and to participants in 2012. These mandatory disclosures will raise awareness of the plan's fees and expenses, which in turn may invite scrutiny of the plan's investments and services."
(The Wagner Law Group)
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Overspending in Retirement Is Chronic Problem
"There is a major disconnect between how much people save for retirement, what they live on outside of retirement and what they expect to get in retirement."
(BenefitsPro via ProducersWEB)
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DOL Sets February 24 Deadline on Fiduciary IRA Request
"The Department of Labor's Employee Benefits Security Administration (EBSA) has given industry trade groups until Feb. 24 to fulfill the department's request regarding what impact the conflicts of interest faced by brokers who advise IRAs have on IRA investors."
(AdvisorOne)
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Virginia Retirement System Sets Stage for Expansion of 401(k)-Style Contribution Plans
"Beginning July 1, employees who use defined-contribution plans for retirement savings will have the option of leaving the responsibility to VRS to make investment decisions for them, based on when they expect to retire. The $53.3 bil.lion retirement system will establish a 'target date fund' for employees who want to contribute to 401(k)-style plans but want the state to 'do it for me' in balancing the risks and rewards of market investments."
(newsadvance.com)
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The State and Local Pension Crisis
"In the private sector, gains and losses of pension funds must be smoothed over seven years ... - ten years when requested by the plan's administrators. By contrast, in the public sector, gains and losses may be smoothed over 30 years. This means that public funds can incur greater near-term deficits than private plans, because projected gains 30 years hence can be used to offset near-term losses, at least on paper."
(RealClearMarkets)
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Lawsuit Against Pension Changes Could Benefit from Court Rulings in Other States
"The Maine Association of Retirees, an organization representing retired Maine state workers and teachers, ... is challenging the Legislature's decision last year to eliminate pensioners' cost-of-living adjustments for three years and to impose a new cap on cost-of-living increases.... [T]he arguments made in New Hampshire and Arizona could be used to challenge pension reforms made in other states.... States seeking to make pension system changes this year are considering focusing those reforms on new-hire employees to avoid the so-called contract challenge."
(Lewiston SunJournal)
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IRS Providing Interim 403(b) Plan Document Relief
"Though not provided in formal, published guidance ... under the interim program, IRS examination staff will approach plan problems in an accommodating manner ... An employer should avoid attempting to retroactively amend the plan on audit ... Because of several procedural issues, retroactive amendment of the plan on audit will trigger the higher CAP sanctions[.]"
(Smart HR Manager / Thompson)
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Congressional Resolution Backs 401(k) Tax Deduction
"A resolution supporting current tax incentives for 401(k) plans was signed Thursday by more than 100 members of the House, before federal budget negotiations for fiscal year 2013 begin in earnest."
(Pensions & Investments)
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[Opinion]
Fiscal Reform and the Future of Lifelong Savings
"The first step in securing future retirement security is to do no harm to what has been working very well. Some proposals that have been raised in the context of deficit reduction or tax reform would seriously hurt coverage and reduce the level of retirement savings across income groups. Small businesses would be hurt the worst. Proposals currently under discussion — whether slashing the contribution limits, reducing tax incentives, or turning the current year's exclusion into a credit - would discourage small business owners from setting up or maintaining a workplace retirement plan. That's the exact opposite of what needs to be done."
(ASPPA)
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Benefits in General; Executive Compensation
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[Guidance Overview]
California Ban on Same-S.ex Marriage Violates U.S. Constitution
"The Ninth Circuit's decision will not have an immediate effect in California, as it remains stayed while proponents of Proposition 8 consider their appeal options (including a request to the U.S. Supreme Court to hear the case). In addition, given the pains the court took to limit its ruling, the decision may not have direct applicability to existing laws in the other eight states in the Ninth Circuit."
(Thomson Reuters/EBIA)
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Press Releases
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