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October 8, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy

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[Guidance Overview]
IRS Guidance on Rollovers of 2009 RMDs and Extensions of Certain Periods

Excerpt: "Notice 2009-82 addresses the rollover rules that apply to 2009 RMD amounts and answers other questions relating to the 2009 RMD waiver. It also includes: Transition relief for employer plans[ii] that are not operated in accordance with the plan's terms with respect to waived RMDs and certain related payments; Relief for rollover of waived RMDs and certain related payments, including an extension of the 60-day rollover period for some of these distributions; Answers the question of whether the RMD waiver also applies to a series of substantially equal periodic payments (SO-SEPP or SEPP)/72(t) payments, under which the 10% early distribution penalty is waived; and Explains when certain distribution related deadlines are extended and the duration of the extension." (RetirementDictionary!)


[Guidance Overview]
Third Circuit Validates Indemnity Agreement in Collective Bargaining Agreement for Payment of Withdrawal Liability (PDF)

Pages 2-3 of 5 pages. Excerpt: "The Third Circuit's decision does not give employers a free pass on withdrawal liability, but it may very well provide employers with an opportunity to significantly reduce their exposure to this type of liability -- over which they typically have little control -- through the collective bargaining process." (Proskauer Rose LLP)


[Guidance Overview]
District Court Concludes That Defendants Had No Discretion to Eliminate or Liquidate Citigroup Stock Fund (PDF)

Pages 1-2 of 5 pages. Excerpt: "The Citigroup decision is noteworthy because the court focused on the plan terms to determine the appropriate scope of any fiduciary duties regarding investments in employer stock. The decision suggests that, if the terms are sufficiently explicit, they could eliminate the prospects of a viable fiduciary breach claim for failure to discontinue stock fund investments." (Proskauer Rose LLP)


[Guidance Overview]
IRS Clarification of Interest Rates That May Be Used Under Upcoming Final Regs, to Be Effective in 2010

Excerpt: "In advance of pending regulations under Code Secs. 430 and 436, the IRS has released guidance clarifying the interest rates that may be used by actuaries in issuing the certified adjusted funding target attainment percentage (AFTAP) for 2009. According to the IRS, the final rules will, effective for plan years beginning on or after January 1, 2010, authorize automatic approval of new interest rates for the first plan year beginning in 2010, but will not allow for the use of a full yield curve with a lookback month." (Wolters Kluwer)


[Guidance Overview]
Significance of November 30th in New RMD Waiver Rules

Excerpt: "In Notice 2009-82, the IRS provides transition relief and other guidance relating to the [Worker, Retiree, and Employer Recovery Act of 2008 ('WRERA')] waiver of required minimum distributions under Code §401(a)(9). . . . November 30, 2009 figures prominently in the Notice, however, there is substantial confusion about the significance of that date. This Technical Update will discuss what distribution recipients and retirement plan sponsors must do by that date." (SunGard Relius)


[Guidance Overview]
Flight from Equities in Cash Balance Plan No ERISA Miscue, According to Judge

Excerpt: "An employer's move to reduce its equity holdings and increase fixed income investments in its cash balance pension plan did not represent an illegal benefits reduction, a federal judge has ruled. U.S. District Judge J.P. Stadtmeuller of the U.S. District Court for the Eastern District of Wisconsin asserted that the decision by S.C. Johnson & Sons did not violate the anti-cutback rule in the Employee Retirement Income Security Act (ERISA). Stadtmeuller said the employer's pension plan changes did not result in a 'reduction of accrued benefits' that would trigger the ERISA provision prohibiting sponsors from changing their plan in a way that generates lesser benefits for participants." (PLANSPONSOR.com; free registration required)


Guidance for Sustaining Retirement Income Before and After Market Downturns
16 pages. Excerpt: "The objective of this paper is to provide financial professionals with insight as to when and how to deal with market volatility for clients just entering, or already in, retirement. The paper presents guidelines as to when action is needed, and offers some alternative strategies to help sustain retirement income." (Principal Financial Services, Inc.)


An Interview with ASPPA CEO Brian Graff
Excerpt: "Brian H. Graff is the Executive Director/Chief Executive Officer of the American Society of Pension Professionals & Actuaries (ASPPA). . . . Today, ASPPA is a national organization of more than 6,500 retirement plan professionals who provide consulting and administrative services for qualified retirement plans covering millions of American workers." (BrightScope Inc.)


Judge Dismisses WaMu Employees Lawsuit vs JPMorgan
Excerpt: "A U.S. District Court dismissed a lawsuit of former employees of Washington Mutual against JPMorgan Chase & Co to recover their retirement account losses after the collapse of the thrift. The plaintiffs filed a case in November 2007 against Washington Mutual asserting the financial company breached duties it owed under the Employee Retirement Income Security Act by allowing them to invest their 401(k) funds in Washington Mutual stock. The funds declined as the stock of Washington Mutual, one of the largest U.S. financial institutions, plunged -- hurt by mounting losses." (Reuters News Service via ABC News)


Distributions to Former ESOP Participants in Company Stock
In her latest 'Focus on Operational Issues' column on the NCEO's Web site, Nancy Dittmer discusses some of the issues that arise with ESOP distributions to former participants made in company stock. (National Center for Employee Ownership)


Average 401(k) Balance Among Consistent Savers Fell 24% in 2008
Excerpt: "Maybe the best that can be said about the effect of last year's market crash on average 401(k) balances is: It could have been worse. The average balance dropped 24% in 2008, according to a study of accounts held by 6 million workers who consistently participated in a 401(k) plan from 2003 through 2008, by the Employee Benefit Research Institute and the Investment Company Institute." (MarketWatch, Inc.)


[Opinion]
401(k) Fiduciary Responsibility: Conventional Wisdom and the Law of Unexpected Consequences (PDF)

10 pages. Excerpt: "For almost 30 years, conventional wisdom has maintained that 401(k) fiduciaries can easily fulfill their duties of loyalty and prudence by (1) hiring a competitively priced recordkeeper that routinely deals with plans of their size, (2) using a well-respected investment consultant to advise on selecting and monitoring 'competitively' priced investment options, and (3) complying with the letter (as distinct from the spirit) of the law. Conventional wisdom also assumed that employees are rational adults who are fully willing and capable (educationally and financially) of tackling the challenges of achieving a financially secure retirement. Unfortunately, conventional wisdom, more often than not, reflects what we wish to believe rather than fact." (Richard D. Glass via InvestmentHorizons.com)


[Opinion]
Is It Important for 401(k) Fees to Be Equitable?

Excerpt: "Increased fee disclosure to plan participants that may result from pending regulatory and legislative initiatives has the potential to bring the issue of fair fee payment to the forefront. Uneven administrative fees can leave plan sponsors open to uncomfortable questions by participants, or may even bias participants against funds that carry the lion's share of the administrative burden. However, creating an investment menu with equitable administrative fees can be challenging. As we just saw, revenue-sharing arrangements -- which are negotiated between the record keeper and the investment managers -- are usually not consistent, and plan sponsors may have no control over share classes that are available to them." (Workforce Management; free registration required)



Retirement Solutions, LLC (Advert.)

 (clickable image)




Links to Items on Executive Comp, Benefits in General

Few Employer Changes in Retirement and Health Plans, Despite Rising Costs, According to Survey
Excerpt: "Despite the economic upheaval, employer matching contributions were unchanged in 2009 in 90% of the 401(k) plans recently surveyed by Aon Consulting. Of the remaining plans that provide employer matching contributions, 3% increased their match and 7% decreased it. These are among the findings of Aon's 2009 Benefits and Talent Survey, conducted in March 2009 with 1,300 participating employers." (Wolters Kluwer)



Webcasts and Conferences

"Aggregation Aggravation: Controlled Groups in 2009" Recorded Web Seminar
Nationwide on October 7, 2009
presented by SunGard Relius

"ERISA Workshop" in Charlotte
in North Carolina on November 13, 2009
presented by SunGard

"ERISA Workshop" in Chicago
in Illinois on November 13, 2009
presented by SunGard Relius

"ERISA Workshop" in Detroit
in Michigan on November 13, 2009
presented by SunGard Relius

"ERISA Workshop" in Knoxville
in Tennessee on November 10, 2009
presented by SunGard Relius

"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Charlotte
in North Carolina on November 12, 2009
presented by SunGard Relius

"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Chicago
in Illinois on November 12, 2009
presented by SunGard Relius

"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Detroit
in Michigan on November 12, 2009
presented by SunGard Relius

"Plan Forms, Notices, and Amendments: Streamlined, Effective, Timely" in Knoxville
in Tennessee on November 9, 2009
presented by SunGard Relius

2009 Open Enrollment: Best Practices
Nationwide on October 6, 2009
presented by Gallagher Benefit Services, Inc.

Cammack LaRhette 403(b) Curriculum
Nationwide on October 9, 2009
presented by Cammack LaRhette Consulting

Workplace Wellness: How to Implement a Cultural Transformation Webcast
Nationwide on October 22, 2009
presented by International Foundation of Employee Benefit Plans

(Click to post your webcast or conference)

Press Releases

New Book: The Future of Public Employee Retirement Systems
Pension Research Council

85% of People Would Consider Medical Tourism
AllMedicalTourism.com

(Click to post your press release)

Employee Benefits Jobs

Illustration & Product Specialist
for AUL/OneAmerica Financial Partners, Inc.
in IN

(Click to post your job opening | View all jobs | RSS feed for jobs RSS feed of all jobs )


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