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November 16, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy

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[Guidance Overview]
2010 Retirement Plan Regulatory Limits Poster and DC Compliance Calendar

Excerpt: "This poster, compliments of Vanguard Strategic Retirement Consulting (SRC), is a convenient way to remind you of important regulatory limits and dates for retirement plans. Note that there are no increases in regulatory limits for 2010. SRC also has created a calendar that lists recurring compliance and notice requirements for qualified defined contribution plans. You'll want to keep these valuable reference tools on hand in the upcoming year." (The Vanguard Group, Inc.)


[Guidance Overview]
2009 End of Year Retirement Plan Sponsor 'To Do' Lists

Excerpt: "In this issue we provide seven 'to do' lists that may require you to take action before the end of 2009 or in early 2010. Many of the action items are a result of the Pension Protection Act of 2006 (the 'PPA') and may require plan amendments." (Snell & Wilmer LLP)


[Guidance Overview]
403(b) Plan Compliance Checklist

2 pages. Excerpt: "Plan compliance is a key to managing a successful retirement program for the benefit of your organization and its employees. Complete this checklist to help determine if your ERISA-covered 403(b) plan is in compliance, and where your exposure may lie in the event of an audit." (Diversified Investment Advisors, Inc.)


[Guidance Overview]
IRS's Benefit Plan Audit Materials

Excerpt: "The Internal Revenue Service (IRS) recently published an updated list of common plan mistakes found during IRS Employee Plans Team Audits (EPTA) and an internal controls questionnaire used by EPTA auditors. Although the EPTA Program focuses on retirement plans with at least 2,500 participants, the published materials give all plan administrators valuable insights into the IRS's audit process and what the IRS believes plan sponsors can do to avoid common errors in plan administration. Plan sponsors can utilize these tools to assess their plans' current compliance and to correct any mistakes identified." (Tax Management Inc.)


[Guidance Overview]
Required Minimum Distributions in 2009: What the IRS Forgot to Mention

Excerpt: "This article provides what we believe is the 'simplest' approach to dealing with the temporary waiver of the required minimum distribution (RMD) rules and recent IRS guidance on the issue. Generally speaking, the Code and regulations require that all qualified retirement plans, IRAs, 403(b) plans and 457(b) plans comply with certain rules pertaining to RMDs. These rules require that RMDs begin shortly after attaining age 701/2 and apply to: Owner-participants (i.e., those who own more than 5% of the plan sponsor) even if they are still working for the sponsor; Non-owner-participants who have separated from service, but have not yet begun receiving distributions." (Tax Management Inc.)


[Guidance Overview]
EFAST2 PIN for Form 5500 Electronic Filing Is Plan Administrator's Signature and Is Not To Be Shared

Excerpt: "EBIA Comment: This new FAQ highlights one of the many details that ERISA plan administrators, TPAs, and other Form 5500 preparers will need to understand as they get ready to file Form 5500s electronically under EFAST2. And, as the DOL notes, some filers will need to adjust their practices in order to comply. Although EFAST2 electronic credentials cannot yet be obtained (the system is expected to be up and running in January 2010), the DOL has been making an effort to provide information and resources on its website about the upcoming requirements." (Employee Benefits Institute of America)


Social Security's Recent Enhancements to Online Retirement Estimator
Excerpt: "Michael J. Astrue, Commissioner of Social Security, today announced that the online Retirement Estimator, available at www.socialsecurity.gov/estimator, now can provide immediate and personalized benefit estimates to people who have enrolled in Medicare but have not yet filed for Social Security benefits. Previously, these 'Medicare only' beneficiaries would need to contact a local office in order to obtain an estimate of their benefits." (U.S. Social Security Administration)


Federal Employees' Retirement System: Legislation Enacted in the 111th Congress
10 pages. (U.S. Congressional Research Service via opencrs)


Retirement-Product Developments Accompany Reform Drive
Excerpt: "Financial services firms are urging Congress to adopt retirement savings reforms in the next few years and are readying products that could profit from them. Several executives are recommending that lawmakers make changes that would ensure income from savings lasts through retirement. Robert L. Reynolds, the president and chief executive officer of Putnam Investments, said defined contribution plans, specifically 401(k)s, need to be improved so that their income stream does not run out too early. People should be able to put a portion of their 401(k) assets in annuities to ensure lifetime income, he said. 'The industry has done a good job of helping people accumulate money,' Reynolds said. 'Now we need to do a better job of helping people manage their 401(k) plans when they reach retirement.'" (Bank Investment Consultant and SourceMedia, Inc.)


Hybrid Retirement Plan in the Works: DB(k) Alongside 401(k) Would Provide Security, Guaranteed Pension
Excerpt: "The vulnerabilities of the 401(k) plan have cast doubt on whether a voluntary savings plan is the best way for workers to prepare for retirement. There are possible alternatives coming, however, that might catch on. One that may become available in January offers a guaranteed pension-like retirement benefit alongside a 401(k). It's called the DB(k), and it was created in the tax code in 2006. The law allows companies with fewer than 500 workers to start the hybrid plan after Jan. 1, 2010, and some proponents would like to see it available to all workers. As it is now, barely 40 percent of all workers even participate in a retirement plan at work." (The Washington Post; free registration required)


Seven Things Every Plan Sponsor Should Know About Being a Fiduciary
Excerpt: "As a plan fiduciary, it's never too late to start doing the right things the right way, but doing the right things means understanding what is expected of you -- and appreciating the implications." (PLANSPONSOR.com; free registration required)


Black & Decker Reinstates 401(k) Match
Excerpt: "Black & Decker Corp. is restoring pay cuts and the firm's 401(k) match, according to published reports. The Baltimore Sun said that the moves come as the power toolmaker's financial outlook starts to improve, citing a regulatory filing. The Towson, Maryland-based firm made the salary reductions in April, one of several cost-cutting moves it has made throughout the year. The disclosure came just a week after Black & Decker announced it was merging with Connecticut-based Stanley Works in a $4.5 billion all-stock deal. However, according to the Sun report, a spokesman for Black & Decker said the salary reinstatements were planned and weren't connected to the merger." (PLANSPONSOR.com; free registration required)


Washington Times Suspends 401(k) Match
Excerpt: "The Washington Times has told staff that it is suspending its 401(k) match. According to MediaBistro, Times VP of Human Resources Sonya Jenkins on Friday sent a memo to employees informing them that 'effective November 13, 2009 (today), the matching contributions under The Washington Times 401(k) Savings Plan and Supplemental Survivor & Retirement Plan (SSRS) will be suspended.'" (PLANSPONSOR.com; free registration required)


Have You Learned the Financial Lessons? A Quiz on How Much You've Really Taken Away from the Past Year
Excerpt: "The financial crisis supposedly has been a painful, but valuable, education about money in later life. How much have you taken away from the events of the past year? Try our quiz and find out." (The Wall Street Journal)


The Wealth of Older Americans and the Sub-Prime Debacle
Excerpt: "Prior to the financial crisis, our study and others had concluded that the current baby-boom cohort of near retirees were surprisingly well-prepared for retirement compared with similarly aged households over the past quarter century. Unless there is a strong recovery of asset values in the next few years, that favorable assessment is no longer true." (Center for Retirement Research at Boston College)


The Asset and Income Profile of Residents in Seniors Care Communities
Excerpt: "Understanding the economic characteristics of residents in seniors care communities is important to understanding the demand for these services as well as how individuals are paying for this type of care. It is particularly critical now given the recent steep decline in both the housing and equity markets, which could significantly erode the assets available to pay for senior housing." (Center for Retirement Research at Boston College)


[Opinion]
American Benefits Council/ACLI Comments on Special Rules Governing Eligible Combined (DB(k)) Plans (PDF)

4 pages. Excerpt: "This letter, which is submitted by the American Council of Life Insurers . . . and the American Benefits Council . . ., provides comments in response to Notice 2009-71 regarding guidance relating to eligible combined plans under 414(x) of the Internal Revenue Code . . . . It would be helpful if the Service would provide sample plan language in the form of listings of required modifications (LRMs) for eligible combined plans. Alternatively, we would appreciate guidance on which provisions must be included in the single plan document for the eligible combined plan." (American Benefits Council)


[Opinion]
Risks Rising at the PBGC?

Excerpt: "Are you wondering what I am wondering? Why would a private equity partner want to become the director of the PBGC? Want to take a stab on where they're going to rebalance their portfolio? I can already see PE funds lining up to fill out the requests for proposals. Another thing I can tell you is that the PBGC's ongoing deficits will require a massive bailout down the road. That's why Uncle Ben will let this bubble blow for as long as he possibly can." (Leo Kolivakis)



NTSAA (Advert.)

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The 2010 NTSAA Annual Conference...the place to be for 403(b)! January 27 - 30, Indian Wells, CA


Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
ERISA Section 510: The Environment Is Ripe for Claims

Excerpt: "ERISA §510 makes it unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled or may become entitled under an ERISA plan. It also makes it unlawful to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has or is about to testify in any ERISA-related inquiry or proceeding. With layoffs continuing into the second half of the year, the setting is ripe for an increase in claims by employees who believe their discharge was motivated by their employers' desire to reduce or avoid benefit plan expenses. And §510 claims are not necessarily made in a vacuum. They can come as part of a general wrongful discharge claim, age discrimination claim, or a whistleblower action where the employee also alleges the employer attempted to interfere with ERISA-protected rights." (Tax Management Inc.)


SEC Says No More Lenience on Pay Disclosure
Excerpt: "After three years of reviewing companies' pay disclosures, the Securities and Exchange Commission appears to be running out of patience. Since late 2006, when the SEC revamped its guidelines for disclosing information on the compensation of top executives, the regulator has been sending out comment letters to companies whose disclosures they consider insufficient. These companies have been asked to do a better job next time or to provide additional information in a response letter." (CFO.com)


The Impact of Women's Growing Participation in the Workforce
Hearing held November 13, 2009, on The Shriver Report: A Woman's Nation Changes Everything. (U.S. House Committee on Education & Labor)


Sunoco Will Freeze Defined Benefit Pension Plans for Most Workers and Phase Out Medical Benefits for Most Retirees
Excerpt: "Sunoco spokesman Thomas P. Golembeski told the Philadelphia Inquirer the DB cutback would be accompanied by unspecified 401(k) enhancements. The company made the announcement as it reported its third-quarter financial results showing a $312-million loss, according to a Sunoco news release. Golembeski said Sunoco deliberately delayed the benefit changes for eight months to allow employees enough time for proper planning including 'individual decisions regarding retirement.'" (PLANSPONSOR.com; free registration required)


Employee Benefits 2009 Year-End Checklist, Year in Review, and Planning Ahead for 2010 (PDF)
9 pages. Excerpt: "In addition to the items on the legislative agenda, both the Department of Labor and the Internal Revenue Service have important guidance projects still awaiting release, some or all of which may be issued in 2010. Employers should stay tuned for news about the following items in particular: Pending Department of Labor guidance requiring enhanced disclosure to plan participants about benefit plan administrative costs and investment expenses, and enhanced disclosure obligations from plan service providers to plan fiduciaries. Department of Labor regulations governing the provision of investment advice to retirement plan participants. Congress is also considering legislation in this regard. IRS regulations governing cafeteria plans and flexible spending accounts, particularly with respect to compliance with non-discrimination rules." (Harter Secrest & Emery LLP)



Webcasts and Conferences

CT NIPA: ERISA Washington Update with Speaker Sal Tripodi
in Connecticut on December 3, 2009
presented by National Institute of Pension Administrators-CT Chapter

(Click to post your webcast or conference)

Employee Benefits Jobs

401(k) Plan Administrator
for Capital Retirement Plan Services, Inc.
in PA

Director, Marketing
for New York Life Retirement Plan Services
in MA

Vice President, New Business Marketing.
for New York Life Retirement Plan Services
in MA

Project Leader, Conversions
for New York Life Retirement Plan Services
in MA

Defined Benefit Administrator
for Central New Jersey Firm
in NJ

Assistant Administrator
for Central New Jersey Firm
in NJ

Defined Contribution Administrator
for Central New Jersey Firm
in NJ

Paralegal Attorney
for Vaccaro & Prisco, LLP
in NY

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