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December 1, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy

ASPPA (Advert.)

The ASPPA 401(k) Summit | March 13 – 16, 2010 | Orlando World Center Marriott Resort (clickable image)

The ASPPA 401(k) Summit | March 13 – 16, 2010 | Orlando World Center Marriott Resort

Expect The ASPPA 401(k) SUMMIT in 2010 to be better than ever! The SUMMIT provides a world class interactive environment for retirement sales and investment professionals who actively sell, support or service 401(k) plans including Broker Dealer Registered Reps, Registered Investment Advisors, Plan Administrators (TPAs) and Product and Service Professionals.

For more information and to register, click here: The ASPPA 401(k) SUMMIT.



[Official Guidance]
PBGC Announces Per-Participant Flat Premium Rates for 2010: $35 for Single-Employers Plans, $9 for Multiemployer Plans (PDF)

Excerpt: "[T]he 2010 flat premium rates for PBGC's two insurance programs will be $35.00 per participant for single-employer plans and $9.00 per participant for multiemployer plans. . . . PBGC has concluded that since the flat rates are easily accessible to the public on its Web site, it is no longer necessary to publish annual flat premium rate notices in the Federal Register." (Pension Benefit Guaranty Corporation)



[Official Guidance]
Text of PBGC Announcement That Maximum Guaranteed Benefit Amounts Will Be Published Exclusively on PBGC Web Site (PDF)

Excerpt: "In recent years, PBGC has . . . published this information on its Web site (http:// www.pbgc.gov; click on 'Workers & Retirees,' then on 'Maximum monthly guarantee tables' under the heading 'Benefits Information' in the center column). PBGC has concluded that since the maximum guaranteeable benefits are easily accessible to the public on its Web site, it is no longer necessary to publish the information in the Federal Register (where annual updates to appendix D to the benefit payment regulation are published) or the Code of Federal Regulations (where the appendix itself is published). Accordingly, PBGC is removing appendix D from the benefit payment regulation. This action has no substantive legal effect." (Pension Benefit Guaranty Corporation)



[Official Guidance]
Text of New PBGC Table Used in Valuing Benefits for Distress or Involuntary Terminations of Plans with 2010 Valuation Dates (PDF)

Excerpt: "This rule amends Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2010. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. DATES: Effective Date: January 1, 2010." (Pension Benefit Guaranty Corporation)



[Official Guidance]
2010 Table of Maximum Guaranteed Benefits from PBGC, Expressed as Present Values; Relevant for Underfunded Plans

Excerpt: "IRC section 436(d)(3) and ERISA section 206(g)(3)(C) provide that if the 'adjusted funding target attainment percentage' is at least 60% but less than 80%, a plan may not pay a prohibited payment to the extent the payment exceeds the lesser of: (1) 50% of the amount of the payment that would be paid if the restriction did not apply, or (2) the present value, determined under guidance provided by PBGC, of the maximum guarantee with respect to the participant under ERISA section 4022." (Pension Benefit Guaranty Corporation)



[Guidance Overview]
DOL Opines that Security Interest in Non-IRA Brokerage Assets to Cover IRA Indebtedness is a Prohibited Transaction (PDF)

Excerpt: "In Advisory Opinion 2009-03A (October 27, 2009), the U.S. Department of Labor (DOL) opined that the pledge of an IRA owner's personal accounts at a brokerage firm to secure the payment of any debt or liability in his self-directed IRA maintained with that firm would violate the prohibited transaction rules of Internal Revenue Code § 4975." (Sutherland)



[Guidance Overview]
Defined Benefit Plan Administrator Erred in Reducing U.S. Pension Plan's Benefit by Benefit Earned in Foreign Plan

Excerpt: "The U.S. plan formula counted all U.S. and non-U.S. service and provided an offset for benefits earned under any other 'qualified defined benefit plan' maintained by the company. The [7th Circuit] court found this term referred only to plans qualified under US tax law, not foreign plans, and suggested the administrator's interpretation was tainted by conflict of interest." (Mercer)



[Guidance Overview]
IRS to Suspend Issuing Determination Letters for Preapproved Defined Benefit Plans

Excerpt: "Effective Feb. 22, 2010, IRS temporarily will stop accepting determination letter (DL) applications from adopting employers of preapproved defined benefit (DB) plans. The move comes as IRS prepares for a surge of EGTRRA-related filings. Sponsors of preapproved DB plans that submitted EGTRRA restatements by January 2008 should be receiving IRS approval in early 2010. After that, employers will have a two-year window to adopt the restated plans and, if desired, submit them for DLs using Form 5307. The suspension does not affect DL applications filed under a correction program." (Mercer)



[Guidance Overview]
PBGC Focuses on Annuity Purchases Occurring Before Pension Plan Termination

Excerpt: "PBGC is seeking public comments to help develop guidance on how a pension plan's purchase of an insurer's irrevocable commitment to provide plan benefits may affect compliance obligations in the event of a later plan termination. The agency is concerned that such purchases might undermine participant safeguards provided by the plan termination process and could harm participants and PGGC if the plan later undergoes a distress or involuntary termination." (Mercer)



[Guidance Overview]
Interim PBGC Guidance Clarifies Pension Plans' Reportable-Event Obligations for 2010

Excerpt: "Interim PBGC guidance clarifies pension plans' reportable-event obligations for the 2010 plan year. Until final regulations reflecting Pension Protection Act changes take effect -- expected 'sometime after the beginning of 2010' -- plan sponsors may rely on Technical Update 09-4, which extends PBGC's earlier relief for reportable events occurring in 2009. The guidance addresses reporting waivers, extensions, the threshold test for advance reporting and missed contributions for small plans." (Mercer)



DOL to Retirement Plan Sponsors: Criminal Sanctions Will Increase For Certain Non-Compliance
Excerpt: "A late deposit [of employee contributions, such as deferrals under a 401(k) plan,] has always been considered a breach of fiduciary duty and a prohibited loan to the employer, giving rise to possible sanctions such as excise taxes, penalties and liability for lost earnings to the participants. Now, at least in 'egregious' cases, the DOL will also consider criminal sanctions. Presumably, this may occur such as when the very late remittance to the plan is not made until discovered by the DOL or other circumstances where embezzlement of plan assets is suspected." (Baker Donelson)



Recession Hits Retirement Plans; More Than Half of U.S. Households Now at Risk
Excerpt: "Before the recession, 43 percent of American households were 'at risk' of not being able to maintain their standard of living in retirement -- a percentage the center considered too high. The number shot up to 51 percent in the second quarter of 2009, according to the . . . National Retirement Risk Index [published by the Center for Retirement Research at Boston College]." (Columbus Dispatch)



Eighth Circuit Decision in Braden v Walmart Lowers Bar for 401k Fee Litigation
Excerpt: "The [Braden v. Wal-Mart case] is a flashing yellow light cautioning employers that: It is now easier for plaintiffs to proceed to discovery based on allegations that 401(k) fiduciaries should have offered investment options with lower fees, particularly for large plans that allegedly failed to take full advantage of their market power. Notwithstanding recent court rulings holding that ERISA imposes no affirmative duty to disclose to participants the plan's revenue sharing arrangements, employers and fiduciaries are now more vulnerable to such claims and should review what their plan communications say about fees." (Dorsey & Whitney)



401(k) Plans Generating New Retirement Income Solutions But Careful Design Necessary
Excerpt: "One of the biggest complaints about 401(k) plans is that they function purely as asset accumulation vehicles, with no mechanism for helping participants prudently draw down their savings in retirement. Over the past several years, a number of vendors have attacked this problem by introducing annuities that function as investment options within a plan. Some work like variable annuities with guaranteed- minimum-withdrawal benefits . . . ." (CFO.com)



Underfunded Pension Plans Troubling Taxpayers and Companies Alike
Excerpt: "At the end of 2006, public pension plans were already underfunded by $361 billion, according to the Pew Charitable Trusts. That was before the stock market collapse, soaring unemployment rates and tumbling tax revenues dealt municipal finances another blow. The federal insurer of corporate pensions, the Pension Benefit Guaranty Corp., reported this month that it was $22 billion in the red in the most recent fiscal year." (CNNMoney.com)



Stricter Regs on Investment Advice to Plan Participants Worry Mutual Fund Industry
Excerpt: "More restrictive investment advice regulations are coming now that the Labor Department has killed a controversial Bush administration proposal that would have permitted the mutual fund industry to provide direct investment advice to defined contribution plan participants. The key question remaining is how narrow the new Obama administration advice regulations will be, ERISA attorneys and pension industry lobbyists said." (Pensions & Investments)



[Opinion]
Assessing Assumptions in GAO Report on Automatic Enrollment Provisions Under 401(k) Plans

Excerpt: "Does this mean that auto-pilot arrangements are a bad idea? Not necessarily. The mandated nudges now under consideration would certainly help those employees who can afford to save but simply don't 'get around' to setting up an IRA or signing up for a 401(k) (or increasing their contributions, or reallocating their investments.) But even these better-off employees would have no assurance that their accumulations will be either safe or sufficient." (Karen Ferguson in the BNA Pension & Benefits Blog)




DATAIR Employee Benefit Systems, Inc. (Advert.)

DATAIR 5500 / PBGC / 1099-R / 5300 / FAS 158 Software (clickable image)

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  • FAS 132/158: Audit Letter, Worksheets, Schedules
sales@datair.com or call (888) 324-2474

Links to Items on Executive Comp, Benefits in General

[Guidance Overview]
Eighth Circuit Braden v. Wal-Mart Case Clarifies Standing Requirements For Class Action Plaintiffs

Excerpt: "The Eighth Circuit found very little correctly done by the district court in this recent opinion addressing threshold requirements for properly stating ERISA claims. The opinion offers a welcome clarification of recurring issues, such as standing and the specificity required in stating claims for relief. The gist of the complaint was that Wal Mart's ten billion dollar 401(k) plan paid excessive management fees and a number of improprieties involving the alleged sharing of these fees with the trustee." (Health Plan Law blog by Attorney Roy Harmon III)


[Guidance Overview]
Executive Compensation Year-End Update

Excerpt: "As 2009 draws to a close, employers should consider a number of important executive compensation-related issues and developments. . . . 409A Compliance . . . . Section 162(m) . . . . Compensation Discussion & Analysis . . . . Identify & Address 'Hot Button' Pay Practices." (McGuireWoods LLP)


[Guidance Overview]
Revisions to Incentive Plans of Public Companies May be Required by December 31, 2009, to Avoid Section 162(m) Deduction Limitations

Excerpt: "As a result of the position taken by the Internal Revenue Service (IRS) in Rev. Rul. 2008-13, public companies may need to amend their employment agreements, as well as their equity and other incentive plans, by December 31, 2009, to preserve the deductibility of performance-based awards for 2010 under Section 162(m) of the Internal Revenue Code." (Greenberg Traurig)


Employee Ownership Update for December 1, 2009
NCEO Executive Director Corey Rosen discusses a new study of 200 large corporations showing that companies retain a strong commitment to stock options and other forms of equity compensation at all levels; a lack of resolution on the IRS's stance toward ESOP account segregation and rebalancing; 11 Beyster, Kelso, and Smiley fellowships offered by Rutgers to PhD candidates; and nominations for the NCEO's board elections. (National Center for Employee Ownership)


Some Companies Rethinking Holiday Perks This Year
Excerpt: "In lieu of bonuses, holiday parties and client gifts, companies are giving away their own services and turning to old fashioned favors as a way to thank workers and customers." (Wall Street Journal)



Webcasts and Conferences

"Cross-Tested and Safe Harbor 401(k) Plan Design" Web Seminar
Nationwide on December 17, 2009
presented by SunGard Relius

"ERPA Test Review - Part 1" Web Seminar
Nationwide on January 5, 2010
presented by SunGard Relius

"ERPA Test Review - Part 2" Web Seminar
Nationwide on January 12, 2010
presented by SunGard Relius

To Roth or Not to Roth Archived Program
Nationwide on November 30, 2009
presented by SunGard

WISER’s Annual Retirement Symposium
in District of Columbia on December 3, 2009
presented by Women’s Institute for a Secure Retirement (WISER)

(Click to post your webcast or conference)

Press Releases

Despite Economic Pressures, Employers Enhancing Programs that Boost Worker Health and Productivity, Watson Wyatt/National Business Group on Health Survey Finds
Watson Wyatt

Newkirk Announces Upgrades to Online Member Communications System
Newkirk

US Department of Labor Sues to Distribute 401(k) Account Assets of Closed Overland Park, Kan., Business
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Defunct Blackstone, Va., Company to Protect Participants of Abandoned Retirement Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Labor Department Obtains Judgment Ordering Removal of 401(k) Plan Fiduciary for Tile Impressions Inc.
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Council Evaluates Senate Health Care Reform Measure
American Benefits Council

As Credit Woes Ease, Cash Flow and Pension Plan Volatility Are Among Top Finance Executives' Concerns, According to Towers Perrin Survey
Towers Perrin

Fidelity Teams With FundQuest to Make Annuities Available to Fee-Based Advisors
Fidelity Investments

Entrust Reports Record Growth in Self-Directed Retirement Investment Accounts
Entrust Group

New Guides Address Increased Tax Deductions For Long-Term Care Insurance
American Association for Long-Term Care Insurance

(Click to post your press release)

Employee Benefits Jobs

Senior Consultant
for The Segal Company
in CA

Pension Administrator
for Primark Benefits
in CA

401(k) Plan Specialist
for Retirement Plan Services, LLC
in MO

Director of Client Services
for Financial Services Company
in PA

Compliance Analyst
for T. Rowe Price
in MD

VP, Defined Benefit Product Management
for Prudential
in CT

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


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