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Retirement Plans Newsletter
December 21, 2009 
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DATAIR 5500 / PBGC / 1099-R / 5300 / FAS 158 Software
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[Guidance Overview]
Cycle E Cumulative List
Excerpt: "The 2009 List of Cumulative Changes for Cycle E plans has been issued as IRS Notice 2009-98. Cycle E is for individually designed plans whose EIN ends with a 5 or a 0. Cycle E starts February 1, 2010 and ends January 31, 2011." (McKay Hochman Co.)
[Guidance Overview]
Union May Indemnify Employer for Withdrawal Liability Owed to Multiemployer Plan
Excerpt: "A union may use a collective bargaining agreement to indemnify an employer for the withdrawal liability owed by the employer to a multiemployer plan, the U.S. Court of Appeals in Philadelphia (CA-3) has ruled in Pittsburgh Mack Sales & Service, Inc. v. International Union of Operating Engineers, Local Union No. 66." (Wolters Kluwer)
[Guidance Overview]
California Judge Invalidates Union President Pension Benefit
Excerpt: "A California state judge has struck down a San Diego city pension benefit that allowed union presidents to tack their union salaries onto their city salaries for benefit calculation purposes." (PLANSPONSOR.com)
[Guidance Overview]
ESOP Planning 2009: Plan Expenses
Excerpt: "Since expenses for most ESOPs are paid outside of the plan, fees are typically not reviewed as closely. However, a due diligence review would still be beneficial. Are the fees that you are paying reasonable? Are they competitive in the marketplace? While it is important to have competent ESOP advisors who you trust, does the cost of using the advisors exceed the benefits that you are receiving? A thorough analysis, which may or may not include obtaining proposals from other firms, could result in lower fees or more included services, and you may not even have to switch advisors to obtain this adjustment." (The One-Stop ESOP Blog)
[Guidance Overview]
IRS's 2009 Cumulative List of Changes for Cycle E Plans and Extension of Diversification Amendment Deadline
Excerpt: "EBIA Comment: All sponsors of Cycle E plans (and other plans filing in Cycle E) and their advisors should carefully review the 2009 Cumulative List to ensure that their submissions address the issues the IRS has specifically identified for review in the determination letter process. Of course, to be qualified, plans must comply with all relevant qualification requirements, even those that are not on the list." (Employee Benefits Institute of America)
Equity Abandonment in 2008 -- 2009
Excerpt: "Amid the dramatic stock market declines of 2008 and early 2009, some investors reduced their allocations to equities. But did many investors 'abandon' stocks by selling substantially all of their equity holdings? This research note presents findings on equity abandonment after analyzing the activity of 2.7 million Vanguard IRA investors, from the beginning of 2007 through October 2009." (The Vanguard Group, Inc.)
Perspectives on Retirement System Reform for the 21st Century
Excerpt: "This Policy Brief provides essays from five experts in retirement research and policy analysis offering their perspectives on worthwhile reforms to the U.S. retirement system. The authors agree that retirement system reforms are needed to ensure that future generations of American workers have a high likelihood of an adequate and secure retirement income." (TIAA-CREF Institute)
401(k) and Profit Sharing Plan Eligibility Survey 2009 (PDF)
11 pages. Excerpt: "This is the 12th year that PSCA has collected defined contribution plan eligibility data. The changes over time have been significant. In 1998, only 24 percent of plans allowed employees to begin contributing to their 401(k) plans immediately upon employment. This percentage has more than doubled; 57.4 percent of all plans and 71.1 percent of plans with 1,000 or more employees now permit immediate participation in their 401(k) programs." (Profit Sharing / 401k Council of America)
PPA Compliance and Investment Reviews Offer 403(b) Plan New Options
Excerpt: "A large regional healthcare client requested a full compliance and investment review of its 403(b) plan to ensure it was prepared for the implementation of the final 403(b) regulations. The regulations imposed a number of new requirements on sponsors of 403(b) plans. The most significant requirement was that all 403(b) plans be in writing, which was a huge change for sponsors who had limited involvement in the operations of the plan." (Milliman)
GAO Report Finds Confusion Over Form 5500 Schedule C Reporting and Recommends Additional Guidance
Excerpt: "EBIA Comment: While focusing primarily on 401(k) plans, the GAO report highlights issues and concerns over the expanded Schedule C reporting requirements that will be of interest to both pension and welfare plan sponsors and their service providers." (Employee Benefits Institute of America)
[Opinion]
A Company's Retention Strategy Should Include Focus on Delivering a Highly Valued DC Program and on Increasing Plan Participation (PDF)
Excerpt: "Companies need to start taking action now so that in the future they will retain the high quality, committed workers they need to be successful in the future. The most successful companies will be those that have successful strategies for limiting voluntary turnover, which is inconvenient, expensive, and goes directly to the bottom line." (Profit Sharing / 401k Council of America)
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Executive Compensation; Benefits in General
[Guidance Overview]IRS Chief Counsel's Advice on Year-End Bonus Accruals (PDF)
Excerpt: "As the end of the year approaches, many companies are establishing a 2009 bonus accrual so that they can take a 2009 deduction for bonuses paid early in 2010. An Internal Revenue Service Chief Counsel Advice, released December 4, 2009, provides a useful reminder that an accrual for bonuses must meet certain conditions for the bonuses to be deductible in the year earned, rather than in the year paid. Thus, companies should carefully consider how any year-end bonus accrual is structured." (Sutherland Asbill & Brennan LLP)
[Guidance Overview]
Risk Assessment under SEC's New Final Executive Compensation Disclosure and Governance Rules
Excerpt: "The requirement for assessing whether the company's executive compensation plans encourage risk taking is included in the final rules. However, there are a couple of clarifications that should lessen the burden it imposes on reporting companies." (Michael Melbinger via Winston & Strawn LLP)
[Guidance Overview]
SEC's New Disclosure Rules Regarding Risk, Compensation, and Corporate Governance (PDF)
3 pages. Excerpt: "A number of the changes will require companies to gather additional information and in some cases, action by the board or a committee. As you begin to review how the changes impact your company's filings and processes, you will also need to start gathering the required information. Steps that can be taken today include revising (or supplementing) your annual Director & Officer Questionnaires and revising your prior year disclosures, including total compensation, for the change in reporting of stock awards and option awards." (Holme Roberts & Owen LLP)
[Guidance Overview]
SEC Amendments to Proxy Disclosure Rules Relating to Compensation and Corporate Governance (PDF)
4 pages. Excerpt: "The Commission clarified or changed several key areas under the amendments in response to comments received on the proposed amendments. The amendments will have an immediate impact on the 2010 proxy season, and companies should plan accordingly to comply with the amendments. This letter provides a highlight of the key items that were updated or changed in the final amendments . . . ." (Frederic W. Cook & Co., Inc.)
[Guidance Overview]
SEC's Expansion of Disclosures on Risk, Compensation and Corporate Governance (PDF)
3 pages. Excerpt: "The Commission's adopting release can be found at http://www.sec.gov/rules/final/2009/33-9089.pdf. The July 2009 proposing release also included amendments to the proxy solicitation process, which the SEC has deferred for consideration together with the pending shareholder access rule proposal." (Drinker Biddle)
Same-S.ex Spousal Case a Preview for D.C.
Excerpt: "The federal Defense of Marriage Act means the U.S. government cannot grant spousal benefits to federal workers in same-s.ex marriages, a government lawyer said in a claim likely to be repeated when g.ay marriage comes to the District." (The Washington Times)
Savings Rate of Americans Up
Excerpt: "This was the year of the return to financial sobriety -- if you judge such things by the nation's personal savings rate. That rate -- which was 4.4 percent in October, according to the Commerce Department's Bureau of Economic Analysis -- subtracts what we collectively spend from what we make and then expresses the result in percentage terms." (The New York Times; free registration required)
Philadelphia Police Contract Raises Salaries, But Long-Term Cuts Seen in Pension and Health Costs
Excerpt: "The five-year contract that arbitrators awarded Philadelphia police officers last week stands to save taxpayers hundreds of millions of dollars - just not any time soon. Future mayors will owe Michael Nutter big for putting the brakes on long-accelerating pension and health-care costs that have consumed a bigger slice of the city's spending year after year." (Philly.com)
Webcasts and Conferences
2010 IBI/NBCH Health & Productivity Forumin Texas on February 8, 2010
presented by National Business Coalition on Health and Integrated Benefits Institute
MBGH 30th Annual Conference
in Illinois on May 6, 2010
presented by Midwest Business Group on Health
(Click to post your webcast or conference)
Press Releases
U.S. Labor Department Sues to Appoint Independent Fiduciary for 401(k) Plan Abandoned by Rochester, NY, EmployerU.S. Department of Labor, Employee Benefits Security Administration (EBSA)
RSM McGladrey Expands its Focus on Retirement Services
RSM McGladrey, Inc.
(Click to post your press release)
Newly Posted Employee Benefits Jobs
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