Retirement Plans Newsletter
January 4, 2010

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EFAST 2 5500 Software.

EFAST 2 5500 Software.

Three crucial questions you should ask your Form 5500 Software provider:
1. Is your Form 5500 software approved for EFAST 2?
2. Can I see a demo of how you are handling e-filing?
3. How much do you charge to e-sign using your software?
Itís not too soon to be thinking about these three questions and getting the right answers.
ftwilliam.comís software solutions will make your life easier and save you money. For more information, visit or call 800.596.0714.

[Guidance Overview]
EFAST2 Sample Correspondence for Signers Needing a DOL PIN

Excerpt: "[We provide] some background on the new EFAST2 5500 filing procedures and provide a sample form letter/email that may be sent out by 5500 filing preparers for their customers." (Fort William LLC)

Chart Projecting That the Baby-Boom Generation to Remain in the Labor Force
Excerpt: "The baby-boom generation -- those born between 1946 and 1964 -- is expected to remain in the labor force longer than previous generations." (U.S. Bureau of Labor Statistics)

The Value of TIPS in Pension and 401(k) Plans
Excerpt: "Plan sponsors should consider a number of factors when determining whether a TIPS investment would be a suitable alternative for their plans: Demographic distribution of plan participants; Range and characteristics of existing total plan and fixed income alternatives; Retention of retirement accounts by post retirees; Associated defined benefit pension plan benefits; Ability to educate/inform participants about TIPS; Utilization of advice facilities." (Fiduciary Investor)

Achieving Sustainable Retirement Withdrawals: A Combined Equity and Annuity Approach
Excerpt: "This research tests five retirement portfolio asset allocation strategies through both the retirement accumulation and distribution phases. Three of the strategies tested involve stocks and/or bonds, and two incorporate annuity contracts. Three of the portfolio strategies tested are often used as baseline cases in literature: (1) a portfolio that consists of 50 percent equities and 50 percent bonds, (2) a portfolio that consists of 100 percent equities, (3) a portfolio that adjusts asset allocation during the life cycle, reducing the equities percentage as the client ages, (4) a variable annuity strategy that includes a 5 percent living benefit guarantee, and (5) a 100 percent equities model that annuitizes upon achieving a predetermined value." (Journal of Financial Planning)

'Phased Retirement' and Its Paychecks Have Gained Popularity, But Watch for Drawbacks
Excerpt: "[A] phased retirement is not for everyone, and there are financial factors to consider in deciding whether you can afford to do this. Obviously, the primary financial benefit of taking a phased retirement is that you continue to get a paycheck, which can lessen the need to draw on your retirement savings, allowing the money to grow further. On the other hand, when you reduce your work hours and salary, that could have a direct impact on your employee benefits." (The Dallas Morning News)

DOL Investigations of Retirement Plans May Be Increasing
Excerpt: "The 5500 red flags include diversification ratios, low rate of return on contributions, untimely contributions, insufficient rents paid for property or insufficient interest paid on loans, loan or lease defaults, plans with a large percentage of assets in real estate, assets such as limited partnerships, high expense ratios, high administrative expenses, high attorney or accountant fees, noncash contributions, and non-exempt transactions with a party in interest." (

A Risk-Managed Approach to Designing Hospital Pensions for the 21st Century
Excerpt: "This paper proposes that plan sponsors add a financial risk management processes when reconsidering plan design. In many cases the level of risk for both DB and DC plans can be managed to a significant extent through more appropriate plan design and funding policies. Some of the principal risk areas to be assessed include long-term funding risk, short-term funding volatility risk and inflation risk in DB plans and longevity risk, inflation risk, funding risk and investment risk in DC plans." (TIAA-CREF Institute)

Next-Generation Target-Date Funds
Excerpt: "TDFs (along with their cousins, asset allocation funds) totaled less than 10% of DC plan assets at the beginning of 2009, but about 22% of current participant contributions are earmarked for them, according to R.G. Wuelfing & Associates, an industry research and consulting firm. TDFs had been a mere blip on the screen prior to the 2006 Pension Protection Act, which sanctioned them as QDIAs." (Employee Benefit Adviser; free registration required)

IRS Explains New Defined Benefit Automatic Approval Procedure
Excerpt: "Saying it has gotten 'numerous' questions from single-employer defined benefit plan sponsors or their actuaries about changes in plan valuation software, Internal Revenue Service (IRS) officials on Thursday said they would grant automatic approval of the method changes under certain circumstances." (

Should You Convert to a Roth IRA?
Excerpt: "The government is offering a tax-deferred window for those switching from a conventional IRA. But the tax break is not necessarily a good deal." (Los Angeles Times)

New Year's Resolution: Put Your Retirement Planning in Order
Excerpt: "January offers the perfect opportunity to do so. Year-end financial statements are on their way, and they'll provide a bird's eye view of how investment strategies performed during the stock market's decline and sharp rebound. Also, tax season isn't far off, so it's a chance to get a jump-start on totaling up expenses and income that can help with long-term budgeting." (The Wall Street Journal)

Proposal to Spell Out Projected 401(k) Income Has Critics Fearing Riskier Investing
Excerpt: "It might increase the amount of money people set aside for their retirement. Then again, it also might prompt workers saving for retirement to take on more risk than necessary in hopes of making up for not saving enough." (Chicago Tribune)

Five Reasons Why 401(k) Reform Must Happen in 2010: If You Don't Work for Trader Joe's You Probably Can't Retire

Excerpt: "For the most part, the only Americans who can afford to retire are those that work in the public sector, academics (who are covered by generous 401(k)-style plans), long-serving members of Congress or employees of Trader Joe's, the supermarket chain." (Retirement Solutions)

State and Local Pensions Plans Are on a Path to Failure

Excerpt: "The stock market's plunge since the Dow Jones industrial average hit an all-time high of 14,164 on Oct. 9, 2007, has cost state pension funds hundreds of billions of dollars. The hardest-hit states are those, such as California, Illinois and New Jersey, that made the most lavish underfunded promises. Still even relatively responsible states such as Virginia and Maryland have been hit hard." (The Washington Post; free registration required)

ERPA Exam Registration Deadline Approaching!

ERPA Exam Registration Deadline Approaching!

In partnership with the Internal Revenue Service, AIRE, LLC helps retirement plan professionals who must represent clients with respect to Form Series 5300 and 5500 become Enrolled Retirement Plan Agents (ERPAs). The registration deadline for the next Exam is January 5! Be sure to order your study aids and prep materials from today and register for the ERPA-Special Enrollment Examination (ERPA-SEE) as soon as possible!

Once registered, you must sit for the Exam between January 6 and February 17, 2010. Visit or for more information.


Executive Compensation; Benefits in General

Towers Perrin and Watson Wyatt Shareholders Approve Merger
Excerpt: "The shareholder approval comes after clearance by U.S. antitrust authorities and the European Commission. Stamford, Conn.-based Towers Perrin and Arlington, Va.-based Watson Wyatt expected the merger to take effect Jan. 1. The combined firm will operate under the name Towers Watson & Co." (Business Insurance)

GASB Issues OPEB, Bankrup.tcy Guidance Statements
Excerpt: "The rulemaking organization has released Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans and Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies." (

What the Year Past Could Mean for the Year Ahead in Employee Benefits

Excerpt: "Well, as we head toward 2010, it seems fair to say that this is not a repeat of 1987 or -- not yet, anyway -- a second Great Depression. Here's a look at the trends that were on our mind this past year -- and are just over the horizon." (

Press Releases

The Retirement Advantage, Inc. Unveils A New Brand Identity
The Retirement Advantage (TRA)

401k ASP Rebrands With Name Change
ASPire Financial Services

(Click to post your press release)

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Newly Posted Employee Benefits Jobs

ERISA/Benefits Attorney
for Baird Holm LLP
in NE

Pension Administrator
for Block Consulting Actuaries, Inc.
in CA

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