Retirement Plans Newsletter
January 11, 2010

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EFAST 2 5500 Software.

EFAST 2 5500 Software.

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[Guidance Overview]
EFAST2 is Up and Running for Electronic Filing

Excerpt: "On December 31, 2009 (a day earlier than predicted), the DOL made available on its website the registration procedure for obtaining credentials (e.g., filing signer credentials). In addition, for those preparers who wish to use DOL's Form 5500 filing system - IFILE - the DOL has also made available its IFILE system." (SunGard Relius)

[Guidance Overview]
Start Preparing for Increased Reporting to PBGC

Excerpt: "The Pension Benefit Guaranty Corp. has proposed major changes to its rules on 'reportable events,' which are events that may indicate a need to terminate a PBGC-covered single-employer pension plan. These changes, proposed on Nov. 23, 2009, would significantly increase reporting to PBGC and, as a result: [c]reate greater exposure to penalties of up to $1,100 per day for reporting delinquencies [; and] [c]reate new challenges and potential defaults in the context of corporate loan and other agreements. [Click on the link under 'Items of Interest' on the target page.]" (Keightley & Ashner LLP)

[Guidance Overview]
EFAST2 Ready for Online Form 5500 Filings

Excerpt: "Plan sponsors can now take full advantage of a new federal government system for online filing of the required annual report to the Employee Benefits Security Administration (EBSA) at the U.S. Labor Department." (

[Guidance Overview]
Refresher on Roth: What You Need to Know

Excerpt: "When rolling over assets from a retirement plan into an IRA, a decision on what type of IRA is right needs to be made. Determining the taxability of the rollover may help with this decision. In order to determine the taxability of the rollover, it must be determined what type of money is being rolled into the IRA from the retirement plan, pre-tax or after-tax money. There is an option to roll retirement accounts into a traditional IRA with no tax affects or to a Roth IRA where taxes will apply." (TRI-AD)

[Guidance Overview]
Roth IRA Conversions Post 2009

Excerpt: "In taxable years beginning after December 31, 2009, the AGI limitation that has prevented many taxpayers from converting traditional IRAs to Roth IRAs is eliminated. In addition, there is a one-time bonus in the law regarding income recognition. A taxpayer who makes a conversion in 2010 may elect to recognize all the income in 2010 or spread the income over the next two years. The wording of the law is a bit odd: '. . . shall be so included ratably over the two-taxable-year period beginning with the first taxable year beginning in 2011.'" (AccountingWEB)

[Guidance Overview]
Department of Labor Final Regulations on Form 5500 Schedule C

Third item in target newsletter. Excerpt: "The 2009 Schedule C requires that all service providers receiving $5,000 or more to be reported, as well as fiduciaries and other specified service providers receiving more than $1,000 in indirect fees. The new Schedule C must be used to report both direct and indirect compensation received by service providers in connection with services provided to employee benefit plans. There is also an alternative reporting option for eligible indirect compensation." (TRI-AD)

[Guidance Overview]
Deferral of Unused PTO Time into Retirement Plans Gives Employees Another Retirement Savings Tool

Excerpt: "Recently-published IRS guidance allows employers/employees to defer unused paid time off (PTO) into a qualified retirement plan. Revenue Rulings 2009-31 and 2009-32 state that the PTO plan must be a sick and vacation leave plan compliant with Internal Revenue Code Section (IRC) 409A and 1.401A-1(a)(5). There are several administrative issues surrounding these new rules based on the PTO plan's design." (TRI-AD)

The Pensioners Versus the Pension-less
Excerpt: "The haves and have-nots in retirement will largely be defined by who is offered and best utilizes a retirement plan at work. Only about half of private sector workers had any sort of employer-sponsored retirement plan in a given year between 1979 and 2008 . . . ." (U.S. News & World Report)

New Rules Ease Roth Conversions, but Benefits Vary
Excerpt: "Roth's benefits extend beyond its possible tax advantages. Unlike traditional I.R.A.'s, you are not required to take required minimum distributions once you turn 70 1/2 , which makes the Roth an effective way to leave money to heirs -- or to save for emergency expenses later in life. And because withdrawals are not counted as income, what you take out won't affect whether your Social Security benefits are taxed. (Some people with high retirement income must pay taxes on a percentage of their benefits.)" (The New York Times; free registration required)

Underfunded Pensions and Executive Compensation
Excerpt: "The Government Accountability Office released a report detailing the executive compensation practices of 10 firms that also terminated (in connection with bankrup.tcy) the underfunded pension plans they sponsored. In this article, we review the findings of the report and their potential implications on the link between pension funding and executive compensation." (J.P. Morgan Compensation and Benefit Strategies)

Enduring Confidence in the 401(k) System: Investor Attitudes and Actions (PDF)
PowerPoint presentation of 14 pages of charts. (Investment Company Institute)

Fact Sheet: Definition of Fiduciary Regulation (Investment Advice)
Excerpt: "EBSA plans to enhance retirement security by amending the regulatory definition of 'fiduciary' for plan investment advisers to include pension consultants and other plan advisers who do not meet the current regulatory definition, ultimately supporting the Secretary's good jobs for everyone policy.' EBSA plans to enhance retirement security by amending the regulatory definition of 'fiduciary' for plan investment advisers to include pension consultants and other plan advisers who do not meet the current regulatory definition, ultimately supporting the Secretary's good jobs for everyone policy. (U.S. Employee Benefits Security Administration)

Retiree Annuities May Be Promoted by Obama Aides
Excerpt: "The government is looking at ways to promote the conversion of 401(k)s and IRAs into steady payment streams after a significant decline in plan balances[.]" (BusinessWeek)

Target-Date Funds Bounced Back in 2009, Making Up a Majority of Their Steep 2008 Losses
Excerpt: "Some believe a return to profit may ease investor worry about these retirement funds and move the push for regulation to the back burner. But others think now is the time to ratchet up regulation before the next recession burns more investors." (Financial Planning)

As 401(k) Accounts Spring Back, Calls for Reform Recede
Excerpt: "[With the stock market's stunning rebound since March,] the urgency felt for reforming the 401(k) system has dissipated. Federal legislation designed to improve disclosure of fees and to guard against conflicts of interest is on hold while Washington deals with healthcare. And enthusiasm for a fundamental revamping of the entire system has waned considerably." (Los Angeles Times)

Board Overseeing Colorado's Troubled State Pension Plan Approves Proposal by Lawmakers to Fix It
Excerpt: "The Public Employees' Retirement Association (PERA) Board of Trustees has approved Senate President Brandon Shaffer's recommended changes to the PERA Board's legislative proposal. Those changes include increasing employee and employer contributions by 2% and reducing cost-of-living increases for current retirees from 3.5% this year, capping them at 2%, according to the Associated Press." (

For Women As a Group, Economy Not Impacting Retirement Strategies
Excerpt: "A new survey indicates that the economic downturn hasn't done much to shake up the retirement plans of some women. In fact, the Transition Network's 2009 member survey reveals that a large percentage of its membership - women over 50 with at least a Bachelor's degree - have not changed their spending or their retirement strategies despite the recent economic downturn." (

City Mayors' Pensions Often Generous
Excerpt: "Pension analysts say city mayors' pension benefits spotlight a scarcely noticed detail of the continuing national debate over the appropriateness of fixed-payment pension plans for government employees - that elected officials in charge of public pension plans often enjoy the most generous retirement packages." (The Baltimore Sun)

Ohio Public Employee Pension System Isn't Sustainable Without Some Changes
Excerpt: "Like it or not, lawmakers will be asked this year to overhaul the state's public pension systems that serve 1.7 million Ohioans and cost local governments more than $4 billion a year. It'll be an epic struggle among powerful interest groups to determine how the burden of shoring up the pension systems is shared." (Dayton Daily News)

Vermont Teacher Pensions in Peril As State Considers Rolling Back Benefit in Hunt for Savings
Excerpt: "The commission report says the changes to teacher and state-worker retirement plans would trim $29 million next year alone and slow the state's obligation to pay for the program, now scheduled to balloon from $73.5 million to $105 million next year. Without changes, the system might not survive, said Jeb Spaulding, Vermont state treasurer and a member of the retirement commission." (Burlington Free Press)

Bill Aims to Simplify State Pension Payments to Ex-Spouses in Kentucky
Excerpt: "Under a state law that some legislators are hoping to change in this session, state pensions can be considered marital assets in divorce settlements. But it's up to the ex-spouse -- not the retirement plan administrators -- to make the payments." (The Courier-Journal and

Efforts to Raise 401(k) Participation Have Ugly Side
Excerpt: "It's clear that automatic enrollment and simple investment options such as target-date funds have boosted 401(k) participation and retirement savings. But they've also led to higher fees, lower company-matching contributions, and higher investment risk and expenses, studies show." (USA TODAY)

Humor: The 401(k) Sucker Punch

Excerpt: "If I were tasked with the responsibility of creating a really terrible 401(k) plan, here's how I would do it. The first critical decision would be to retain a broker as an adviser to the plan. An insurance company could do the job as well, but brokers have a lot more experience acting against the best interest of their clients." (Daily Finance)

Special Offer With Your Preorder of The ERISA Outline Book, 2010 Edition

Special Offer With Your Preorder of The ERISA Outline Book, 2010 Edition

Valued by every practitioner and recommended for every ERPA candidate, the ERISA Outline Book, 2010 Edition by Sal L. Tripodi, J.D., L.L.M. offers six volumes of vital information on everything you need to know. Highlights include: IRS guidance on the waiver of 2009 required minimum distribution; automatic enrollment guidance from the IRS and Treasury; guidance on discontinuing safe harbor nonelective contributions; EFAST2 electronic filing system and DOL guidance; reporting guidance for 403(b) plans, guidance on deferrals from paid time off plans, court cases on scrivener's errors, and over 100 new rulings, guidances and regulations affecting retirement plans.

Order your copy today and receive the 2009 Online Edition, valued at $535, for only $200! Visit to order now!


Executive Compensation; Benefits in General

[Guidance Overview]
New Executive Compensation and Corporate Governance Rules for 2010 Proxy Season

Excerpt: "A summary of the new rules is set forth below and the text of the SEC's adopting release for the new rules is available at In addition, the SEC staff has published a series of compliance and disclosure interpretations to address transition reporting which are available at:" (Seyfarth Shaw LLP)

[Guidance Overview]
Correction Program for 409A Plan Documents

Excerpt: "Only certain types of document failures are eligible for relief under Notice 2010-6. Some of the plan provisions that may be 409A violations and eligible for correction are . . . ." (Holland & Hart LLP)

Webcasts and Conferences

EFAST 2 - What You Need to Know
Nationwide on January 12, 2010
presented by

Health & Welfare Benefit Plans Legislative & Regulatory Update
Nationwide on February 18, 2010
presented by TRI-AD

Retirement Plans Legislative Update
Nationwide on January 21, 2010
presented by TRI-AD

Value-Based Purchasing: What Health Plans Are Doing To Improve Quality Among Their Network Providers
in Maryland on February 4, 2010
presented by Worldwide Employee Benefits Network (WEB) - Baltimore Chapter

(Click to post your webcast or conference)

Press Releases

PBGC Protects Pension Plans at GB Retailers and Gramex Retail
Pension Benefit Guaranty Corporation (PBGC)

PBGC Assumes Pensions of Mid-States Express Inc.
Pension Benefit Guaranty Corporation (PBGC)

Newport Group Appoints Two New Regional Directors
Newport Group, The

New Orleansí Eustis Benefits Is Newest BAN Member
Benefit Advisors Network

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