Retirement Plans Newsletter
January 19, 2010

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[Guidance Overview]
PowerPoint Presentation: Preparing Form 5500 Schedule C

19 slides. Excerpt: "On January 12th, 2010, the U.S. Chamber of Commerce co-sponsored a webinar in conjunction with the Securities Industry and Financial Markets Association and the Profit Sharing/401k Council of America to help plan sponsors address the practical issues they may face when filing the Form 5500 Schedule C." (U.S. Chamber of Commerce)


[Guidance Overview]
A Fiduciary Planning Guide for Plan Sponsors (PDF)

16 pages. Excerpt: "This calendar was designed to be used primarily by sponsors of single employer plans. While many of the deadlines contained within apply to multiple employer plans, some deadlines may differ." (Massachusetts Mutual Life Insurance Company)


[Guidance Overview]
DOL to Propose Expansion of Fiduciary Regulation to Cover Pension Consultants and Other Investment-Related Advisors

Excerpt: "EBIA Comment: As the DOL's fact sheet notes, the current regulatory definition of fiduciary that applies to investment advisors was issued in 1975 and has not been amended since then. During that time, however, plan practices and the financial marketplace have changed significantly. Expanding the range of investment-related advisory services that trigger fiduciary status will, the DOL hopes, improve the quality and impartiality of those services." (Employee Benefits Institute of America)


[Guidance Overview]
Updated IRS Procedures for Issuing Letter Rulings, Determination Letters, and Other Employee Plan Guidance

Excerpt: "EBIA Comment: These revenue procedures are required reading for anyone seeking plan-specific guidance from the IRS. Those new to employee benefits will welcome the procedures' practical tools, including sample formats and checklists for letter ruling requests, definitions of basic terms, user fee schedules, and descriptions of how the 2010 procedures differ from their 2009 counterparts." (Employee Benefits Institute of America)


[Guidance Overview]
Towers Watson Monthly Retirement Regulatory Round-Up, December 2009 (PDF)

3 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during December 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Watson)


Pension Obligation Bonds: Financial Crisis Exposes Risks
Excerpt: "Historically, governments have turned to two 'solutions' for managing their pension commitments in times of fiscal stress. Some governments choose to defer part of their annual contribution to the pension fund. However, some are obligated by statute to make the annual required contribution. In these cases, governments may choose to issue a pension obligation bond (POB) to fund their pension system." (Center for Retirement Research at Boston College)


Seven Penalty-Free Ways to Tap Your IRA Before Retirement
Excerpt: "[T]here are a few ways to crack your nest egg early without paying the usual 10 percent early withdrawal tax. Large medical bills, education expenses, and a first home purchase are among the Uncle Sam-sanctioned ways to spend your retirement stash. Regular income tax, however, will still apply to your withdrawal." (U.S. News & World Report)


Four Smart Fixes for Your 401(k)
Excerpt: "No matter how well you position your portfolio, you can't count on market gains alone to power your 401(k) to greater heights. The only sure way to keep your account balance growing is to contribute more to your plan. Yet only 23% of participants have boosted the amount they're saving in the past year, and 20% are contributing less, according to a survey by Wells Fargo." (Money Magazine via CNN Money)


How Seniors Change Their Asset Holdings During Retirement
Excerpt: "The age pattern of asset accumulation and decumulation varies considerably by income. High-income seniors increase assets at older ages. Middle-income seniors reduce assets in retirement, but at a rate that will not deplete assets within their expected life. Low-income seniors spend their financial assets at a rate that will mostly deplete them, leaving only Social Security and defined-benefit pensions at older ages." (Urban Institute)


BrightScope Launches Personal 401K Fee Report
Excerpt: "San Diego based BrightScope, recently launched to help people navigate their 401k retirement plans and . . . to maximize the benefits. Today, the startup is launching its Personal 401k Fee Report that will let participants [figure] out exactly how much they are paying in fees in their specific plan." (The Washington Post; free registration required)


Retirement Expert Urges Diversity in 401(k) Options
Excerpt: "Roger Ferguson, CEO of TIAA-CREF, which provides retirement services to 3.6 million active and retired educators and non-profit workers, talked with USA TODAY's Sandra Block about his ideas for improving the retirement system." (USA TODAY)


What to Consider When You Need to Reconsider Your 401(k) Plan Match (PDF)
Excerpt: "Eliminating or reducing a matching contribution isn't something any employer wants to do, but more and more are discovering that it's something they have to consider. In this situation, there's much to appraise[:] Can I reduce or eliminate a match and still maintain Safe Harbor plan status? Should I eliminate the match overall? Do I have other options?" (ING Institute for Retirement Research)


How to Fund a Roth IRA Conversion Through the 'Back Door'
Excerpt: "Here is where the 'back-door' method comes into play: As of Jan. 1, the federal government has lifted the $100,000 household income limit (again, modified adjusted gross income) on converting traditional IRA assets to a Roth. Having that limit removed makes it possible for people with higher incomes to move assets from traditional IRAs to Roth IRAs. First, you would fund a traditional IRA and then you could convert those assets to a Roth." (The Wall Street Journal)


ComAir ERISA Litigation Website
Excerpt: "Members of the Settlement Class include all persons who were participants in or beneficiaries of the Comair Savings and Investment Plan at any time between December 31, 2004 and March 21, 2006 and whose accounts included investments in Delta common stock. The Settlement will provide One Million Eight Hundred Seventy Five Thousand U.S. Dollars ($1,875,000.00) not later than forty-five (45) calendar days following final approval of the Settlement into an interest-bearing escrow account at a financial institution identified by Plaintiff's Counsel." (The Garden City Group, Inc.)


Baltimore County, MD Pension Changes Up for a Council Vote
Excerpt: "The Baltimore County Council will deal with a pair of competing pension reform plans Tuesday. Each bill was drafted by a councilman who is considering a run for the county executive's job. Both are efforts to limit the generous benefits available to council members and respond to a public outcry over the current system that allows veteran legislators to collect their full salary for life after serving 20 years." (The Baltimore Sun)


Is Your 401(k) One of the Best?
Excerpt: "Most major companies offer a 401(k) plan for employees -- but not all such plans are alike. From the amount of matching funds employers offer to the quality of the stocks and funds available, the variations among 401(k)s can make a huge difference in their participants' returns. Here are some of 2009's highest-rated plans, courtesy of the folks at BrightScope . . . ." (The Motley Fool)


[Opinion]
Broker-Dealers and Other Non-Fiduciaries As Fiduciaries?

See item #5 on the target page. Excerpt: "The fiduciary standard found in ERISA merits application to all investment advisers. The beauty for broker-dealers, though, is that even with this seemingly worst-case outcome there is still a way for them not only to avoid being a fiduciary but also to thrive in the qualified retirement plan market as they never have before. This newly-found prosperity exists not at the plan level, per se, but among the many plan participants who can provide a multiple of revenue for broker-dealers." (Cypen & Cypen)


[Opinion]
12(b)-1 Fees: The So-Called Marketing and Distribution Charge Presents Conflicts, Confusion and Adds to Costs

Excerpt: "Since they were introduced by the Securities and Exchange Commission 30 years ago, 12(b)-1 fees have been a source of controversy. Ostensibly, they were intended to support sales, marketing and distribution efforts that theoretically drive up demand for mutual fund shares and permit fund companies to drive down expenses through economies of scale, which has been promoted by the industry as good for the investor. However, there is scant evidence to suggest that investors have benefited from paying the fees." (Investment News; free registration required)




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 www.asppa.org/bookstore to order now!

ASPPA


Executive Compensation; Benefits in General

[Official Guidance]
Final SEC Regs: Shareholder Approval of Executive Compensation of TARP Recipients (PDF)

7 pages; effective date is February 18, 2010. Excerpt: "[T]he Emergency Economic Stabilization Act of 2008 requires companies that have received financial assistance under the Troubled Asset Relief Program ('TARP') to permit a separate shareholder advisory vote to approve the compensation of executives, as disclosed pursuant to the compensation disclosure rules of the Commission, during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding. The amendments are intended to help implement this requirement by specifying and clarifying it in the context of the Federal proxy rules." (U.S. Securities and Exchange Commission)


[Guidance Overview]
IRS Relief and Voluntary Correction Program for Certain Section 409A Document Failures

The document includes an appendix titled: Document Failures, Corrections, and Relief. (Proskauer Rose LLP)


[Guidance Overview]
Towers Watson Monthly Regulatory Round-Up on Executive Compensation, December 2009 (PDF)

4 pages. Excerpt: "The Monthly Regulatory Round-Up is a high-level summary of legal and regulatory developments that occurred during December 2009 that may be relevant to large employers. Developments are sorted according to federal legislative developments, federal regulatory guidance, other developments (e.g., significant litigation, studies, select state law developments)." (Towers Perrin)



Press Releases

Hewitt Associates Enhances Absence Management Offer by Adding Participant Advocacy Services
Hewitt Associates LLC

ERIC Calls for Major-Employer Priorities for Final Health Care Bill
ERIC (ERISA Industry Committee)

Actuarial Consultants, Inc. (ACI) Adds Jeff Esmond As Consulting Administrator To Hawaii Office
Actuarial Consultants, Inc.

The SPARK Institute Releases Final 5500 Guidelines For Multiple Vendor 403(b) Plans
The SPARK Institute

FutureOffice Network Announces the Launch of a New Website Available for Group Insurance Brokers and Accountants
FutureOffice Network

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