Retirement Plans Newsletter
January 20, 2010

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2010 Orlando Advanced Pension Conference

2010 Orlando Advanced Pension Conference

Early bird discount extended to January 25. With a new administration in Washington, and a volatile economy, change is the only constant for retirement plan practitioners. Attend this important conference to stay up-to-date on current topics. Our agenda focuses on the most pressing pension issues, including: EFAST2, keeping current, Washington update, plan design, lost participants, restatement pitfalls and perspectives, beneficiary issues, 403(b) plans, Roth rollovers, and more. Plus, “Ask the Experts” workshop, concurrent sessions, and over 900 minutes of CE credits.
Register today and save $150.

SunGard’s Relius Education – Educational Resources for Employee Benefits Professionals

[Official Guidance]
New Submission Procedures for Individually Designed Plans: 5-Year Remedial Amendment Cycle for Individually Designed Plans Chart

Excerpt: "Because January 31,2010 is a Sunday, the deadline for Cycle D determination letter applications is extended to Monday, February 1, 2010. Note that some Cycle D plans with fiscal year plan years may make a one-time election to file in Cycle E under a special rule in section IV of the 2008 Cumulative List (Notice 2008-108). Since February 1, 2010 is also the first day of the Cycle E submission period, to avoid confusion as to whether a particular plan is filing under Cycle D or Cycle E, the IRS requests that a plan sponsor of a Cycle D plan filing on February 1, 2010, who is electing to file under Cycle E under this special rule, note this on a cover letter or on the application." (U.S. Internal Revenue Service)

[Guidance Overview]
Guidelines for Multiple Vendor 403(b) Plans: 2009 Form 5500 Aggregation (PDF)

10 pages. Excerpt: "These Guidelines describe certain approaches, expectations, roles and responsibilities of employers, aggregators and vendors in working together to complete the 2009 Form 5500. The intended benefits of these Guidelines include: Facilitating compliance with the new 2009 Form 5500 reporting requirements for ERISA-covered 403(b) plans. Creating a more efficient and cost effective process for employers to complete the 2009 Form 5500. Building consensus among aggregators and vendors to allow more consistent service levels to all employers." (The SPARK Institute)

[Guidance Overview]
Rollover Chart Updated: Rules As of 2010

Portability chart as of 2010: Rollover to Recipient Plan. (McKay Hochman Co.)

[Guidance Overview]
Plan Rollovers to a Roth IRA

Excerpt: "[Question]: In order to convert my plan account to a Roth IRA, do I have to make a direct rollover from the plan to the IRA? [Answer] No. A taxpayer may accomplish the conversion from a plan account to a Roth IRA either by a direct rollover from the plan to the IRA or by a 60-day rollover, in which the taxpayer receives the distribution and rolls over the distribution to a Roth IRA within 60 days of receipt." (SunGard Relius)

[Guidance Overview]
Supreme Court Denies Cert in Hecker ERISA Case

Excerpt: "The Court today denied cert in Hecker v. Deere & Co., . . . and so we are left with a troubling precedent in the ERISA excessive fees class action area. The denial of cert. was surprising both because the Court accepted cert. in an ERISA attorneys fees case just this past Friday, and as BNA Daily Labor Report put it, 'the case has spawned a large-scale debate among Employee Retirement Income Security Act practitioners, fiduciaries, and academics over the fiduciary responsibilities tied to the investment choices made for 401(k) plans.'" (Workplace Prof Blog)

Implications of the Financial Crisis for Long Run Retirement Security
Excerpt: "Managing retirement risk has become extraordinarily difficult in this era of financial turmoil, global interlinkages, and global population aging. It is particularly fraught since consumers must now engage in long-term contracts with themselves, employers, financial institutions, and governments, regarding the future of retirement financing. Moreover, these agreements will need to remain in force extraordinarily long, for fifty or even one hundred years into the future." (The Pension Research Council; registration required to download)

Profit Sharing Plans for Small Businesses
Excerpt: "This booklet highlights some of a profit sharing plan's advantages and some of your options and responsibilities as an employer operating a profit sharing plan. For more information, a list of resources for you and for prospective plan participants is included at the end of this booklet." (U.S. Employee Benefits Security Administration)

Some Predictions About What's in Store for 401(k) Plans in 2010 and Beyond
Excerpt: "Despite the continuing recession, 401(k) providers will still be engaging in what I call the 401(k) 'arms race' - that is, offering more and more features to plan sponsors. In the early 1980s, when 401(k) plans began to evolve, plan features were pretty basic. But as they grew more prevalent and competition became more intense, plans became more robust with the addition of daily valuations, loans, self-directed brokerages, Web access, investment education tools, multishare classes and fiduciary assistance. Here are three more plan features that you are likely to see more of in 2010 and beyond . . . ." (Employee Benefit News; free registration required)

Required Disclosures in Service Agreements
Excerpt: "We are seeing heightened enforcement activity by the DOL against broker-dealers and RIAs, often in tandem with the SEC, and we anticipate that the DOL will continue to use its enforcement authority to require written agreements with advance disclosures regardless of what the regulations may -- or may not -- require." (Reish & Reicher)

Investments for Cash Balance Plans
Excerpt: "When deciding to set up a cash balance plan, the general assumption usually is that the investment values and the benefit liabilities will always be approximately the same. In that situation, none of the partners would suffer significantly or benefit greatly, regardless of the performance of the markets. However, in our case, the departing partner gets $300,000 more than the value of the underlying investments, while the remaining partners are left to fund the $300,000 shortfall for that partner . . . ." (Reish & Reicher)

Actuarial Practice Note on AFTAP Certification Focuses on Documentation and Timing
Excerpt: "The American Academy of Actuaries Pension Committee has issued a revised practice note on certifying a pension plan's adjusted funding target attainment percentage (AFTAP). The AFTAP determines whether funding-based restrictions on accelerated payments, continued benefit accruals, plant shutdown benefits and benefit increases apply. The practice note provides information about current and emerging AFTAP certification practices, focusing primarily on accompanying documentation and certification timing." (Mercer LLC)

IRS Addresses 2009 Minimum Distributions Paid from 401(k)-Type Plans by April 1
Excerpt: "An IRS newsletter clarifies rollover and withholding rules for defined contribution plans . . . paying 2009 required minimum distributions (RMDs) in early 2010 (for example, to participants who reached age 70-1/2 in 2009). Many plans continue to pay 2009 RMDs, despite a waiver prompted by the financial crisis. If paid between Jan. 1 and April 1, 2010, 2009 RMDs must be treated as eligible rollover distributions, assuming they otherwise qualify for rollover." (Mercer LLC)

Second Consecutive Month of Increased Pension Funding Cannot Counteract Overall Deficit for 2009
Excerpt: "The assets of the largest 100 corporate pension plans, as measured by the Milliman 100 Pension Funding Index (PFI), increased by $5 billion during December due to investment gains. The asset gains were coupled with liability decreases of roughly $32 billion based on increases in discount rates. The net result is that the funded status for the pensions sponsored by these companies increased by $37 billion during December 2009. The funded ratio increased to 77.7% as of the end of the month." (Milliman)

Supreme Court Will Not Review 401(k) Suit Against Deere and Fidelity
Excerpt: "The U.S. Supreme Court today rejected a review of the dismissal of a lawsuit against Deere & Co. and two Fidelity Investments units, claiming unreasonable fees were charged for investment options in Deere's $3.1 billion 401(k) plan." (Investment News; free registration required)

Here's What the Supreme Court Will Do in Conkright v. Frommert

Excerpt: "At its heart, the case presents one fundamental question, though cloaked - like many ERISA cases - in a wide ranging and complicated documentary, factual, and judicial history. . . . Here though, the key issue is one of deference, and whether a court must continue to apply deferential review to a plan administrator's interpretation of a plan when the court has already rejected the administrator's earlier interpretation as being arbitrary and capricious." (Stephen Rosenberg of The McCormack Firm, LLC)

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]
IRS Update of Method Thresholds for Vehicle Fringe Benefits

Excerpt: "The IRS has updated for 2010 (Revenue Procedure 2010-10) the maximum allowable fair market value (FMV) of an employer-provided vehicle for which the cents-per-mile and fleet-average rules may be used in determining the value of an employee's personal use of the vehicle." (American Institute of Certified Public Accountants)

[Guidance Overview]
IRS Correction Program for Code Section 409A Document Violations: One Last Chance to Avoid 409A Income Inclusion and Penalties

Excerpt: "In addition to providing methods for correcting certain common Code Section 409A violations so that some or all income inclusion and penalties are avoided, the Notice provides guidance on certain commonly used language that will not generally result in a 409A document violation. Generally, arrangements under examination by the IRS are not eligible for correction, and not all document violations can be corrected under the Notice. However, many common unintentional failures can be corrected, including . . . ." (Poyner Spruill LLP)

[Guidance Overview]
IRS's Voluntary Correction Relief for NDCP Documents (PDF)

Excerpt: "A new IRS program allows nonqualified deferred compensation plan (NCDP) sponsors to identify plan provisions that do not comply with tax code section 409A and to promptly correct any such failures. This Client Action Bulletin outlines the eligibility requirements and other specifics contained in IRS Notice 2010-6." (Milliman)

The IRS Employment Tax National Research Project
Excerpt: "This month, the IRS with little official fanfare and no real advance warning, will begin a 'national research project' to study (1) payroll taxes, (2) fringe benefits, (3) independent contractor, (4) expense reimbursements and (5) other related 'payroll' issues." (Thompson Publishing Group Inc.)

Pay, Perks, and Pension Cuts Sought in California's Public Sector
Excerpt: "At a time when the salaries and retirement benefits enjoyed by public employees in California are among the most generous in the nation, a growing number of prominent leaders are calling on elected officials to cut government pay, perks and pensions rather than reducing services to poor, sick and disabled people." (Contra Costa Times)

Supreme Court to Clarify Who is Entitled to Attorney's Fees Under ERISA
Excerpt: "In accepting this case for review, the Supreme Court will resolve whether Section 502(g)(1) of ERISA, the attorney's fees provision, provides a district court discretion to award reasonable attorney's fees only to a prevailing party; and whether a party is entitled to attorney's fees under this section when she persuades a district court that a violation of ERISA has occurred, successfully secures a judicially-ordered remand requiring a re-determination of entitlement to benefits and subsequently receives the benefits sought on remand." (Littler Mendelson P.C.)

Webcasts and Conferences

2010 Benefits Boot Camp
in Georgia on March 10, 2010
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

Health and Welfare Plan Management for Mid-Sized Employers Conference
in Georgia on April 13, 2010
presented by University Conference Services

The 7th Annual World Health Care Congress
in District of Columbia on April 12, 2010
presented by World Congress

(Click to post your webcast or conference)

Press Releases

Research Indicates Participants in Incentive-Based Health Promotion Programs Have Lower Healthcare Costs
The Vitality Group

(Click to post your press release)

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Newly Posted Employee Benefits Jobs

Plan Administrator for Retirement Plan & ERISA Specialists
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in IL

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for Peritus Benefits and Investments, Inc.
in AR, IN, MS, OK

Account Service Representative
for Pension Specialists, Inc.
in CA

RFP Specialist
for The Standard
in OR

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