Retirement Plans Newsletter

February 4, 2010

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Restatement deadlines are looming. Let SunGard help.

Restatement deadlines are looming.  Let SunGard help.

EGTRRA Restatement Outsourcing Services – Deadlines are fast approaching. Don’t risk being non-compliant. Do you have 300 or more defined contribution plans to restate for EGTRRA? Outsource them to us. SunGard’s expert Document Management Services (DMS) staff can work as your “invisible” back office resource to help you through the restatement process. Already restate your plans? We offer all ongoing plan maintenance for an average cost of only $75 per plan, per year. Let us focus on your plan documents, so you can focus on growing your business. Contact Ellen Nasrallah at 800-326-7235, ext. 5968.

SunGard's Relius Documents

[Official Guidance]
IRS Archive of Published Guidance
A compilation of the guidance published between October 2000 and December 2009.
(U.S. Internal Revenue Service)

[Guidance Overview]
The Universal Availability Requirement for 403(b) Plans (PDF)
Excerpt: "An employee's right to defer is not universally available unless the employee is provided an effective opportunity to defer. Whether an employee has an effective opportunity is determined based on all the relevant facts and circumstances, including notice of the availability of the election, the period of time during which an election may be made, and any other conditions on elections."
(Benefit Consultants Group)

[Guidance Overview]
2010 Compliance Calendar for Retirement Plans
Note: Plan-year deadlines assume 12/31 plan-year ends.

West Virginia State Legislators Tackle Bill to Encourage Retirement Savings
Excerpt: "Senate Bill 437 would allow the state to set up Voluntary Employee Retirement Accounts, or VERAs. This program is designed to get more people saving for retirement, by giving workers without an employer-sponsored retirement plan a way to automatically deduct money from their paychecks."
(West Virginia Public Broadcasting)

The Impact of Automatic Enrollment on 401(k) Match Rates: A Methodological Note
Excerpt: "We recently completed a study showing that employers with autoenrollment have lower match rates than those without it, suggesting that employers may be trying to offset their higher costs. In contrast, the Employee Benefit Research Institute finds that employers with automatic enrollment have increased match rates since 2005. The two studies measure different concepts and use different time frames. A large sample of 401(k) plans reporting match rates before and after autoenrollment is needed to fully understand employer responses."
(Urban Institute)

The U.S. Retirement Market, Third Quarter 2009 (PDF)
32 pages. Excerpt: "Americans held $15.6 trillion in retirement assets at the end of the third quarter of 2009, accounting for 35 percent of all household financial assets in the United States, the Investment Company Institute reported today."
(Investment Company Institute)

Palm Beach County, Florida, Divided on 'Double Dipping' Loophole
Excerpt: "Despite a loophole that lets county employees retire only to return a month later and begin collecting salary and retirement checks at the same time, some county agencies have banned the practice."
(The Palm Beach Post)

The New Economic Reality and the Workplace Retirement Plan: Sixth Annual Workplace Report on Retirement Planning (PDF)
12 pages. Excerpt: "Perhaps the most striking finding in this Workplace Report . . . was that 84% of Americans say the time is ripe for enhanced, redesigned workplace retirement plans. In fact, across the board, workers appear eager to embrace automated features. At Prudential, we take that as a clear mandate to 'redefine retirement,' so that once again workplace retirement plans can adequately and appropriately support the retirement dreams of millions of American workers."
(Prudential Retirement)

Some Considerations When Reinstating Your 401k Match
Excerpt: "As companies begin to evaluate their programs to reinstate the match, [the target page lists] several key areas that employers should pay particular attention to . . . ."
(Rick Meigs via, LLC)

Brand Name Consultant vs. Independent Advisor to Assist in Management of a Retirement Program
Excerpt: "The Department of Labor on their website has stated that lacking investment expertise, a fiduciary will want to hire someone with the professional knowledge necessary to carry out the investment & other functions. ERISA has even included a safe harbor definition of a 'prudent expert' to be either: (1) A Registered Investment Advisor (2) A Bank (3) An Insurance Company "
(Thomas B. Bastin via

'3 at 50' Plan Could Triple Rialto, California's Unfunded Pension Liability
Excerpt: "An increase in the retirement benefits for police and firefighters that is set to begin next year will almost triple the city's unfunded pension liability, according to a cost analysis by the California Public Employees Retirement System. The '3 at 50' plan which allows policemen and firefighters with 30 years of service to retire as early as age 50 and collect up to 90 percent of their highest annual salary will boost the unfunded liability from $9.7 million to $26.8 million . . . ."
(San Bernardino Sun News)

Estimated 2010 Required Contributions and Credit Balances: Internal Plan Survey Data and Analysis
Excerpt: "This report updates our October 1, 2009 report on the funded status and contribution requirements for single employer defined benefit pension plans. Our goal in developing this update is to highlight some of the funding challenges faced by plan sponsors starting in 2010 and the potential effects of some funding relief proposals pending in Congress."
(Mercer LLC)

A Year After the Market Meltdown, a New Provider Landscape Emerges
Excerpt: "Sponsors especially want recordkeepers that are committed to the business and demonstrating organizational strength and stability amid the market volatility, says Laurie Nordquist, an executive vice president at Wells Fargo Institutional Trust Services. 'We saw a big 'flight to quality' trend in our inbound RFPs,' she says."

Towers Watson Study Finds DB Plans Outperformed DC Plans in 2007 and 2008
Excerpt: "A Towers Watson news release said DB plans outperformed 401(k) plans by roughly 1 percentage point in 2008, although both types of plans lost value, and while most DB plans incurred losses for 2008, some actually reported small positive returns. By contrast, all DC plans in the study had losses of at least 10%, and a few had losses greater than 40%, more than any DB plan in the study, according to the news release."

Defined Benefit Plan Sponsors Face Significantly Higher Contributions in 2010
Excerpt: "A Mercer news release said it estimates that among the 874 private sector plans it studied, aggregate required cash contributions for 2010 will be 400% higher than for 2009. Unlike the last major market correction in the early 2000s, the current economic environment and the limited availability of credit could place many plan sponsors in a difficult position, Mercer contends."

Wall Street Journal v. The Facts on Money Market Funds: Response to Wall Street Journal Feb. 3 Editorial
Excerpt: "ICI President and CEO Paul Schott Stevens sent the following Letter to the Editor to the Wall Street Journal on February 3, 2010. Your editorial, 'The SEC v. Investors' (Feb. 3), got it wrong. Wrong on the facts, wrong on the analysis, wrong on the strength of the SEC's rules, and wrong on the mutual fund industry's commitment to its investors."
(Investment Company Institute)

Obama's Automatic IRA, Annuity Schemes Would Be A Disaster
Excerpt: "'Given that fewer than 5% of the population contributes to personal IRAs, why would they choose to do so in the workplace?' said White, the author of America, Welcome to the Poorhouse. 'What's more, why are America's employee forced to bankroll their own retirement, rather than requiring higher employer contributions?'"
(Jane White via Retirement-Solutions, LLC)

ASPPA Comments Filed with DOL Requesting Clarification of Application of Exemption from ERISA Coverage for Certain 403(b) Arrangements
5 pages. Excerpt: "ASPPA recommends that in light of advances in technology since Regulation §2510.3-2(f) was first issued, DOL release 'informal' guidance to clarify that an additional relevant circumstance to be considered in applying the 'reasonable choice' requirement is recognition that an open architecture platform be judged by looking through the 'portal' to the funding media, funding products and annuity contractors available to employees on the platform."
(American Society of Pension Professionals & Actuaries)

ASPPA and Over 700 Firms Petition DOL to Modify Its Rules Regarding the Sharing of Signer Credentials Under EFAST2
51 pages. Excerpt: "We believe the DOL's current position (which is an absolute prohibition on sharing of credentials) creates an unnecessary burden on practitioners and plan sponsors. The DOL should help foster the establishment of retirement plans and work towards a system that reduces, rather than increases, plan costs (many of which may be borne by participants) and burdens to plan sponsors. The DOL can easily implement changes to the credential sharing parameters (see recommendations in supplemental letter) . . . ."
(American Society of Pension Professionals & Actuaries)

Five Reasons Why a 401k Plan Fiduciary Should Reconsider Using ETFs
Excerpt: "This perfect storm of a product eliminates the conflict-of-interest problem wrought forth by 12b-1 fees, offers virtual mutual funds you can trade anytime during the day (no more waiting until 4:00pm!) and has the allure of low cost. Who could ask for anything more! Sometimes something that appears too good to be true really is. Professionals have long known the potential pitfalls of ETFs. Only recently have these facts become more widely known."
(Pandamensional Solutions, Inc.)

Early Bird Registration Discount has been extended to Feb. 5!

Early Bird Registration Discount has been extended to Feb. 5!

The ASPPA 401(k) Summit | March 14 – 16, 2010 | Orlando World Center Marriott Resort

The ASPPA 401(k) SUMMIT is bigger and better than ever in 2010! Expect 140 exciting exhibits in the hall, dozens of top-notch workshop sessions like "Plan Designs for the Age of Obama," and the presentation of the prestigious Morningstar-ASPPA 401(k) Advisor Leadership Award. The SUMMIT offers 14 hours of ASPPA Continuing Education (CE) credit and is designed to comply with various CE programs, including ERPA CPE.
For more information and to register, click here: The ASPPA 401(k) SUMMIT.


Executive Compensation; Benefits in General

How Effective Is Your Company Clawback?
Excerpt: "Clawback provisions in employment agreements and compensation plans, which permit a company to recoup bonus or other compensation paid or owed to an employee, are on the rise. Shareholder groups, legislators and compensation reform advocates endorse clawbacks as an effective tool to prevent executives and other employees from retaining undeserved windfalls and to enhance pay-for-performance initiatives."
(Pillsbury Winthrop Shaw Pittman LLP)

Public Company Accounting Oversight Board Web Site Redesigned and Expanded
Excerpt: "A board news release said the site features a new layout, updated content organization, and an improved search function. More frequently viewed pages are now accessible from the home page and new pages have been added with information about the PCAOB's International program and Research & Analysis activities, according to the announcement."

New Edition of Accounting for Equity Compensation
Accounting for equity compensation is one of the most challenging and complex areas of stock plan administration. Written in plain English for non-accountants by leading expert Barbara Baksa, this book is a survival guide for understanding the impact of stock compensation (such as stock options, ESPPs, restricted stock, and SARs) on corporate financial statements.
(National Center for Employee Ownership)

Webcasts and Conferences

New Mental Health Parity and Addiction Equity Act Regulations: What You Need to Do to Comply
Nationwide on March 11, 2010
presented by EBIA / Thomson Reuters

Retirement Plan Fees
in Georgia on February 18, 2010
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

Press Releases

ASPPA Urges DOL To Modify EFAST2 System
American Society of Pension Professionals & Actuaries (ASPPA)

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