Retirement Plans Newsletter

February 8, 2010


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EFAST2! Ready...Set…Go!

Our preparation software and web portal for e-signatures are fully certified and available for use. You cannot afford to delay! Ftwilliam.com has everything that you need for preparation of your 5500s as well as a web-portal for e-signatures. We also provide free webinars to get you up to speed on EFAST 2 and learn how to use our software. Got questions? Just call us at 800.596.0714 or email sales@ftwilliam.com.

[Guidance Overview]
Roth Conversion Reporting
Excerpt: "With the Pension Protection Act of 2006 permitting funds in a qualified plan, 403(b) or governmental 457(b) to be directly rolled to a Roth IRA as of 2008, provided the AGI was under $100,000 and, if married, the taxpayers filed jointly; there have been many questions about reporting these transactions on Form 1099-R. Coupled with the relatively new designated Roth source and the new Roth Conversion rules for 2010, there has been even more confusion about reporting the various transactions on Form 1099-R. [The target page provides] some fact sets and examples of Form 1099-R reporting."
(McKay Hochman Co.)

[Guidance Overview]
Determining If Your 403(b) Plans Are Subject to the Audit Requirement (PDF)
2 pages. Excerpt: "Large ERISA plans will be required to file audited financial statements beginning with the 2009 Form 5500 filing. A large plan is an ERISA plan with more than 100 participants at the beginning of the plan year. Small ERISA plans are generally exempt from the audit requirements provided the requirements of the DOL's small plan audit waiver are satisfied. A small plan is an ERISA plan with less than 100 participants at the beginning of the plan year."
(ERISA diagnostics, Inc.)

Analysis Finds Defined-Benefit Plans Outpace 401(k) Returns
Excerpt: "A Towers Watson analysis finds that defined-contribution plans don't replicate the advantage of defined-benefit pension plans and thus are unlikely to [out-perform] DB plans."
(Workforce Management; free registration required)

Text of Brief for Secretary of Labor As Amicus Curiae Supporting Defendant-Appellant Matschiner and Requesting Reversal
Excerpt: "The question presented in this case falls within that authority: whether, in light of the decision in Kennedy v. DuPont, 129 S.Ct. 865 (2009), holding that plan administrators must distribute benefits to beneficiaries in accordance with plan documents, ERISA either permits or requires a pension plan administrator to disregard a validly-executed beneficiary designation because the plan lacks a formal procedure through which a designated beneficiary can refuse benefits."
(U.S. Department of Labor)

Los Angeles City Pensions Since Early Retirement Incentive Program: The Facts, The Figures, The List
Excerpt: "In the first six months after City Hall offered the Early Retirement Incentive Program, 625 workers have actually retired with pensions averaging more than $1,000 a week with 32 of them getting pensions in excess of $100,000 a year, according to records obtained by OurLA.org. On June 26, 2009, the Mayor and City Council approved enhanced pensions with five years extra service credit and $15,000 in cash to 2,400 employees -- more than 10 percent of the civilian work force who are enrolled in the LACERS pension fund."
(OurLA.org)

Lawmakers/Companies Make Further Plea for Pension Funding Relief
Excerpt: "On a press conference call on February 4, an array of employers and retirement experts joined with Congressman Earl Pomeroy (D-North Dakota) to call for temporary pension funding relief."
(PLANSPONSOR.com)

U.S. Automakers Face Growing Deficits As Funds Bring Lower Rates of Return
Excerpt: "The pension plans of Detroit's Big Three automakers, covering nearly 1.3 million people, still face growing shortfalls even though Ford Motor Co. is making money again and its domestic rivals slashed costs dramatically in bankrup.tcy. The huge pension liabilities weighing down the companies' balance sheets are left over from the 'legacy' costs that for so long made Detroit automakers uncompetitive against their lower-cost foreign rivals."
(The Detroit News)

Utah State Workers Rally Against Bills to Change Retirement Benefits for Future Hires
Excerpt: "They argue that cutting pension benefits for future workers and removing a 1.5 percent 401(k) match for state and school workers would stifle recruitment and retention efforts."
(The Salt Lake Tribune)

Boston, Massachusetts Police Force Retirements Spike After Bonuses Cut
Excerpt: "Boston police and other departments across the state are grappling with a sharp increase in the number of officers resigning or retiring as the state slashes a generous bonus program that had boosted police paychecks for years."
(The Boston Globe)

DOL Investigating Geller Group LLC for Alleged ERISA Violations
Excerpt: "The Labor Department is investigating Geller Group LLC, a retirement plan administrator and registered investment adviser, for failing to disclose alleged ties to an accounting firm it recommended as an auditor and for other possible violations, according to former employees and others close to the investigation."
(Investment News; free registration required)

[Opinion]
Pension-Exchanges for IRAs and 401(k)s Would Strengthen President Obama's Initiatives
Excerpt: "[H]ere's a federalist 'public option' for the Treasury to consider -- a way for [states to provide retirement savings options] for the citizens of their respective states. I use the term 'public option' advisedly . . . . Treasury could first allow any state treasurer or statewide pension system to exchange a citizen's 401(k), 401(a), 403(b), 457 or IRA securities portfolio for a taxable retirement pension. States would have to adopt qualifying statutes to authorize these arrangements."
(Governing)

[Opinion]
Can the U.S. Government Require You to Get an IRA?
Excerpt: "One of the biggest priorities for the Middle Class Task Force led by Vice President Biden is a push to improve and standardize American retirement planning. This is where the Obama administration can make big changes. But whether average workers or financial service firms and insurance companies will be the chief beneficiaries remains to be seen."
(The Washington Post; free registration required)

[Opinion]
Pennsylvania Budget Must Deal with Pension Gap
Excerpt: "When Gov. Rendell proposes a new budget for Pennsylvania on Tuesday, he's going to have to stuff something in the wide, ugly gap between what the state has promised to pay future state and school retirees, and what the state has set aside to pay them. Will Rendell ask taxpayers to pay more? Or future retirees to accept less?"
(Philly Online, LLC.)




If You Sell, Support or Service 401(k)s, This is Your Meeting!

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

Four Creative, Low-Cost Ways to Educate Employees About Benefits
Excerpt: "One of the biggest challenges employers face when adding new benefits or conducting open enrollment is finding the time to educate employees about the changes or options. Here are some year-round tips for implementing effective benefits-education initiatives without breaking the bank."
(Workforce Management; free registration required)

[Opinion]
Placement of the Compensation Risk Disclosure in the Proxy Statement
Excerpt: "'The new rules do not specify where the disclosure should be presented. However, to ease investor understanding, the staff recommends that Item 402(s) disclosure be presented together with the registrant's other Item 402 disclosure. The staff would have concerns if the Item 402(s) disclosure is difficult to locate or is presented in a fashion that obscures it.'"
(Michael Melbinger via Winston & Strawn LLP)

[Opinion]
How to Get the Country to Solvency on Entitlements
Excerpt: "In 2013, when President Mitch Daniels, former Indiana governor, is counting his blessings, at the top of his list will be the name of his vice president: Paul Ryan. The former congressman from Wisconsin will have come to office with ideas for steering the federal government to solvency."
(George F. Will via The Washington Post; free registration required)

[Opinion]
Current Economic Situation No Excuse for ERISA Shortcuts
Excerpt: "Business owners and leaders who are facing financial challenges should consider a mounting series of recent court orders and federal prosecutions as strong reminders of the personal risk they may face for mismanaging employee benefit programs governed by the Employee Retirement Income Security Act of 1974."
(Employee Benefit News; free registration required)


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