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Retirement Plans Newsletter

February 22, 2010

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The Internal Revenue Service (IRS) issued 403(b) regulations, which became effective in January 2009, replacing regulations that were more than 40 years old. Most 403(b) plans need to comply with new plan document requirements, changes to coverage and non-discrimination testing rules, and limitations to transfers and exchanges. Look to SunGard for 403(b) solutions. For more information, read more about our solutions or call 1-800-326-7235, ext.1100.
Sponsored by SunGard

[Official Guidance]
Text of EBSA Field Assistance Bulletin No. 2010-01: Annual Reporting and ERISA Coverage for 403(b) Plans
Excerpt: "The Department received questions on the scope of and conditions for the relief provided by [Field Assistance Bulletin 2009-02], as well as questions concerning the scope of the safe harbor regulation at 29 CFR 2510.3-2(f). This Bulletin supplements FAB 2009-02 by responding to many of those questions."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
DOL's Third 403(b) FAB Designed to Give Plans and Accountants Some Reporting and Disclosure Guidance
Excerpt: "The DOL issued its highly anticipated 403(b) Frequently Asked Questions as part of a Field Assistance Bulletin, FAB 2010-01. The seriousness in which the DOL is taking these 403(b) issues is reflected in the fact that it was issued as a FAB, and not merely the sort of informal guidance offered by a simple FAQ. As one DOL staffer mentioned to me, though a FAB nay not have a whole lot more legal weight than an FAQ, it does speak to the weight the DOL is giving to the matters at hand. There are now three DOL 403(b) FABs: 2007-2; 2009-2 and 2010-1. The three of these should be read together when seeking answers, as they constitute substantial regulatory guidance."
(Robert J. Toth, Jr.)

[Guidance Overview]
Participants not Due Retirement Benefits on Wages not Paid
Excerpt: "A federal court has found that an employer owed no fiduciary or recording obligations under the Employee Retirement Income Security Act (ERISA) for hours allegedly worked but not paid."

Eight Factors that Determine Your Final 401(k) Balance
Excerpt: "Your 401(k) balance on the eve of retirement obviously depends on how much you save over your working life and on the performance of your investments. But there are other factors that influence the size of your next egg, including how early you start saving and when you leave the workforce. Fees, expenses, and early 401(k) withdrawals can affect your investment returns as well. Here are eight factors that determine the final balance of your 401(k)."
(U.S. News & World Report)

Is a Department of Labor Investigation in the Future of Your Plan? (PDF)
3 pages. Excerpt: "Recent events suggest that the number of DOL plan investigations and penalties will increase. The first is the recession. Whenever the stock market retreats and plan accounts go down, participants contact the DOL to complain about their plans. A sizable percentage of DOL plan investigations begin based upon these phone calls."
(Benefit Consultants Group)

The DB(k) Plan Has Arrived
Excerpt: "It seeks to give workers at small companies more retirement security by making it less of a hassle for their employers to sponsor both a defined benefit plan and a defined contribution plan, and giving workers an easy way to put aside money."

ITS Opinion Letter Program for 403(b) Plans Set to Launch April 1
Excerpt: "At the annual Washington Non-Profit Legal & Tax Conference, Jason Levine, an IRS employee plans tax law specialist, said the program launch will coincide with a redesign of the agency's Web site information on 403(b) plans, according to BNA. Levine said the opinion letter program for 403(b) prototype plans will review only plan documents and adoption agreements, and if a plan document and its investment documents contain conflicting provisions, the plan document 'will control.'"

NYC Redraws Pension Placement Agent Regs
Excerpt: "With heightened attention being paid around the country to the role of private placement agents at public pension plans, New York City is revamping the regulations regarding agents' involvement in its $98-billion pension system."

California Public Pension Systems Target 'Spiking,' Double-Dipping
Excerpt: "A plan by the Assembly's ranking member on pension and retirement issues would bar boosting a favored worker's pay solely in order to inflate retirement benefits - an action known as 'bumping' or 'spiking' -- and place local public pension systems under tighter state control. It would apply to all public pension systems in the state, including the California Public Employees' Retirement System, the State Teachers Retirement System and the pension systems in 20 counties that were setup by a 1937 public retirement law."
(Capitol Weekly)

Battles Over Retirement Assets Increasingly the Most Contentious -- and Error-Filled -- Part of Divorce
Excerpt: "[A qualified domestic relations order, or a] QDRO, as it's called, helps divide a couple's retirement assets in the wake of a divorce. Such an order, for instance, would permit the custodian of a 401(k) to make payments to the former spouse of an employee. As straightforward as that might sound, a QDRO is about much more than dividing dollars. A retirement plan will need a court order to carry out your wishes, and those wishes had better be spelled out in painstaking detail. What's more, retirement accounts are frequently the largest asset in a divorce proceeding. Given the precarious health of such accounts in the wake of the recession, every penny becomes critical."
(The Wall Street Journal)

Senate Bill Stirs Retirement Plan Lobby: Trade Groups Want to Avert Addition of Third Regulator to Mix of Overseers
Excerpt: "As the Senate convenes this week to debate its version of a financial services reform bill, financial advisers and service providers working with retirement plans are trying to avert the possibility of coming under greater regulation by an existing or new government agency."
(Investment News; free registration required)

Joint Response to The Washington Post Reporting on Pew Study (PDF)
1 page. Excerpt: "[The National Association of State Retirement Administrators, the National Conference on Public Employee Retirement Systems, and the National Council on Teacher Retirement] submitted [this] Letter to the Editor of The Washington Post in response to their mis-reporting on The Pew Center on the States' report on public sector pensions and retiree health care."
(National Conference on Public Employee Retirement Systems)

American Society of Pension Professionals & Actuaries' Letter Suggestions for Improvements to EPCRS
9 pages. Excerpt: "On February 18, 2010, ASPPA filed comments with the IRS suggesting ways in which the Employee Plans Compliance Resolution System ('EPCRS') could be improved. The letter was in response to a request for comments found in Revenue Procedure 2008-50."
(American Society of Pension Professionals & Actuaries)

Retirement Readiness Calculations: A Sensitive Subject
Excerpt: "My recent blog about the National Retirement Readiness Index designed by retirement consulting firm Fiduciary Benchmarks prompted a response from readers. A few cried foul at the example cited of the 45-year-old with $50,000 saved whose nest egg eventually grew to $670,000 by age 67."

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!

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
Employee Benefits Update, February 2010 (PDF)
The nine-page newsletter presents select compliance deadlines and reminders; retirement plan developments; and, health and welfare plan developments, with comments from Reinhart.
(Reinhart Boerner Van Deuren s.c.)

[Guidance Overview]
Who is Entitled to Life Insurance Benefits and Top-Hat Benefits from an ERISA Plan Following Divorce or Marital Separation?
Excerpt: "ERISA plans generally need not follow state-court orders. On the other hand, ERISA plans must follow the designation terms of those DROs that are qualified domestic relations orders ('QDROs'). Questions have been raised about whether life insurance plans and top-hat plans (which are pension plans maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees) must follow the designation terms of a DRO that 'satisfies the QDRO requirements,' but contradicts a designation made pursuant to the plan terms."
(Social Science Research Network)

Flextime May Hold Surprising Benefits for Employee Health, a Study Finds
Excerpt: "Workers who had more control over their schedules and work days saw improvements in both physical and mental health, according to a review published in The Cochrane Library."
(ABC News)

Annual Statistical Supplement to the Social Security Bulletin, 2009
Excerpt: "The Supplement is a major resource for data on our nation's social insurance and welfare programs. The majority of the statistical tables present information about programs administered by the Social Security Administration -- the Old-Age, Survivors, and Disability Insurance program, known collectively as Social Security, and the Supplemental Security Income program. In addition, data are presented on the major health care programs -- Medicare and Medicaid -- and social insurance programs, including workers' compensation, unemployment insurance, temporary disability insurance, Black Lung benefits, and veterans' benefits."
(U.S. Social Security Administration)

Bipartisan Commission To Tackle Social Security and Medicare Reform Issues
Excerpt: "In the wake of the failure by Congress to agree to a binding commission to restore fiscal stability by recommending changes to Social Security, Medicare, and Medicaid, President Barack Obama has established by executive order the National Commission on Fiscal Responsibility and Reform."
(Wolters Kluwer)

Webcasts and Conferences

All You Need to Know About Form 1099-R - Archived Web Seminar
Nationwide on February 22, 2010
presented by SunGard Relius

Form 5500 Reporting Update
Nationwide on March 26, 2010
presented by Lorman Education Services

Health Savings Accounts
Nationwide on March 31, 2010
presented by Lorman Education Services

Press Releases

Employee Benefits Security Administration Announces Outreach and Compliance Assistance for 403(b) Plans
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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