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Retirement Plans Newsletter

February 26, 2010

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DATAIR’s Wintertime sale through March 15.
  • License one DATAIR system and get 20% off.
  • Get a second system for half price.
  • Free financing.
401(k), Pension and Cafeteria software for Administration, Documents, and 5500 systems and more. Contact the Sales Department for more information about the rules and restrictions for the sale at or 1-888-328-2474.

[Official Guidance]
IRS 'SEP Plan Pitfalls' Phone Forum Is Today at 2 p.m. Eastern Time
(Some time after the phone conference, a transcript should be available on the target web page.) Excerpt: "Join Mikio Thomas from Employee Plans Customer Education and Outreach and Avaneesh Bhagat from Employee Plans Voluntary Compliance for this 90-minute presentation where you will learn how to use the IRS SEP Plan Fix-It Guide to identify and correct mistakes the IRS frequently sees in SEP plans. In addition, the IRS will provide tips you can share with your clients on how they can avoid these errors in the future."
(Internal Revenue Service)

[Official Guidance]
Text of Proposed DOL Investment Advice Regulation (PDF)
43 pages. Excerpt: "[T]he proposed regulations contain clarifying language intended to address comment letters, mentioned above, that expressed concerns with the provisions of the final rule that interpret the statutory exemption's fee-leveling requirement. . . . The proposed regulation also provides, in connection with investment advice arrangements that use computer models, that a computer model shall be designed and operated to avoid investment recommendations that inappropriately distinguish among investment options within a single asset class on the basis of a factor that cannot confidently be expected to persist in the future . . . ."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Fact Sheet on DOL's New Proposed Investment Advice Regulation; Revises Previous Administration's Regulations
Excerpt: "The Pension Protection Act of 2006 (PPA) amended [ERISA] to create a new statutory exemption from the prohibited transaction rules to expand the availability of investment advice to participants in 401(k)-type plans and individual retirement accounts (IRAs), subject to safeguards and conditions. The Department of Labor (DOL) is publishing in the Federal Register a proposed rule to implement these PPA provisions and make investment advice more accessible for millions of Americans in 401(k) type plans and individual retirement arrangements (IRAs). . . . A final rule and related class exemption published in January 2009 were withdrawn in November 2010 in response to concerns raised in public comment letters questioning the adequacy of the final class exemption's conditions to mitigate the potential for investment adviser self-dealing."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Text of Final DOL Regs Improving Access to Multiemployer Retirement Plan Information (PDF)
34 pages; scheduled for publication in the Federal Register on March 3. Excerpt: "This document contains a final rule implementing section 101(k) of [ERISA], as amended by the Pension Protection Act of 2006. Section 101(k) requires the administrator of a multiemployer plan to provide copies of certain actuarial and financial documents about the plan to participants, beneficiaries, employee representatives and contributing employers upon request. . . . This final rule is effective on [INSERT DATE THAT IS 30 DAYS FOLLOWING DATE OF PUBLICATION IN THE FEDERAL REGISTER]."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Fact Sheet on Final DOL Regs Improving Access to Multiemployer Retirement Plan Information
Proposed regs were issued September 14, 2007. Excerpt: "The regulation requires the administrator of a multiemployer pension plan, on the written request of any plan participant, beneficiary, employee representative (e.g., union), or any employer that has an obligation to contribute to the plan, to furnish copies of requested financial and actuarial reports of the plan. The documents that are required to be furnished are: * Periodic actuarial reports.* Quarterly, semi-annual, or annual financial reports. *Certain applications filed with the Secretary of the Treasury and related determinations (amortization extensions)."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Text of Final DOL Regs on Civil Penalties under ERISA Section 502(c)(8); Multiemployer Plans Affected (PDF)
9 pages. Excerpt: "Under [ERISA section 502(c)(8)], which was added by the Pension Protection Act of 2006, the Secretary of Labor is granted authority to assess civil penalties not to exceed $1,100 per day against any plan sponsor of a multiemployer plan for certain violations of section 305 of ERISA. The regulation will affect multiemployer plans that are in either endangered or critical status. . . . This final rule is effective on March 29, 2010."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Fact Sheet on Government's Request for Information on Lifetime Income (Annuity) Options for Retirement Plans
Excerpt: "The Department of Labor's Employee Benefits Security Administration, in conjunction with the Department of the Treasury, has published a Request for Information asking for ideas on how to help reduce the chances that workers will run out of funds during their retirement years. . . . This RFI is the starting point for a discussion of whether, or to what extent, the agencies might take some action to address identified problems facing today's retirees. . . . The Agencies do not have any pre-determined outcomes or goals, other than to engage interested persons in an open, broad, and objective dialogue of issues and solutions."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
Hewitt's Global Retirement Update (February 2010)
3 pages.

[Guidance Overview]
DOL Field Assistance Bulletin Provides Additional Guidance on 403(b) ERISA Exemption
Excerpt: "FAB 2010-01, which addresses two issues regarding 403(b) plans: (1) What assets must a 403(b) plan report on Form 5500; and (2) Is a 403(b) plan of a tax-exempt organization subject to ERISA. This Technical Update focuses on the ERISA issue."
(SunGard Relius)

[Guidance Overview]
Another Question is Answered in the 401(k) Plans Q&A Column
A 401(k) plan wants to comply with ERISA Section 404(c). One of the requirements is that prospectuses be delivered to participants. Can the prospectus be delivered electronically or must a paper copy be delivered?

Report of 'Middle Class Task Force' Chaired by Vice President Biden; Retirement Policy Addressed (PDF)
56 pages. Describes Administration budget proposals and DOL regulatory projects affecting the middle class; floats the concept of a Guaranteed Retirement Account that would 'give workers a simple way to invest a portion of their retirement savings in an account that was free of inflation and market risk, and in some versions under discussion, would guarantee a specified real return above the rate of inflation.' Excerpt from the Table of Contents: 'Establishing Automatic IRAs; * Simplifying and Expanding the Saver's Credit; * Updating 401(k) Regulations to Improve Transparency and Reliability; * Administrative Actions to Improve Retirement Security; * Another Option: Safe Investment Choices"
(Middle Class Task Force, Office of the Vice President of the United States)

Are Target-Date Funds the Next Wave of Litigation?
Excerpt: "Participants are sold on diversification and told the easiest way to achieve that goal is simply to select a target-date fund that automatically adjusts their diversification via an 'age appropriate' portfolio. For instance, the fund name often includes the year of retirement (2010, 2015 or 2020). As an Advisor if I were to direct a participant's investments in this fashion I would be giving advice and committing a fiduciary act. Yet somehow target-date funds do the same thing with none of the liability. How long before the trial bar questions this?"
(Attorney Thomas B. Bastin on

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.

Sponsored by ASPPA

Executive Compensation; Benefits in General

IRS Set To Begin Comprehensive Employment Tax Audits
Excerpt: "This month, the IRS will launch a new employment tax National Research Program . . . . [T]he IRS will randomly select 6,000 taxpayers (2,000 taxpayers in 2010 for the 2008 tax year and 2,000 taxpayers each in 2011 and 2012 for the 2009 and 2010 tax years, respectively) and conduct in-depth audits of those taxpayers' employment tax issues . . . . In addition to identifying organizations that fail to file employment tax returns at all, the comprehensive audits will focus on at least four major employment tax issues: * Classification of workers as employees or independent contractors; * Reasonableness of executive compensation; * Tax treatment and reporting of fringe benefits as tax-free or as taxable compensation; and * Tax treatment and reporting of employee reimbursements."
(Ballard Spahr)

What To Expect from the IRS 'NRP' Fringe Benefits Audit Initiative
Excerpt: "[A]s of December 2009, the IRS was targeting a much narrower (but still fairly broad) list of the more generic broad-based employee fringes including the following: * Employer-provided automobiles; * De minimis fringe awards such as gift cards; * Discounted property or services; * Education assistance offered as (1) educational assistance plans, (2) working condition fringes and (3) scholarships; * Meal reimbursements and travel per diem plans . . . ."
(Employer's Guide to Fringe Benefit Rules, published by Thompson)

Summary of Possible Worker Classification Legislation (PDF)
2 pages. Excerpt: "Following closely on the recent IRS announcement of a 3-year worker classification study affecting 6,000 employers, the 2011 Obama Administration Budget includes new legislative proposals to 'increase certainty with respect to worker classification.'"
(Groom Law Group via American Benefits Council)

Fact Sheet from DOL on ERISA Enforcement Results During 2009
Excerpt: "EBSA's Voluntary Fiduciary Correction Program (VFCP) and Delinquent Filer Voluntary Compliance Program (DFVCP) encourage the correction of violations of ERISA by providing significant incentives for fiduciaries and others to self-correct. . . . In FY 2009, EBSA received 1,692 applications for the VFCP. The DFVCP encourages plan administrators to bring their plans into compliance with ERISA's filing requirements. More than 2,200 annual reports were received each month in FY 2009. An online filing and payment option added during FY 2009 has made the program even easier to use."
(U.S. Employee Benefits Security Administration)

Senate Majority Leader Reid Puts Together New Bill for COBRA Subsidy Extension, Pension Relief
Excerpt: "A new bill being put together by Senate Majority Leader Harry Reid (D-Nevada) would extend the COBRA premium subsidy for laid-off workers and provide pension relief for employers. . . . The draft bill contains provisions that would give employers more time to fund their pension plan obligations."

Robert J. Myers, Actuary Who Shaped Social Security Program, Dies at 97
Excerpt: "In 1934, in the depths of the Great Depression, Mr. Myers was unexpectedly offered a six-week stint on the Committee on Economic Security, a Roosevelt administration panel that was drawing up blueprints for America's first comprehensive social insurance programs. The six-week job turned out to be a career that spanned decades and placed Mr. Myers at the center of America's great debates about the government's role in the economy and how to create public safety nets affordably."
(New York Times; free registration required)

Webcasts and Conferences

HIPAA HITECH Update For Group Health Plans
Nationwide on March 25, 2010
presented by ABA Joint Committee on Employee Benefits

Leaves of Absence and Employee Benefits: Legal Rules, Compliance Traps, and Plan Design Considerations
Nationwide on February 25, 2010
presented by EBIA / Thomson Reuters

Webinar Explores Benefits of Nutrition for Employee Health
Nationwide on March 4, 2010
presented by DSM Personalized Nutrition, LLC

Press Releases

Pension Agency Achieves $1.36 Billion in Results for Employee Benefit Plans in Fiscal Year 2009
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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