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Retirement Plans Newsletter

March 8, 2010

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Valued by every practitioner and recommended for every ERPA candidate, The ERISA Outline Book, 2010 Edition by Sal L. Tripodi, JD, LLM offers six volumes of vital information on everything you need to know. Highlights include new guidances on waiver of 2009 required minimum distribution, automatic enrollment, discontinuing safe harbor nonelective contributions, EFAST2 electronic filing system, court cases on scrivener's errors and over 100 new rulings, guidances and regulations affecting retirement plans.

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[Official Guidance]
Text of DOL Advisory Opinion 2010-01A
Excerpt: "This is in response to your request on behalf of the Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF) (together 'TIAA-CREF') for an advisory opinion concerning the reporting of the TIAA 'Traditional Annuity' on the Form 5500 Annual Return/Report of Employee Benefit Plan. You ask whether the TIAA 'Traditional Annuity' is a fully allocated contract for annual reporting purposes within the meaning of 29 C.F.R. § 2520.104-44(b)(2) and the Form 5500 Instructions. The answer determines whether the Traditional Annuity accumulations must be reported as plan assets on the Form 5500 and applicable schedules and attachments."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
Update on Regulation of Target Date Funds (PDF)
Excerpt: "Many expect additional regulatory initiatives regarding target date funds from Washington this year. Here we analyze the various initiatives being considered."
(J.P. Morgan)

[Guidance Overview]
Court Dismisses Claims against Amgen in Stock Drop Case
Excerpt: "[An opinion from the U.S. District Court for the Central District of California] has found no evidence that Amgen, Inc. breached its fiduciary duties by continuing to offer company stock in its retirement plans."

[Guidance Overview]
Roth Conversions -- Some Simple Advice Despite the Complexity
Excerpt: "This Client Alert will attempt to provide some basic advice regarding whether or not to convert, while briefly mentioning some of the many caveats for those who wish to have a more complete understanding of the rules."
(Miller Johnson)

[Guidance Overview]
A Non-Bankrup.tcy Solution for Resolving Unaffordable Pension Liabilities
Excerpt: "During these financially difficult times, many employers are finding that the skyrocketing costs of funding their pension plans are threatening their viability and ultimate survival. A little-known provision in ERISA, often referred to as the 'Business Continuation Test,' could provide an employer with a non-bankrup.tcy solution to enable it to continue its business unsaddled by those pension obligations."
(Keightley & Ashner LLP)

[Guidance Overview]
Weighing the Merits of Converting to a Roth IRA
Excerpt: "Financial advisers say you need to consider several factors before converting to a Roth, including: * What will your tax bracket be when you retire? * How will you pay the conversion tax? * Do you plan to leave money for your heirs? . . . . [Here are] some 'myths' surrounding Roth conversions . . . ."
(Dallas Morning News)

[Guidance Overview]
Certain Rules for Roth IRA Rollovers
Excerpt: "This is the fifth in a series of Technical Updates, covering Roth IRA issues, including 2010 law changes, plan to Roth IRA rollovers, Roth IRA conversions, recharacterizations and reconversions, and taxation issues associated with Roth IRA transactions. This Part 5 discusses questions relating to rolling over Roth plan and IRA account balances."
(SunGard Relius)

State Government Pension Plan Funding Lowest in 20 Years, Wilshire Claims
Excerpt: "The average funding ratio of state defined benefit plans has fallen to its lowest level in two decades, according to a new report by Wilshire Consulting."
(Pensions & Investments)

FDIC Prodding Pension Funds to Invest In Failed Banks
Excerpt: "U.S. regulators are encouraging public pension funds that control more than $2 trillion to inject capital directly into the banking system by buying failed lenders, Bloomberg said, citing people briefed on the matter. The Federal Deposit Insurance Corp (FDIC) is trying to attract pension funds that want to buy stakes or assets of distressed bank holding companies, Bloomberg said."
(Reuters via New York Times; free registration required)

Small Business Pension Plans Could Have Explosive Growth In 2010
Excerpt: "With the Bush tax cuts set to expire Dec. 31, 2010, income taxes will increase to nearly 40% for individuals and professional corporations. . . . As high-income small business owners meet with their tax advisors, they are looking for tax-saving strategies, and exploring pensions, 401(k)'s, and profit sharing plans."

Baucus Has DB Funding Relief Bill, But It Might Require More Employer Contributions
Excerpt: "Some employers would have to make additional contributions to their defined benefit pension plans to qualify for funding relief under a provision in a huge Senate tax and unemployment bill. Lobbyists say the restrictions in the bill would make the relief -- through longer amortization periods for investment losses -- useless to employers . . . ."
(Business Insurance)

New Jersey Governor Wants Part-Time State Employees Out of Pension System
Excerpt: "[Various bills] -- which have passed the state Senate despite strong opposition by labor unions -- include a provision to bar future part-timers from the pension system, as well as to reduce pension payments and cap sick leave payouts for all future workers."

Retirement Planning: Beyond The Downturn
Excerpt: "After sustaining huge losses, Americans are trying to put their retirement investing back on track. What can you do to rebuild your nest egg?"
(National Public Radio)

Proposed Investment Advice Rules Could Hurt Brokers, Help Registered Investment Advisors
Excerpt: "This article is about the potential for a big-time setback for securities brokers from a regulatory development in Washington. For years wirehouses have maneuvered past various SEC threats to getting paid for providing advice that didn't meet strict fiduciary standards. Now it appears that a new less foreseen threat -- new DOL regulations -- could shrink the potential assets that brokers employed by big firms advise on. This article elucidates how independent advisors -- and in a separate development index funds -- may be well-positioned to capitalize on this potential upheaval."

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Executive Compensation; Benefits in General

The IRS 2010 Guidance Plan: A Look at What's Coming
Excerpt: "Each year the IRS issues a list of its top-priority guidance initiatives for the year, called the guidance plan. The long-awaited list of items was issued in late 2009, and sets forth the plan for issuing much-needed guidance for the July 2009-June 2010 year. . . . A look at a number of provisions from the guidance plan that remain to be addressed, based on the type of plan, will give us an idea of what is in store for the coming year."
(Groom Law Group)

ESPP and Other Broad-Based Equity Plan List
Through a painstaking process of checking company Web sites and corporate filings, the NCEO has compiled a list of the largest 1500 U.S. companies, as well as corporate NASPP members, that have broad-based equity plans. Of the 1,821 companies that we researched, we could confirm that 131 offer options to most or all employees, 22 offer other kinds of broad-based equity (of these, six offer options as well), and 498 have employee stock purchase plans (ESPPs). (National Center for Employee Ownership

Webcasts and Conferences

"401(k) Plan Workshop: Current Issues and New Developments" - Denver
in Colorado on April 9, 2010
presented by SunGard Relius

"401(k) Plan Workshop: Current Issues and New Developments" - St. Louis
in Missouri on April 9, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop - Nashville
in Tennessee on April 7, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Denver
in Colorado on April 8, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - Spokane
in Washington on April 6, 2010
presented by SunGard Relius

"Form 5500/EFAST2 Workshop" - St. Louis
in Missouri on April 8, 2010
presented by SunGard Relius

2010 Web/Telephone Seminar: Advanced HSAs
Nationwide on April 27, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Basic IRAs
Nationwide on April 8, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Conducting Your Own Compliance Audit
Nationwide on June 22, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Coverdell Education Savings Accounts
Nationwide on April 6, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Handling IRA Legal Issues
Nationwide on May 13, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Introduction to QRPs
Nationwide on May 18, 2010
presented by Ascensus

2010 Web/Telephone Seminar: IRA Beneficiary Distributions
Nationwide on June 10, 2010
presented by Ascensus

2010 Web/Telephone Seminar: IRA Excess Contributions
Nationwide on April 20, 2010
presented by Ascensus

2010 Web/Telephone Seminar: IRA Reporting
Nationwide on April 22, 2010
presented by Ascensus

2010 Web/Telephone Seminar: QRP Beneficiary Rollovers to Inherited IRAs
Nationwide on June 17, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Roth IRA Distributions
Nationwide on May 11, 2010
presented by Ascensus

2010 Web/Telephone Seminar: The Roth 401(k)/403(b) Provision
Nationwide on June 15, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Traditional IRA Distributions
Nationwide on May 4, 2010
presented by Ascensus

2010 Web/Telephone Seminars: Introduction to 401(k)s
Nationwide on May 20, 2010
presented by Ascensus

Vendor Selection -- Balancing the Needs of the Sponsor, Participants and Vendors Webcast
Nationwide on March 18, 2010
presented by International Foundation of Employee Benefit Plans

Press Releases

US Department of Laborís ERISA Advisory Council Announces First Meeting of 2010
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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