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Retirement Plans Newsletter

March 10, 2010

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[Guidance Overview]
April 30 EGTRRA Restatement Deadline Approaching for Defined Contribution Plan Documents (PDF)
3 pages. Excerpt: "Plan sponsors are reminded that April 30, 2010 is the deadline for adopting preapproved master and prototype (M&P) and volume submitter (VS) defined contribution plan documents that have been updated to comply with the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and other changes in plan qualification requirements. Additionally, plan sponsors that desire to file their M&P and VS defined contribution plans for determination letters from the IRS must submit the request to the IRS on or before April 30, 2010."
(Morgan, Lewis & Bockius LLP)

[Guidance Overview]
DOL Advisory Opinion on Whether Assets Held in TIAA-CREF 'Traditional Annuity' Are Plan Assets
Excerpt: "After examining the Traditional Annuity, the ERISA regulations and Form 5500 Instructions, the Advisory Opinion concluded that the Traditional Annuity is not a fully allocated contract within the meaning of 29 C.F.R. § 2520.104-44(b)(2). This obtains because upon payment of each contribution or 'premium' to the Traditional Annuity, TIAA-CREF does not unconditionally guarantee to provide a retirement benefit of a certain amount, or a 'specific dollar benefit'."
(Stanley D. Baum of Fellheimer & Eichen LLP)

[Guidance Overview]
Section 403(b) Arrangements Under ERISA
Excerpt: "The Department of Labor has issued Field Assistance Bulletin (FAB) 2010-01 clarifying the extent to which pre-2009 contracts no longer receiving employer contributions under a tax-sheltered annuity Section 403(b) arrangement may be omitted from ERISA plan reporting, and when Section 403(b) arrangements are exempt from ERISA under the Department's 'safe harbor' regulation. The results are some 'do' and 'do not' rules for tax-exempt employers who want to minimize or claim exemption from ERISA reporting."
(Sonnenschein Nath & Rosenthal LLP)

[Guidance Overview]
FBAR Filing Requirements for Governmental Plans
Excerpt: "On Friday, February 26, 2010, Treasury's Financial Crimes Enforcement Center ('FinCEN') released proposed changes to the FBAR regulations that, among other things, appear intended to relieve state and local government retirement and welfare benefit funds (hereinafter, 'governmental plans') and their directors, officers, and employees, from all FBAR reporting requirements. While FinCEN's changes are only proposed, temporary IRS guidance accompanying FinCEN's release provides essentially the same relief immediately, lasting until June 30, 2011."
(Strasburger & Price, LLP)

Companies Could Pay Stiff Price to Qualify for Senate's Pension Funding Rules
Excerpt: "Some employers would have to make additional contributions to their defined benefit plans to qualify for funding relief under a provision in a huge Senate tax and jobs bill. Lobbyists say the restrictions in the bill would make the relief -- through longer amortization periods for investment losses -- useless to employers, and they are working to water them down. The bill, the American Workers, State and Business Relief Act of 2010, is sponsored by Senate Finance Committee Chairman Max Baucus, D-Mont."
(Pensions & Investments)

Summary of Revised Senate Pension Funding Relief Legislation (PDF)
5 pages. Excerpt: "On March 9, the Senate adopted an amendment offered by Senators Johnny Isakson (R-GA) and Ben Cardin (D-MD) to modify the funding relief provisions in the Senate extenders bill (H.R. 4213, now called the American Workers, State and Business Relief Act (AWSBRA)). Senate passage of the bill is expected this week. This document summarizes the funding relief provided under the amendment."
(American Benefits Council)

Providers Vie for TPA Attention
Excerpt: "Particularly in the small-plan market, retirement plan providers are seeing more business come through third-party administrators (TPAs) -- and, as a result, are ramping up their efforts to attract TPAs."

The 2010 Retirement Confidence Survey: Confidence Stabilizing, but Preparations Continue to Erode (PDF)
44 pages. Excerpt: "The 2010 Retirement Confidence Survey -- the 20th annual wave of this survey -- finds that the record-low confidence levels measured during the past two years of economic decline appear to have bottomed out. The percentage of workers very confident about having enough money for a comfortable retirement has stabilized at 16 percent, which is statistically equivalent to the 20-year low of 13 percent measured in 2009 . . . ."
(Employee Benefit Research Institute)

5500 Annual Report Deadlines Approach for Some 2009 Short Plan Year Filings
Excerpt: "Sponsors of ERISA plans with short 2009 plan years should attend to the rapidly approaching deadlines for Form 5500 annual reports. Filings are due by March 31 for plan sponsors relying on a special extension available for plans with short plan years ending on or before May 31, 2009. Filers with short plan years ending after May 31, 2009, are ineligible for the special extension but may request the standard 2 1/2 month automatic extension by timely filing Form 5558."
(Mercer LLC)

Generous Benefits in Detroit, Michigan, Reduce Money Available for Fielding Local Crime Fighters
Excerpt: "Rich retirement perks enjoyed by public workers -- including police and firefighters -- are making it harder to fight crime in Michigan. Corralling the surging costs of those pension and health care programs would make it possible to put more cops on the street. Michigan needs all the help it can get. According to the Council of State Governments, this state had the highest violent crime rate in the Great Lakes region, and the fewest police officers per capita."
(The Detroit News)

Retirement Plan Advisers Are Fiduciaries, or Will Be Soon
Excerpt: "There are still broker/dealers, such as Merrill Lynch, aggressively arguing that their advisers are not fiduciaries but, generally, the independent broker/dealer industry, in the last five years, has been moving in the direction of allowing more representatives to acknowledge that they are fiduciaries, says Amy Glynn, Director of Retirement Consulting Services with Commonwealth Financial Network in Waltham, Massachusetts."

Fact Sheet:: The National Retirement Risk Index and the House
Excerpt: "This fact sheet looks at how not taking full advantage of housing equity affects the share of U.S. households 'at risk.' . . ."
(Center for Retirement Research at Boston College)

New Hampshire City Sues State Over Requirement to Increase Pension Contributions
Excerpt: "The city of Concord, New Hampshire, and two other plaintiffs have filed a lawsuit claiming the state violated the state Constitution by increasing what municipalities and school districts must pay into the pension system for police officers, firefighters, and teachers."

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Executive Compensation; Benefits in General

[Guidance Overview]
The Compensability of Commute Time and Home Computer Activity Continues to Confound
Excerpt: "If there was any doubt that off-the-clock issues are vexing and perplexing, especially for California employers, consider this: A distinguished three-judge panel of the 9th U.S. Circuit Court of Appeals has withdrawn the opinion it issued less than six months ago in the much-discussed Rutti v. Lojack Corporation case and has issued a replacement decision. This advisory updates our September 2009 advisory, 'Commuting in a Company Vehicle, Home E-Mail Activity: Compensable Employee Time?' in which we reported on the 9th Circuit's original Rutti decision."
(Davis Wright Tremaine LLP)

[Guidance Overview]
Section 162(m) Pitfalls (PDF)
6 pages. Excerpt: "We have highlighted . . . several common compliance pitfalls that can be fatal to qualifying for the section 162(m) performance-based compensation exception. Public companies should review their performance-based compensation arrangements in light of these pitfalls to maximize their tax deduction for compensation paid to their top executives."
(Morgan, Lewis & Bockius LLP)

DOL Statistics on ERISA Benefit Plan Enforcement, Including COBRA Subsidy Statistics, for Fiscal Year 2009
Excerpt: "EBIA Comment: Viewed against prior-year statistics, the high number of [Delinquent Filer Voluntary Compliance] Program filings received for FY 2009 -- which has nearly doubled in a few years' time -- is notable. (For more information, see our Checkpoint Newsstand article.) One contributing factor may be the addition of an online penalty calculator and payment option, which has made the DFVC Program easier to use."
(Employee Benefits Institute of America)

Webcasts and Conferences

Health Care Reform Update Seminar
in Illinois on March 18, 2010
presented by International Society of CEBS - Chicago Chapter

New Trend: DC Payments That Behave Like DB Payments
in Illinois on March 17, 2010
presented by WEB - Chicago Downtown

Retirement Plan Compliance Assistance Seminar
in Alaska on May 19, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

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