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Retirement Plans Newsletter

March 15, 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.

Pre-order your copy today! Visit to order now!

Sponsored by ASPPA

[Guidance Overview]
DOL's Reproposed Regulations on PPA's Statutory Investment Advice (PDF)
5 pages. Excerpt: "If these regulations are finalized, a fiduciary adviser would get relief from the prohibited transaction rules of ERISA section 406 and the parallel provisions of section 4975 of the Internal Revenue Code (Code) for investment-related transactions described in ERISA section 408(b)(14) . . ., provided the investment advice is given under an Eligible Investment Advice Arrangement (EIAA) described in ERISA section 408(g)."
(Transamerica Center for Retirement Studies)

[Guidance Overview]
Proposed Guidance on 401(k) Plan and IRA Investment Advice
Excerpt: "While the 2010 Proposed Regulations are clearly more restrictive than the regulations that they replace, it is by no means clear that they will satisfy individuals in Congress who have sought specific legislation regulating such investment advice."
(McGuireWoods LLP)

[Guidance Overview]
The DOL's Recently Re-Proposed Regulations on Investment Advice in Qualified Plans
Excerpt: "In this article we provide background on the related issues, and then discuss the differences between the new proposal and the original issued under the Bush administration."
(J.P. Morgan Compensation and Benefit Strategies)

[Guidance Overview]
2010 Proposed Regulations for Investment Advisors (PDF)
4 pages. Excerpt: "The effective date of the 2010 Proposed Regulations is 60 days after the publication of the final regulations. The DOL is accepting written comments on the 2010 Proposed Regulations until May 5, 2010."
(Dechert LLP)

[Guidance Overview]
PPA Requires Funding Improvement or Rehabilitation Plan
Excerpt: "The final regulations set forth the administrative procedures for assessing and contesting the penalties under ERISA § 502(c)(8). The final rules generally explain how the maximum penalty amounts are computed, identify the circumstances under which a penalty may be assessed, set out the procedural rules for service by the Labor Department and filing by a plan sponsor, and provide sponsors with the procedures for contesting an assessment by requesting an administrative hearing."
(Wolters Kluwer)

[Guidance Overview]
Attorney's Fee Award Valid, Despite Its Disproportionate Size Relative to Benefit Amount Recovered
Excerpt: "An attorney's fee award of $45,000 to an ERISA claimant was valid, even though the defined contribution plan benefits recovered as a result of the litigation amounted to approximately $650, the U.S. Court of Appeals in Philadelphia (CA-3) has ruled in Tomasko v. Ira H. Weinstock, P.C."
(Wolters Kluwer)

[Guidance Overview]
Ford Didn't Interfere with Pension Benefits by Classifying Visteon Employees as Rehires
Excerpt: "A federal appeals court has ruled that Ford Motor Company did not interfere with the retirement plan benefits of employees reacquired from two previously spun-off production facilities by classifying them as rehired rather than reinstated. The 6th U.S. Circuit Court of Appeals said the employees failed to establish an expectation of future pension benefits."

The Universal Small Employer Retirement Savings Program (PDF)
15 pages. Excerpt: "The SPARK Institute developed [this] concept to create a simplified and standardized savings plan for small employers that have been unwilling to adopt one of the current employer-sponsored plans that are available. The Program will help solve the retirement plan coverage gap for tens of millions of American workers who currently don't have access to employer-sponsored plans. Additionally, the Program is intended to address small employers' concerns (e.g., potential liability and costs) through a plan that service providers can offer and maintain cost effectively."
(The SPARK Institute)

Employers to Begin Receiving 401(k) Compliance Questionnaires from IRS (PDF)
1 page. Excerpt: "Beginning this month, we believe the IRS will launch a new compliance initiative focusing on 401(k) plans. The IRS is expected to select several thousand employers at random to receive detailed questionnaires. The questionnaires are intended to help the IRS assess (1) compliance with the statutory and regulatory rules governing 401(k) plans, (2) potential failures to follow a plan's written terms, (3) whether payroll systems and other internal controls are appropriate, and (4) other topics related to the operation of 401(k) plans."
(Seyfarth Shaw LLP)

2010 Pension Legislative Outlook as of March 12, 2010
Excerpt: "In our latest pension legislative outlook we look at defined benefit funding relief efforts, including provisions passed March 10 as part of the American Workers, State, and Business Relief Act of 2010. We also provide an update on Congressman Doggett's nondiscrimination legislation."
(J.P. Morgan Compensation and Benefit Strategies)

Court Moves Forward Claims against Northern Trust over ESOP
Excerpt: "A federal court judge has moved forward claims by a participant in the Northern Trust Company Thrift Incentive Plan that plan fiduciaries breached their duties by continuing to offer company stock as an investment when it was no longer prudent to do so."

Colorado Increases Opportunity for Plans to Use Auto Enrollment
Excerpt: "Colorado has enacted legislation to allow wage deductions for automatic enrollment in an employee retirement plan. The law is significant as it allows for the automatic wage deduction regardless of whether the retirement plan is subject to the Employee Retirement Income Security Act, as amended by the Pension Protection Act."

Podcast with Jack VanDerhei, Research Director, Employee Benefit Research Institute
Excerpt: "Jack VanDerhei discusses the Employee Benefit Research Institute's 2010 Retirement Confidence Survey."

GAO Offers Opportunity to Plan Sponsors to Provide Input for Congressional Study on Restrictions on Withdrawals from 401(k) Plans
Excerpt: "As a 401(k) plan sponsor, you will have the opportunity to provide GAO with information about whether your plan participants were restricted from withdrawing from their plan accounts and whether any of the investment options offered in your plan restricted withdrawals. GAO is interested in finding out (1) the extent of the problem, (2) which types of investments are involved, and (3) what disclosures plan sponsors and participants received about the possibility of such withdrawal restrictions."

AARP Response to 'Adjusting to Reality' by Alicia H. Munnell and Andrew G. Biggs (Op-Ed, March 8)
Excerpt: "The article demonstrates the inadequacy of using textbook economics to discuss the actual experiences of real people. By arguing -- despite the biggest economic downturn since the Great Depression -- that 'retirees did all right over the last few years,' the authors demonstrate a lack of understanding of the negative impact of decimated retirement savings on older Americans."
(The New York Times; free registration required)

In New York State, Pension Fund 'Investment Decisions Were Made in Part According to Political Benefit for the Comptroller . . . .'
Excerpt: "So far, there have been six guilty pleas in Attorney General Andrew Cuomo's investigation of the real and potential abuses surrounding New York's $129 billion public pension investments. The most important and revealing of these came Wednesday, when David Loglisci, the former chief investment officer of the pension fund, admitted flatly that he had violated state securities law."
(The New York Times; free registration required)

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Executive Compensation; Benefits in General

Review the Coverage of Your Top-Hat Plan -- Before Someone Else Does
Excerpt: "Employers that make contributions to their non-qualified deferred compensation plans typically impose a vesting schedule that is at least as strict as the schedule in their qualified retirement plans. Many employers apply a stricter schedule, including the threat of forfeiture for 'bad boy' terminations or competition. Courts will uphold the vesting schedule and forfeiture provisions of an employer's non-qualified deferred compensation plan, but only as long as that plan is exempt from ERISA as a 'top-hat' plan."
(Michael Melbinger via Winston & Strawn LLP)

How to Sort Out Your Fringe Benefits Before the IRS Does
Excerpt: "In this month's column, we begin to identify various fringe benefits the IRS has included for its three-year audit initiative. As with other audit initiatives, the precise focus of the audits will evolve and some of the targeted issues will increase or decrease in importance. Given the timing of the audits and the importance the IRS places on voluntary compliance, as well as the availability of various relief provisions applicable to fringe benefits and payroll taxes, employers should identify the fringe benefits that they offer as potential targets, beginning with the obvious -- those that arise from a specific statutory exemption."
(Thompson Publishing Group Inc.)

Think Tank Proposal for Mandatory Workplace Flexibility, Limits on Overtime, Paid Family Leave
Excerpt: "[T]he Center for American Progress issued a comprehensive set of recommendations that address 'the needs of today's workers and families as they really are, not as we imagine them to be,' including broadening Social Security to include paid FMLA. On the premise that women now make up half of all workers, with mothers being the 'primary breadwinners' in four in ten families, the report makes a number of recommendations . . . ."
(HR Policy Association)

Webcasts and Conferences

An Update on National Health Care Reform: What's Happening in Washington, DC
in Maryland on April 1, 2010
presented by Worldwide Employee Benefits Network (WEB) - Baltimore Chapter

Employee Benefits Conference
in Illinois on May 17, 2010
presented by Illinois CPA Society

PENSCO Symposium Series for Professionals: Alternative Investments & Self-Directed Retirement Accounts
in Massachusetts on June 10, 2010
presented by PENSCO Trust Company

Press Releases

U.S. Department of Labor Sues Former Tampa, Fla., Pharmacy and Officials to Restore Losses to 401(k) Plan
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

U.S. Department of Labor Sues Trustee of Abandoned IXP Inc. 401(k) Plan in Fruita, Colorado
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Dallas-Fort Worth Business Group on Health Elects New Board Members
Dallas-Fort Worth Business Group on Health

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