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Retirement Plans Newsletter

March 16, 2010

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DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA’06 Pension Funding.
* Funding Target and Target Normal Cost with 3-rate segments
* 404(o) Cushion; 430 minimum and 404(o) maximum contributions
* Funding Target Attainment Percentages (FTAPs)
Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. or call 1-888-328-2474

[Guidance Overview]
Preparing for a 403(b) Audit: Some Key Facts You'll Need to Prove to Your Auditor
Excerpt: "This ErisaALERT is the third in a series covering issues facing 403(b) plan sponsors. Our first in the series discussed the rules regarding who is subject to an audit as well as tools available to help you select an auditor. Our second ALERT addressed what to expect from your auditor during the audit process and this issue addresses gathering the data the auditor will need."
(ERISA diagnostics, Inc.)

Senate Passes Bill to Expand Roth Access to 401(k) Plan Distributions
Excerpt: "Last week the U.S. Senate approved a bill that would permit 401(k) plan participants to convert pre-tax contributions to a Roth account within their 401(k) plan . . . . However, the language in the bill limits such conversions to 'distributable events' - that is, only applicable to monies that would be eligible for a distribution. Moreover, the bill would seem to suggest that the participant must first request a distribution, receive it, and then redeposit it to the 401(k) in Roth status."

IRS Retirement Plans Determination Letter Program Forum: March 31, 2010, via Phone
Excerpt: "Andrew Zuckerman, Director of Employee Plans Rulings and Agreements, will be joined by Vickie Surguy, Manager, EP Determinations, to discuss the status of the new determination letter program, the types of 'reliance' available to preapproved plans, with or without a determination letter, tips on completing the new Form 5307, along with ways to avoid common mistakes to make the process go more smoothly."
(U.S. Internal Revenue Service)

Target-Date Series Research Paper: 2010 Industry Survey (PDF)
45 pages. Excerpt: "Investors may have turned a deaf ear to criticism of target-date funds, but the industry that runs them certainly hasn't. Morningstar found that in the past year several target-date providers have cut shareholder fees and made their series' asset allocations more conservative. Cutting shareholder fees is a direct benefit to investors, but going more conservative could leave the industry open to charges that it's fighting the last market battle and not positioning the funds for the future."

Report on Financial Condition of the Illinois State Retirement Systems as of June 30, 2009 (PDF)
126 pages. Excerpt: "This report examines the financial status of the five State-funded retirement systems."
(State of Illinois)

The Funding Status of State-Sponsored Pension Plans
Excerpt: "State pension plans are underfunded by $3.2 trillion when misguided accounting practices are corrected according to research by Joshua D. Rauh, an associate professor of finance at the Kellogg School of Management, and Robert Novy-Marx at the University of Chicago, published in the Journal of Economic Perspectives. Furthermore, because pension funds are highly exposed to market risks, there is only a 5 percent chance that they will perform well enough to meet the needs of retirees in fifteen years."
(Kellogg School of Management, Northwestern University)

Promised Pension Benefits for Public-Sector Employees Represent a Threat to Financial Future of Many Cities and States
Excerpt: "Most public employees, if they hang around to retirement, can count on pensions equal to 75% to 90% of their pay in their highest-earning years. And many public employees earn even more in retirement than their best year's base compensation as a result of 'spiking' their last year's income by working ferocious amounts of overtime and rolling in years of unused sick and vacation days into their final-year pay computation."
(Dow Jones & Company, Inc.)

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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Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
IRS's New Section 409A Correction Program
Excerpt: "Notice 2010-6 provides a 'second chance' for employers to bring their deferred compensation arrangements in compliance with the Section 409A requirements. In our experience, some employers have 'discovered' deferred compensation arrangements that were not previously identified as being subject to Section 409A. Further, some Section 409A plans may still include provisions that do not satisfy the applicable requirements or may have not been operated in compliance with Section 409A."
(Miller, Johnson, Snell & Cummiskey, P.L.C.)

Employee Communications: Trends, Fads and What's Next
Excerpt: "Communication plays a critical role in engaging employees. Social media, eco-friendly, Web 2.0, traditional--which strategies and tactics connect most effectively with today's workforce?"
(Employee Benefit Adviser; free registration required)

Trends in the Employee Financial Picture (PDF)
15 pages. Excerpt: "From high deductible medical plans to shrinking pension and retirement plan contribution formulas, employees are increasingly faced with tough decisions about short-term and long-term finances. Many are in jeopardy when it comes to retirement planning yet may not realize it. Budgeting and savings calls are on rise, and for the first time since we began studying employee trends, they were on parity with debt calls."
(Financial Finesse, Inc.)

Options on the Flex-Work Menu
Excerpt: "Work-life experts caution that many flex-work programs appear more generous on paper than in practice and can be highly dependent on individual supervisors."
(National Public Radio)

More Employers Make Room for Work-Life Balance
Excerpt: "First, more and more employers are discovering that loosening the traditionally rigid work schedule pays off. Sleep says her retention rate over 16 years is an astonishing 95 percent. And study after study shows productivity also shoots up. More than half of companies now say they offer flextime, and one-third allow telecommuting at least part-time. On the other hand, research also shows that employees don't find their workplaces nearly as flexible as managers report."
(Morning Edition via National Public Radio)

Webcasts and Conferences

Fiduciary Education Webcast
Nationwide on March 18, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Fiduciary Education Webcast
Nationwide on March 24, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

New Mental Health Parity and Addiction Equity Act Regulations: What You Need to Do to Comply
Nationwide on March 11, 2010
presented by EBIA / Thomson Reuters

Retirement Plan Option Webcast
Nationwide on March 25, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Retirement Plans Determination Letter Program Phone Forum (Free)
Nationwide on March 31, 2010
presented by Internal Revenue Service (IRS)

Press Releases

U.S. Labor Department Sues Owner of Delaware-based Stover Industries to Recover Workers’ 401(k) Contributions
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Recipient of 2010 Morningstar—ASPPA 401k Advisor Leadership Award Recognized
American Society of Pension Professionals & Actuaries (ASPPA)

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