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Retirement Plans Newsletter

March 25, 2010

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[Guidance Overview]
Appellate Court Upholds Plan Amendment Invalidation
Excerpt: "A federal appellate court has upheld a ruling throwing out a trust plan amendment changing the definition of surviving spouse for the purposes of benefits determination."

[Guidance Overview]
ERISA 401(k) Plan Proprietary Fund Claims Dismissed in Part (PDF)
2 pages. Excerpt: "On March 16, 2010, the United States District Court for the Southern District of New York granted, in part, a motion to dismiss a putative class action alleging that a 401(k) plan sponsor and related fiduciaries engaged in prohibited transactions and violated fiduciary duties by having the ERISA-governed plan invest in affiliated mutual funds and by selecting an affiliated service provider to provide management services for the plan. . . . Leber v. Citigroup, Inc., No 1:07-cv-09329 (SHS) (S.D.N.Y.)."

Morningstar Launches Online Investment Document Library
Excerpt: "Morningstar, Inc. has launched the Morningstar Document Library, an online repository of documents covering investment products. The Library includes documents from open-end, closed-end, money market, and exchange-traded funds, as well as unit investment trusts, variable annuity subaccounts, and stocks. Morningstar said brokerage firms and retirement plan providers can link to the library or integrate it into their adviser and investor platforms, software, tools, and Web sites to deliver documents to clients that meet pre- and post-sale regulatory requirements."

Stock Drop Procedural Appeal Allowed by Court
Excerpt: "A federal judge in Tennessee has allowed First Horizon National Corp. to ask a federal appellate court to resolve a still murky procedural issue in stock drop cases. U. S. District Judge S. Thomas Anderson of the U.S. District Court for the Western District of Tennessee cleared the way for First Horizon lawyers to ask the 6th U.S. Circuit Court of Appeals to decide whether courts can now expand the 'presumption of prudence' standard already common when cases are decided on their merits to earlier when rulings are being rendered on the initial court filings."

DOL Adds EFAST2 Information to Web Site
Excerpt: "The U.S. Department of Labor (DOL) has updated its frequently-asked-questions site dealing with EFAST2, the DOL electronic filing system for Form 5500 and related documents. . . . The FAQs are at"

Unions Want Washington's Help with Pension Funds
Excerpt: "Nonunion workers and private companies could be forced into absorbing the financial liabilities of underfunded union pension plans, thanks to pending health care mandates and an executive order that could be finalized this year, policy analysts and trade group representatives have concluded."
(The Washington Times)

Public Pension Plan Reform: The Legal Framework
Excerpt: "There is significant interest in reforming retirement plans for public school employees, particularly in light of current market conditions. This paper presents an overview of the various types of state regulation of public pension plans that affect possibilities for reform. Nearly all of the various approaches to public pension plan protection taken by the states have significant flaws."
(Social Science Research Network)

401(k) Fee Litigation March 2010
Excerpt: "To learn more about these cases, please see the [materials attached to the target page]."
(Groom Law Group)

Fewer Defined Benefit Plans, More 401(k) Plans, But Only a Net Gain of 34 New Plans in Fiscal 2009
Excerpt: "The Internal Revenue Service issued 17,847 determination letters to qualified retirement plans during the fiscal year ending Sept. 30, 2009, according to statistics in the IRS's Data Book, 2009. There was a net gain of 34 new retirement plans during the year (3,329 initial qualification letters versus 3,295 plan terminations). The IRS reported that 11,223 plans received approval letters for plan amendments."
(Wolters Kluwer)

Senate Passes Tax Extenders Bill with Pension Funding, 401(k) Plan Provisions
Excerpt: "On March 10, 2010, the Senate passed the American Workers, State and Business Relief bill (H.R. 4213) by a vote of 62 to 36. While the focus of the legislation is the extension, generally through 2010, of several dozen tax provisions that had expired at the end of 2009, the bill includes pension funding relief and provisions that allow distributable 401(k) account balances to be converted to Roth accounts within the 401(k) plan."
(Wolters Kluwer)

Exchange Traded Funds Slowly But Surely Replacing Mutual Funds in 401(k)s, According to ETF Trends Article
Excerpt: "The exchange traded fund (ETF) industry has long lusted after the prospect of being a standard component of 401(k) plans. While it's making some serious headway, one provider in particular is leading the charge and having an impact. BlackRock has been pushing hard to get Americans to ditch mutual funds in 401(k) plans in favor of ETFs, and it looks like it's having some effect."
(Global Trends Investments)

Trillion-Dollar Pension Funding Crisis Looms Large Over America
Excerpt: "California's $20 billion financial crisis -- just the latest in a series, like a Hollywood horror movie with endless sequels -- makes it Exhibit A of the pension funding predicaments looming over many state and local governments in the U.S. . . . In the Golden State, meanwhile, the California Public Employees' Retirement System, or CalPERS, had sharply increased benefits for state retirees in 1999. 'CalPERS's investment returns provide this historic opportunity,' then-board president William Crist declared, 'without causing any additional taxpayer burden.' Since then the state's public employee pension outlays have ballooned by 2,000 percent, while state revenues have increased only 24 percent."
(Institutional Investor)

Florida Woman Fired for Blowing Whistle on ERISA Plan Violations at Country Club
Excerpt: "Naples, FL: A former controller for a south Florida golf club was recently fired and jailed after alleging violations of the company's ERISA plan in her annual financial report."
(Online Legal Media)

Social Security to See Payout Exceed Pay-In This Year
Excerpt: "This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office."
(The New York Times; free registration required)

The American Society of Pension Professionals & Actuaries (ASPPA) and the College for Financial Planning (the College) have joined forces to offer advanced qualified retirement plan education to financial professionals. Beginning April 19, the College will offer instructor-led courses online that lead to ASPPA’s Qualified Plan Financial Consultant (QPFC) credential. Students will be able to sit for the QPFC exams and upon successful completion, apply for the QPFC credential with ASPPA!

"If you're a financial advisor engaged in the increasingly complex world of qualified plans, this partnership represents a significant opportunity to advance your career." ~Sheldon H. Smith, Esq, APM, President, ASPPA

For more information and to register, visit

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
Some Severance Held Exempt from FICA Again: Consider Filing Protective Refund Claims (PDF)
1 page. Excerpt: "A Federal District Court in Michigan, in a case involving the bankrup.tcy of the Quality Stores discount chain, has held that some types of severance pay are exempt from social security taxation under the Federal Insurance Contributions Act (FICA), and that the employer was entitled to a refund of FICA tax that it had previously paid on the severance. While the decision is certain to be appealed by the IRS, employers who have made significant severance payments in open tax years (generally 2006 or later) may want to consider filing protective claims for refund of FICA payments until the matter is resolved."
(Seyfarth Shaw LLP)

Online Federal Employee Benefits Calculators
Listed are calculators for federal retirement plans, social security, the Thrift Savings Plan, Federal Employees' Group Life Insurance, and other benefits.
(The Washington Post; free registration required)

Federal Employee Telework and Benefits Bills Move Forward in Congress
Excerpt: "A House subcommittee on Wednesday approved legislation to promote telework in federal agencies, increase oversight of prescription drug coverage in the Federal Employees Health Benefits Program and allow federal employees to invest the value of their unused annual leave in their retirement accounts. The House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service and District of Columbia unanimously approved the 2009 Telework Improvements Act (H.R. 1722), introduced by Rep. John Sarbanes, D-Md. The bill would codify a government wide telework policy that Office of Personnel Management Director John Berry announced in April 2009."

Webcasts and Conferences

ACOPA Actuarial Symposium
in Nevada on August 13, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ACOPA Advanced Actuarial Conference
in Illinois on June 10, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

An Employer’s Guide to Health Care Reform - Webinar
Nationwide on April 7, 2010
presented by Seyfarth Shaw LLP

Benefits Conference of the South
in Georgia on May 13, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Controlled Groups
Nationwide on April 7, 2010
presented by McKay Hochman Co.

Did You Notice: DC Plan Communications Webcast
Nationwide on May 27, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ERPA Conference
in Illinois on June 17, 2010
presented by AIRE, LLC (American Institute of Retirement Education)

Ethics for the Retirement Plan Professional
Nationwide on April 21, 2010
presented by McKay Hochman Co.

Ethics for the Retirement Plan Professional
Nationwide on April 22, 2010
presented by McKay Hochman Co.

General Overview of ASPPA’s Education & Examination Program – Free Informational Webcast
Nationwide on April 27, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Great Lakes Benefits Conference
in Illinois on June 16, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Health Care Reform Update: Navigating the Changes for Employers
in Wisconsin on March 31, 2010
presented by Michael Best & Friedrich LLP

Health Care Reform: A First Look for Employer-Sponsored Health Plans
Nationwide on April 8, 2010
presented by EBIA / Thomson Reuters

Health Plan Contracting Web Summit - 2010
Nationwide on April 22, 2010
presented by MCOL

Managing the Cost and Complexity of US Health Reform Webcast
Nationwide on March 25, 2010
presented by Mercer

Mid-Atlantic Benefits Conference
in Pennsylvania on May 24, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

NTSAA 403(b) Compliance Resolution Summit
in Illinois on May 10, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

PFC-1: Plan Financial Consulting 1 - Live Online Course
Nationwide on April 19, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Roth IRA Conversion Rules and How They Impact Your Practice
in New York on April 20, 2010

Western Benefits Conference
in California on July 18, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Women Business Leaders Forum
in Texas on June 2, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Working with Multiple Employer Plans Webcast
Nationwide on March 31, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Press Releases

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in TN

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