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Retirement Plans Newsletter

April 1, 2010

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National Employee Benefits Day acknowledges employee benefits professionals for the quality benefits you provide and for the important role you have in your colleagues’ well being.
This year Benefits Day has a special focus on Workplace Wellness. We encourage you to evaluate your wellness offerings and to reach out to your employees with suggestions on living a healthier lifestyle.

Visit for free resources to help you celebrate!

[Guidance Overview]
FBAR: Further Relief for Employee Benefit Plans and Certain Foreign Commingled Funds (PDF)
1 page. Excerpt: "In Notice 2010-23, the IRS delayed until June 30, 2011, FBAR filings which would otherwise be due on June 30, 2010 for U.S. persons with signatory authority over, but no financial interest in, a foreign financial account. This should keep those fiduciaries who have no financial interest, even if they have signatory authority, from having to file."
(Seyfarth Shaw LLP)

[Guidance Overview]
Supreme Court Rules on Advisory Fees in Jones v. Harris (PDF)
4 pages. Excerpt: "As a result of the Supreme Court's decision in Jones, the industry can continue to rely on its use of the Gartenberg standard. The Supreme Court's statements regarding the process and substance of review of advisory fees should serve as useful guidance for boardmembers and advisers to ensure that mutual fund boards are being presented with and reviewing all relevant information in connection with the approval of advisory fees."
(Drinker Biddle & Reath LLP)

[Guidance Overview]
Supreme Court Plays Solomon with 401k Fiduciaries on Mutual Fund Fees
Excerpt: "[I]n a unanimous opinion, the Supreme Court offered a mixed ruling on the Jones v. Harris mutual fund fee case. . . . On one hand, it reversed the dismissal of the case by the Seventh Circuit Court. On the other, it ruled the Seventh Circuit Court of Appeals must use the Gartenberg standard."
(Fidiuciary News)

Turn $10,000 Into $15,440 Instantly Using the Company Retirement Plan
Excerpt: "[Here is an] example to see how utilizing retirement accounts can do more for an investor than improve his post-employment prospects. How much could a hypothetical investor with a tax rate of 28% save by contributing 10 grand to a traditional retirement account?"
(The Motley Fool)

Three Ways to Think About Defined Benefit Finance
Excerpt: "In this article we examine defined benefit plan finance by three different perspectives: (1) a 'cash' view, generally defined by the funding requirements under ERISA; (2) an 'earnings' view, generally defined by accounting treatment; and (3) a 'real world' view."
(J.P. Morgan Compensation and Benefit Strategies)

Thoughts on Morningstar's Target Date Fund Research
Excerpt: "Two weeks ago Morningstar published its 2010 Target Date Fund Survey. In the survey Morningstar compared the performance of 'open' and 'closed' fund series and drew the conclusion that neither had a distinct performance advantage. This conclusion is not particularly surprising given relatively few funds have long enough return histories to do a complete analysis. However, what was surprising was what Morningstar omitted from the report, and in particular three major differences between 'open' and 'closed' funds that we think paint a very clear picture of why the differences between open and closed funds are significant."
(BrightScope Inc.)

Explaining New Jersey's New Public Pension Reforms
Excerpt: "The pension system was created to provide for career public employees, and now we are returning it to that core mission. The only change any current employee will feel is the requirement that he or she contribute at least 1.5 percent of his or her salary toward the cost of health benefits -- at the start of his or her next contract. This is something most state employees already do. All other reforms being implemented -- changing the pension calculation, limiting sick-leave payouts, removing part-time workers from the system -- are prospective and will only affect newly hired employees."

Extenders Bill Would Allow for Rollover of Plan Distributions to Roth 401(k) Accounts
Excerpt: "The American Workers, State and Business Relief Bill of 2010 (H.R. 4213), which would extend through 2010 nearly $30 billion in expired tax provisions . . ., would also allow participants in 401(k) plans to roll over distributions to a Roth account maintained under the plan."
(Wolters Kluwer)

American Benefits Council/ICI Letter and Submission to DOL on Target Date Funds (PDF)
5 pages. The submission attached to the letter is titled: Items for Defined Contribution Plan Fiduciaries to Consider When Selecting and Monitoring Target Date Funds.
(American Benefits Council)

American Benefits Council Letter to PBGC Regarding Variable Rate Premium Issues (PDF)
4 pages. Excerpt: "For 2009, it was very advantageous for plans to use the Alternative Method. This was the case because for plan years beginning in 2009, the Internal Revenue Service permitted plans to use, for minimum funding purposes, the 'full yield curve' for any 'applicable month'. This enabled calendar year plans to use the very high interest rates in effect for October of 2008 in determining their funding target for 2009. Under the Alternative Method, the same high interest rates would be used for determining a plan's Premium Funding Target. This would substantially reduce the plan's Premium Funding Target, thus eliminating or materially reducing any liability for variable-rate premiums."
(American Benefits Council)

Harris, Hecker, Excessive Fees and Marketplace Discipline
Excerpt: "Yesterday, the Supreme Court effectively rejected the idea that mutual fund fees, in the non-ERISA context, are not actionable if consistent with the market as a whole, in response to a Seventh Circuit decision finding that a fund did not pay excessive fees to its investment advisor in light of marketplace discipline . . . . Shrewd observers of ERISA excessive fee case law, or even most casual ones, will likely quickly note that, in the ERISA context, the Seventh Circuit essentially applied the exact same thesis to an ERISA excessive fee claim in its highly influential decision in Hecker, finding, in part, that fees were not excessive if consistent with the market as a whole."
(Stephen Rosenberg of The McCormack Firm, LLC)

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 in March, 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]
Recent FICA Case: Possible Refund Opportunity and Deadline
Excerpt: "A recent federal court case may result in a change in payroll tax laws. But to take advantage of the change (if it occurs), employers need to act before April 15, 2010. The new case was issued by the U.S. District Court (Western District of Michigan, Southern Division) in the Quality Stores, Inc. case. The case deals with FICA taxes as applied to so-called 'supplemental unemployment compensation benefits' or 'SUBs' payable under a plan. In general, they are paid to an employee due to the employee's involuntary separation from employment as a result of a reduction in workforce, the discontinuance of a plant or operation, or other similar conditions encountered by the employer."
(Holland & Hart LLP)

[Guidance Overview]
Employer Payroll Changes for HIRE Act Relief (PDF)
2 pages. Excerpt: "The HIRE Act also provides for an increased general business credit of $1,000 for each qualified individual for the first year the following provisions are satisfied: (1) was employed by the employer on any date during the taxable year, (2) employed by the taxpayer for a period of not less than 52 consecutive weeks, and (3) whose wages for such employment during the last 26 weeks of such period equaled at least 80% of such wages for the first 26 weeks of such period. This credit is not eligible for carryback before 2010. Again, the payroll processor will need to track qualified individuals and their wages."
(Groom Law Group)

Notes on the Report 'Work-Life Balance and the Economics of Workplace Flexibility'
Excerpt: "In 1968, a quarter of all American children lived in households in which all parents were working full time. Four decades later, the report notes, that portion had doubled to nearly one-half of all children."
(The New York Times; free registration required)

Work-Life Balance and the Economics of Workplace Flexibility (PDF)
35 pages. Excerpt: "This report presents an economic perspective on flexible workplace policies and practices. The first section reports some of the changes in the U.S. workforce that have increased the need for flexibility in the workplace. . . . The second section examines the current state of flexible work arrangements and reports that many employers have adapted to the changing realities of American workers. . . . The report concludes with a discussion of the economic benefits of workplace flexibility arrangements."
(Executive Office of the President, Council of Economic Advisers)

Employers Looking for Ways to Help Relocated Employees with Complicated Arrangements for Elder Care
Excerpt: "Consider, first, that the overall workforce is aging: There were 27 million working adults ages 55 and over in January 2010, compared to 18 million in January 2000, according to the Bureau of Labor Statistics. Given that increase, the number of people taking care of an elder parent or in-law in the United States is 34 million, according to the most updated statistics from AARP, an advocacy group for older Americans."
(Human Resource Executive Online)

Tax Expenditures and Employee Benefits: Estimates from the FY 2011 Budget (PDF)
Pages 7-8 of 12 pages. Excerpt: "For the next fiscal year (2011), all employee benefits-related tax expenditures ($380.83 billion) will account for 36.0 percent of the $1.06 trillion tax expenditures in the budget. Tax-favored employment-based health insurance benefits will account for the largest tax expenditure presented in the budget ($176.96 billion, or 16.7 percent of the total amount and 46.5 percent of all employee benefits-related tax expenditures), followed by employment-based retirement plans ($111.69 billion, or 10.6 percent of the total amount and 29.3 percent of all employee benefit related tax expenditures) . . . ."
(Employee Benefit Research Institute)

Employee Ownership Update for March 31, 2010
NCEO Executive Director Corey Rosen discusses the following: The NCEO has released new estimates on the number of ESOPs and ESOP participants. H.R. 4213 ties equity compensation to pension funding. A new study shows S corporation ESOP companies performed far better than the rest of the economy in 2008. A new blog provides information on Senator Sanders' bills to promote ESOPs. A 2009 article highlighted the growth of an employee ownership-friendly conservatism in Britain.
(National Center for Employee Ownership)

Webcasts and Conferences

2010 Fall Forum
in Illinois on September 13, 2010
presented by Ascensus

2010 Fall Forum
in Maryland on October 25, 2010
presented by Ascensus

2010 Fall Forum
in Nevada on November 8, 2010
presented by Ascensus

Health Care Reform - What Does It Mean for Plan Sponsors? Webinar
Nationwide on April 14, 2010
presented by Trucker Huss

Press Releases

Public Employers Strive for Healthy Workforce and Healthy Bottom Line
International Foundation of Employee Benefit Plans

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Newly Posted Employee Benefits Jobs

Pension Plan Administrator (FT or PT)
for Howard Simon & Associates
in IL

DB/DC Administrator with IT skills
for Pension Admin firm in Southern California

401(k) / Defined Contribution Plan Administrator
for R.J.L. Pension Services, Inc.
in FL

Account Manager
for Northwestern Benefit Corporation of Georgia
in GA

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