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Retirement Plans Newsletter

April 13, 2010

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[Guidance Overview]
Judge Rules Against Minnesota Corrections Department Early Retirement Incentive Plan
Excerpt: "A federal judge has ruled that an early retirement incentive plan at the state Department of Corrections discriminates against older employees. The U.S. Equal Employment Opportunity Commission on Monday announced the ruling in the age discrimination lawsuit that was filed in September 2008. The case centered on an early retirement plan that rewarded corrections employees who retired at age 55 with employer contributions for health and dental insurance until they turned 65. But under the plan, employees who retired after age 55 did not receive the employer contributions."
(Minnesota Public Radio)

Fees Can Take a Big Bite Out of Retirement Fund Contributions, According to Report
Excerpt: "'People need to understand that fees are lethal,' said Mitch Tuchman, chief executive of a self-help portfolio management website called MarketRiders, which conducted the study of fees. 'They are a hidden tax that people have no idea they're paying.' The study focused on the $1.88 trillion in retirement money that's invested in mutual funds. (An additional $2.3 trillion in retirement money is invested in certificates of deposit and insurance products. The study did not attempt to assess the effects of fees on that portion of retirement savings.) Using data published by the fund industry's primary trade group, the Investment Company Institute, Tuchman estimated that fees paid by the average investor amounted to roughly 2% of assets -- or some $2,180 annually."
(Los Angeles Times)

Webinar: Who's a Fiduciary, Who's Not and What's the Difference?
1 hour. Excerpt: "This webinar [explores] the often-misunderstood world of fiduciary status and provide answers to some of the most industry's most probing questions. Who is a fiduciary? Who should be -- and who shouldn't? What's the difference between a 3(21) and a 3(38) fiduciary? When is guidance not fiduciary advice? How does all this apply to your 403(b) plan?"
(StanCorp Financial Group, Inc.)

Officials Discuss Difficulties of Annuitizing 401(k)s
Excerpt: "Public officials . . . turned to employee benefits executives for guidance on how best to incorporate annuity products into retirement plans. J. Mark Iwry, senior adviser to the Treasury Secretary Timothy Geithner, and Michael L. Davis, deputy assistant secretary for the Labor Department's Employee Benefits Security Administration, today spoke at MetLife Inc.'s sixth annual benefits symposium in Washington. During the panel they hosted . . . they discussed some key legislative changes that will effect retirement planning, and asked audience members for input on integrating annuities into defined-contribution plans."
(Investment News; free registration required)

Fuzzy Math and Public Pension Hysteria: Recent Studies About CalPERS' Impending Doom Should Not Be Trusted
Excerpt: "[David] Crane repeatedly asserts the grossly misleading claim that public pension costs have risen 2,000% since 1999. To make this assertion he cherry picks 1999 as a starting point, when the state paid the lowest contribution to its pension fund, the California Public Employees Retirement System (CalPERS), that it had in many years. The $56 million contributed that year resulted from a four-year 'pension holiday' that allowed the state to use CalPERS investment earnings to offset required contributions."
(Los Angeles Times)

ASPPA co-sponsors several regional conferences with the IRS to provide you opportunities to discuss employee benefits issues with colleagues, local, regional and national government representatives from IRS and the US Department of Labor, and private sector experts. The programs focus on exchanging information and educating attendees about current regulatory, legislative, administrative and actuarial topics.

Find out when we’re coming to your town here.

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
State Rules on Post-Termination Forfeitures of Bonuses and Commissions
Excerpt: "In many states, an employer may legally require an employee to forfeit a bonus or commission if the employee is no longer employed on the date the bonus or commission is to be paid. In other states, these types of forfeiture provisions are expressly prohibited. Whether a forfeiture provision is legally permissible will vary based upon many factors, including: (i) the state in which the employee is employed; (ii) whether the compensation being forfeited is a commission (based on sales made) or a bonus (based upon company or individual performance); (iii) how and when the commission or bonus is calculated, earned, and paid; and (iv) when, why, and how the employee's employment terminates."
(Troutman Sanders LLP)

[Guidance Overview]
Past Layoffs Could Provide Tax Refund for Companies
Excerpt: "A recent court ruling suggests that companies may be able to recover FICA taxes linked to severance pay. But to take full advantage of the first refund year, they'll have to file before April 15."

Does Supreme Court's Decision in Jones v. Harris Associates Contain any Lessons for Corporate Boards Setting Compensation?
Excerpt: "At first blush, the recent U.S. Supreme Court decision in Jones v. Harris Associates would not seem to be relevant to directors on corporate boards who are responsible for setting executives' compensation. The decision in Harris Associates is based not on state law fiduciary principles that apply to most corporate boards, but rather on a specific federal statute, §36(b) of the Investment Company Act of 1940, as previously interpreted by the Second Circuit Court of appeals in Gartenberg v. Merrill Lynch Asset Management, Inc., 694 F. 2d 923, 928 (2nd Cir. 1982). However, two other factors suggest to me that we should pay attention to this decision."
(Michael Melbinger via Winston & Strawn LLP)

Webcasts and Conferences

2010 Annual Spring Conference
in Arizona on April 22, 2010
presented by Western Pension & Benefits Conference - Phoenix Chapter

401(k) Plan Basic Operation
in California on May 19, 2010
presented by Actuarial Consultants, Inc.

Annual Plan Administration Basic Training
in California on May 19, 2010
presented by Actuarial Consultants, Inc.

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

Medical Management in Medicare Advantage: Payer/Provider Collaborative Care Summit
in California on August 5, 2010
presented by Opal Events

Press Releases

IRI Releases Retirement Planning Pyramid Tool
Insured Retirement Institute (IRI)

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Newly Posted Employee Benefits Jobs

Retirement Plan Service Specialist
for Retirement Alliance, Inc.
in NH

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for State of Connecticut , Office of the State Comptroller
in CT

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

Employee Benefits Account Manager - Part Time Position Available
for 360 Corporate Benefit Advisors
in MA

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