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Retirement Plans Newsletter

April 16, 2010

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[Guidance Overview]
Beverly Enterprises Settles 401(k) Plan Excessive Fee Charges
Excerpt: "Beverly Enterprises has agreed to settle for $6.25 million claims that it caused its 401(k) plan to incur excessive fees. According to a report by Fiduciary Counselors, participants sued to recover losses they allegedly suffered as a result of the defendants' breaches of fiduciary duties under the Employee Retirement Income Security Act (ERISA). The participants claimed the plan was systemically neglected for a period dating back to 1996 and that virtually all of the investment options offered to plan participants prior to 2006 underperformed."

Dynamic Investment Policy Statement for Pensions
Excerpt: "Recent changes in accounting and funding rules require faster recognition of changes in the funded status of corporate pension plans. Plan sponsors, however, still typically conduct asset/liability studies only every three to five years, and then tweak the plan's asset allocation. The author of a new Vanguard commentary, 'Pensions -- Dynamic IPS: A plan for action,' explains why risks and rewards change as funded status changes and why it is important for the portfolio adjustment process to keep up with those changes."
(The Vanguard Group, Inc.)

Cash Balance Pension Plans Surge In Popularity: 359% Increase In Six Years
Excerpt: "There were 4,797 cash balance plans active in 2007 (the most recent year for which IRS pension plan data is available), up from 1,337 in 2001. That represents a 359% increase, according to a new national research report from retirement plan consultant Kravitz."
(Wolters Kluwer)

High 401(k) Fees an Obstacle to Preserving Retirement Savings, According to Hewitt Associates
Excerpt: "One main obstacle employees face as they struggle to save is hidden, high 401(k) plan fees, according to an analysis by Hewitt Associates. Even with increased legislative and legal scrutiny of plan fees over the past few years, Hewitt believes that federal action is needed to help plan sponsors and individuals receive better information from investment managers and other service providers on these fees. Such transparency will enable employers to better protect and enhance employees' retirement savings by providing a better climate for negotiating lower fees and offering competitively priced, best in class investments in their 401(k) plans."
(Wolters Kluwer)

IRS Officials Provide Status Updates and Reminders for Plan Determination Letters
Excerpt: "At a March 31, 2010 teleconference, IRS Employee Plans Rulings & Agreements Director Andrew Zuckerman set out several upcoming goals of the IRS determination letter program and Employee Plans Determinations Manager Vickie Surguy reminded practitioners of upcoming deadlines regarding determination letter requests."
(Wolters Kluwer)

Transforming 401(k) Plans Into Defined Benefit Plans
Excerpt: "DOL hopes to figure out ways in which people don't run out of money while they are in retirement, says Karen Friedman, executive vice president and policy director of the Pension Rights Center, a Washington, D.C.-based advocacy group for workers and retirees. Providing lifetime income options is a good idea, considering that 'we are facing a retirement-income crisis in this country where people are not saving enough for retirement and millions of people are not going to have enough retirement income,' Friedman says."
(Employee Benefit Adviser; free registration required)

Illinois Governor Signs Pension Reform
Excerpt: "Democratic Gov. Pat Quinn affixed his signature onto a pension reform package Wednesday, saying the state will save billions of dollars because benefits will be lower for new employees, who will have to work longer to collect their retirement checks. While union leaders complained the new law doesn't address Illinois' $77 billion shortfall in the government employee pension systems, it is expected to save taxpayers money in the coming decades on retirement costs for teachers, lawmakers and many public servants throughout state government, universities, cities, counties and park districts."
(The Chicago Tribune)

Obama Backs Pension Funding Relief with Conditions
Excerpt: "The Obama administration has endorsed legislative efforts to provide additional funding relief to defined benefit plan sponsors but only if the relief is targeted to companies that really need it, according to a letter to key lawmakers from Labor Secretary Hilda Solis."
(Pensions & Investments via Business Insurance)

Why the Trillion-Dollar Teachers' Pension Funding Gap Will Become Taxpayers' Problem
Excerpt: "Unfortunately, an often overlooked aspect of the pension gap story makes matters even worse: Governments use accounting methods that have consistently understated pension funding gaps in both good times and bad. Examined on a more realistic basis, the true gap in teacher pensions is nearly three times the official amount--and the taxpayers who will have to close it are in for three times the pain."
( LLC)

Meet some of the biggest pension and welfare benefit celebrities at the Western Benefits Conference! Get the latest on what's going on in the world of pension and welfare benefits from industry experts and IRS officials live in person! The Western Benefits Conference takes place June 18-20 in Los Angeles, CA and is a joint program by the Western Pension & Benefits Conference (WP&BC) and the American Society of Pension Professionals & Actuaries (ASPPA).

For a program listing and to register, visit today!

Sponsored by WP&BC and ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
Employee Benefits Update, April 2010 (PDF)
The seven-page newsletter presents select compliance deadlines and reminders; retirement plan developments; and, health and welfare plan developments, with comments from Reinhart.
(Reinhart Boerner Van Deuren s.c.)

Webcasts and Conferences

COBRA and COBRA ARRA Compliance Workshop
in California on April 19, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

COBRA and COBRA ARRA Compliance Workshop
in Alaska on May 18, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Leveraging Health: Current Impact of Value Based Design
Nationwide on May 26, 2010
presented by MCOL

The Reality of Health Care Reform: Implications for Stakeholders
Nationwide on May 11, 2010
presented by MCOL

Voluntary Fiduciary Correction Program Workshop
in California on April 19, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

National Pension Tour Begins May 3rd 2010
Executive Benefits Design Group

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