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Retirement Plans Newsletter

April 27, 2010

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Most 403(b) plans need to comply with new plan document requirements, changes to coverage and non-discrimination testing rules, and limitations to transfers and exchanges. Look to SunGard for 403(b) solutions. For more information, read more about our solutions or call 1-800-326-7235, ext.1100.
Sponsored by SunGard

[Guidance Overview]
Rejecting the Second Circuit's 'One Strike' Rule, the Supreme Court Reaffirms the Importance of Firestone Deference (PDF)
2 pages. Excerpt: "In response to concerns raised by plaintiffs that the Court's ruling would encourage administrators to make unreasonable benefit determinations, the Court stated that '[t]here is no reason to think that deference would be required in the extreme circumstances that respondents foresee.'"
(Winston & Strawn LLP)

[Guidance Overview]
Supreme Court Affirms That Plan Administrators' Interpretations of Plan Document Must Receive Deference
Excerpt: "The Court's broad pronouncement that providing deference to plan administrator interpretation supports ERISA's 'guiding principles,' even after an erroneous interpretation of the same or similar plan terms, should serve to further solidify the correctness of an arbitrary and capricious standard of review where the plan terms grant an administrator the power to interpret a plan's terms."
(McDermott Will & Emery)

[Guidance Overview]
IRS Revised Forms W-2 and W-3 Reflect Changes Under HIRE Act
Excerpt: "The IRS previously released the Form W-11 affidavit on April 7, 2010. Individuals must complete this form to confirm they are qualified employees under the HIRE Act. [The target page includes links to the forms and instructions.]"
(Hewitt Associates)

[Guidance Overview]
IRS Priority List Indicates Increase in International Employee Benefits Compliance Efforts (PDF)
4 pages. Excerpt: "First are issues surrounding Puerto Rico plans and 'dual status' plans. In addition to the US tax treatment of distributions (see, e.g., Rev. Proc. 2004-37) and deductions for contributions, the IRS has been working with the Hacienda in Puerto Rico to train plan auditors . . . . Another area appears to be the valuation of foreign plan investments and disclosures."
(Groom Law Group)

[Guidance Overview]
IRS Provides Interim Rules to Issuers of Variable Annuity Contracts
Excerpt: "The interim guidance provides direction for [(1) determining whether an insurance company satisfies the '50 percent of reserves' test for qualification as a life insurance company]; (2) applying the statutory reserve cap . . .; and (3) determining the amount of the reserve with respect to a contract falling within the scope of AG 43 and issued on or after December 31, 2009."
(Wolters Kluwer)

Public Pension Argument Pits 'Haves' against 'Have Nots'
Excerpt: "The difference in financial security between those with public pensions and those without has become glaringly visible during the ongoing recession, so much so that some in the 'have not' camp are wondering why their tax dollars are going toward someone else's pension while their own retirements are insecure."
(Daily Herald)

Social Security and the Federal Budget (PDF)
14 pages. Excerpt: "This primer is intended as a resource for those who worry that the sudden concern about deficits may be a ploy to cut Social Security and other key social insurance programs. Are we really on a collision course with an entitlements iceberg, or is it just a question of fixing our health care system and ensuring that high-income taxpayers pay their share?"
(Economic Policy Institute)

Time to Replace the 4% Rule: Retirement Savings Withdrawal Strategy Flawed, Replacement Complex
Excerpt: "'It is time to replace the 4% rule with approaches better grounded in fundamental economic analysis,' wrote Sharpe in his paper 'The 4% Rule -- At What Price?' (That paper appeared in The Journal of Investment Management in 2009, but resurfaced last week in the financial-adviser community and is sparking debate anew.)"
(MarketWatch, Inc.)

EBSA Unified Agenda Entries from the DOL Spring 2010 Semi-Annual Agenda, Issued April 26, 2010
The target page provides links to three agenda items: Improved Fee Disclosure for Welfare Plans [EBSA Proposed Rule Stage - 1210-AB37]; Claims Procedure Regulation [EBSA Proposed Rule Stage - 1210-AB39]; and, QDIA - Target Date Fund Disclosure [EBSA Proposed Rule Stage - 1210-AB38] with a fact sheet for each.
(U.S. Employee Benefits Security Administration)

How Reminders Increase Saving (PDF)
43 pages. Excerpt: "Our model also generates the unique predictions that reminders will increase saving, and that a reminder that makes a specific expenditure more salient will be especially effective. We find support for these predictions in three field experiments that randomly assign reminders to new savings account holders."
(Center for Retirement Research at Boston College)

[Opinion]
ASPPA Request for Extension for Filing 2009 Form 5500 Series Reports
Excerpt: "ASPPA recommends that the Agencies provide a blanket extension of the filing date for Forms 5500, 5500-SF and Form 5500-EZ for 2009 plan years, and make the filing requirement for Form 8955-SSA optional for 2009 plan years."
(American Society of Pension Professionals & Actuaries)




Valued by every practitioner and recommended for every ERPA candidate, The ERISA Outline Book, 2010 Edition by Sal L. Tripodi, J.D., L.L.M. offers six volumes of vital information on everything you need to know. Highlights include: IRS guidance on the waiver of 2009 required minimum distribution; automatic enrollment guidance from the IRS and Treasury; guidance on discontinuing safe harbor nonelective contributions; EFAST2 electronic filing system and DOL guidance; reporting guidance for 403(b) plans, guidance on deferrals from paid time off plans, court cases on scrivener's errors, and over 100 new rulings, guidances and regulations affecting retirement plans.

Order your copy of The ERISA Outline Book, 2010 Edition today! Visit www.asppa.org/eob now!

Sponsored by ASPPA

Executive Compensation; Benefits in General

State Police and Firefighters Sue Over New Jersey Pension Changes Recently Enacted
Excerpt: "An Associated Press report said the union lawsuit claims the pension changes are unconstitutional and asks for a court order barring the changes from going into effect as scheduled on May 21 . . . ."
(PLANSPONSOR.com)


Webcasts and Conferences

2010 Benefits Boot Camp
in District of Columbia on May 13, 2010
presented by WEB (Worldwide Employee Benefits Network) Washington Chapter


Press Releases

Retirees Raise the ‘Red Flag’
National Retirees Legislative Network (NRLN)


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