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Retirement Plans Newsletter

May 3, 2010

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[Official Guidance]
Text of SEC Proposed Regs. on Asset-Backed Securities, Including Changes to Disclosure Rules (PDF)
188 pages. Excerpt: "We also are proposing to require that, with some exceptions, prospectuses for public offerings of asset-backed securities and ongoing Exchange Act reports contain specified asset-level information about each of the assets in the pool."
(U.S. Securities and Exchange Commission)

[Guidance Overview]
FAQs on Form 5500-EZ for the 2009 Plan Year
Excerpt: "The IRS has yet to issue the Form 5500-EZ and its accompanying instructions. The IRS has informed us that it will issue the form and instructions sometime this summer. . . . The following FAQs address issues relating to the annual reporting requirements for one-participant plans: . . . ."
(SunGard Relius)

[Guidance Overview]
Correcting a 401(k) Plan's Allowance of Excess Deferrals
Brief overview. Revised April 30, 2010.
(McKay Hochman)

[Guidance Overview]
Correcting a Plan's Mistaken Exclusion of an Eligible Employee from a 401(k) Plan
Brief overview. Also describes special rule for safe harbor 401(k) plans.
(McKay Hochman)

[Guidance Overview]
Hewitt's Global Retirement Update (April 2010 Issue) (PDF)
4 pages.

Swaps Could Become Off Limits to Funds to Retirement Plans Under Senate Bill
Excerpt: "Provisions in legislation approved by the Senate Agriculture Committee on April 20 would require swap dealers to take on a fiduciary obligation when entering, or offering to enter, into a swap with a pension plan. The anti-swaps provisions are included in the Senate's financial reform bill being debated in the Senate."
(Pensions & Investments)

Public Pension Funds at Least $975 Billion in the Hole
Excerpt: "state and local pension funds assume annual average returns of 7 to 8.5 percent when calculating how much they will need to pay retirement benefits. Private pension funds use about 6 percent."

Mercer Publishes Interactive 'Retirement Road Trip' for Participants Via Web
Excerpt: "'Retirement Road Trip' is a visually engaging, interactive campaign that takes the user on a five-minute retirement 'road trip' tailored to his or her age group. The participant encounters various obstacles that represent common challenges to saving for retirement, and learns helpful, age-appropriate strategies to move beyond such 'roadblocks.'"

Generation Y Employees Spending Retirement Distributions at Job Change
Excerpt: "Although this generation's heavy credit-card debt and student-loan burden are factors, part of the blame may lie with communication efforts that fail to resonate with these workers."
(Human Resource Executive Online)

Cracking Down on Investment Fees
Fee structures are complex, but by pushing vendors to specify who gets what out of precious plan assets, [Chief Financial Officers] can gain valuable leverage."

The Efficiency of Pension Menus and Individual Portfolio Choice in 401(k) Pensions
Research paper. Excerpt: "We outline implications for plan sponsors and participants seeking to enhance portfolio efficiency: don't just offer or choose more funds, but help people invest smarter."
(University of Michigan Retirement Research Center)

Financial Literacy and Financial Sophistication in the Older Population
Research paper. Excerpt: "For this sample of older respondents over the age of 55 [from the 2008 Heath & Retirement Study], we find that people lack even a rudimentary understanding of stock and bond prices, risk diversification, portfolio choice, and investment fees."
(University of Michigan Retirement Research Center)

Participation and Contributions in Tax-Deferred Retirement Accounts: Evidence from Social Security Records
Research report. Excerpt: "Despite the increased availability of these employer-provided plans throughout this period, participation rates and contribution amounts remained low among respondents in the lower half of the earnings distribution."
(University of Michigan Retirement Research Center)

Committee on Investment of Employee Benefit Assets (CIEBA) Submits Comments to Request for Information on Lifetime Income in Retirement Plans
Excerpt: "The document addresses present constraints that prevent companies from offering a wider-array of options to provide lifetime income for participants, including legal constraints, costs for both the plan and participants, and participant knowledge and behavioral trends."
(Association for Finance Professionals)

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 now!

Sponsored by ASPPA

Executive Compensation; Benefits in General

Army's Generous Pay, Benefits: Are Skyrocketing Costs Sustainable?
Excerpt: "Painful choices lie ahead: cutting the size of the Army, even as it is heavily engaged in combat, or cutting soldiers' pay and benefits, a step that has proved too politically poisonous even to mention aloud."

Employee Ownership Update for May 3, 2010
NCEO Executive Director Corey Rosen discusses: The British Conservative Party called for more employee ownership. The IRS may issue preapproved ESOP plan language. SharesPost will work with brokers to facilitate purchases of stock or options from private company employees. The NCEO is assembling a resource on wellness and health insurance programs. The NCEO annual conference had a record attendance, and Loren Rodgers will be the new executive director. The Smiley Fellowship winner was announced.
(National Center for Employee Ownership)

Public Pension Fund Underfunding Is a Manageable Challenge
Excerpt: "The deep financial downturn of 2008 and 2009, spurred by recklessness on Wall Street, caused significant problems in many pension funds. But our public pension plans are designed for long-term stability, and virtually all of them have sufficient resources to weather this financial storm."
(Gerald W. McEntee in USA TODAY)

Ugly Truth About State Pensions Begins to Emerge
Excerpt: "Many states have lavish programs that allow workers to retire in their 50s with ample pensions -- and health insurance to cover them until Medicare kicks in. Second, regardless of how generous their benefits, some states have simply failed to put away adequate funds to cover them."

In 2010 National Elections, Are Public Sector Employees the Democrats' Achilles Heel?
Excerpt: "The Democrats can't walk away from the public employee unions who negotiated these arrangements because they are beholden to them."

Webcasts and Conferences

Half-Day Form 5500 Seminar
in New York on May 20, 2010
presented by WEB (Worldwide Employee Benefits Network ), New York Chapter

Press Releases

PBGC Assumes Colonial Bank Pension Plan
Pension Benefit Guaranty Corporation (PBGC)

PBGC Statement On Continued Pensions At Lyondell Chemical Co.
Pension Benefit Guaranty Corporation (PBGC)

Union Officer Sentenced For Embezzling Over $300,000 In Union Funds
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Tegrit Merges with Summit Retirement Plan Services, Inc.
Summit Retirement Plan Services, Inc.

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for PlanTech, LLP
in AL

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in IL

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for Alliance Pension Consultants
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for Mercer Advisors, Inc
in AZ, CA

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