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Retirement Plans Newsletter

May 10, 2010

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Most 403(b) plans have a substantial amount of legislative requirements for plan document preparation, non-discrimination rules testing, and transfers/exchange limitations. 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

[Official Guidance]
EBSA Explains Need for Upcoming Guidance on Target Date Fund Selection
Excerpt: "EBSA plans to enhance retirement security by publishing compliance assistance guidance to plan sponsors regarding the evaluation and selection of target date funds as retirement plan investment options and investment choices for employees, ultimately supporting the Secretary's good jobs for everyone policy."
(U.S. Employee Benefits Security Administration)

[Official Guidance]
Text of IRS Notice 2010-40: Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates (PDF)
4 pages. Excerpt: "This notice provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates . . . the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates . . . . In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities . . . the 30-year Treasury weighted average rate . . . and the minimum present value segment rates . . . ."
(U.S. Internal Revenue Service)

[Guidance Overview]
IASB Proposed Changes to Accounting for Employers' Defined Benefit Plans (PDF)
Excerpt: "If the proposed amendments to IAS 19 were adopted by IASB, there would be basic convergence on recognition on the balance sheet of the net funded status of defined benefit plans and the cost of such plans recognized in the statement of total comprehensive income."
(Buck Consultants)

[Guidance Overview]
The Supreme Court's Decision in Jones v. Harris Associates: Implications for ERISA Fiduciary Standards and 401(k) Plan Fees (PDF)
4 pages. Excerpt: "At this point, the decisions of lower courts on this issue . . . focus on all the issues we have discussed §the ability of participants to choose lower-fee funds, the sponsor's process for reviewing fees and the size of fees relative to those paid by other market participants. Generally, however judicial scrutiny has been somewhat deferential to the sponsor's judgment. That, perhaps, is the most useful takeaway for plan sponsors from the Jones v. Harris Associates decision."
(Aon Consulting)

[Guidance Overview]
Additional FAQs on the HIRE Act from the IRS
Excerpt: "On May 6, 2010, the IRS posted additional frequently asked questions and answers (FAQs) on its webpage. There are three sets of FAQs: FAQs About the Payroll Tax Exemption and Qualified Employers; FAQs About Qualified Employees; FAQs About Claiming the Payroll Exemption."
(McGuireWoods LLP)

[Guidance Overview]
Technical Questions and Answers Regarding The SPARK Institute's 403(b) Plans Information Sharing: Minimum and Comprehensive Data Elements
Excerpt: "We encourage anyone in the 403(b) plans community that has technical questions about the Data Elements to submit them to us . . . . Questions submitted to us will be reviewed by the panel, and answered through this Q&A site to the extent possible."
(The Spark Institute)

Pittsburgh, Pennsylvania, Could See Pension Funding Tax Levy
Excerpt: "Pittsburgh Mayor Luke Ravenstahl is proposing that those working in the Western Pennsylvania city should be forced to pay a 0.3% income tax to generate new revenue for the city's pension fund."

Larger Companies Allowing High 401(k) Plan Contributions
Excerpt: "Sixty-eight percent of mostly larger employers report that their company allows 401(k) participants to contribute 25% or more of their earnings."

Conflict-of-Interest Charges against Former San Diego Pension Officials Dropped
Excerpt: "Prosecutors have dropped conflict-of-interest charges against six former members of the San Diego pension board following a California Supreme Court ruling that dropped criminal charges against five of them."

Secretary of Labor Files Brief in Support of 'Surcharge' for Fiduciary Breaches
Excerpt: "[DOL] filed an amicus curiae brief with the [4th Circuit, contending that it is] 'hard to imagine' that Congress would have left participants and beneficiaries without an effective remedy against fiduciaries who have committed serious violations of ERISA's provisions . . . ."

Pension Finance Watch: Declining Yields Pull Funding Index Down In April (PDF)
4 pages. Excerpt: "A significant decline in long corporate bond yields dominated capital market results in April. The resulting liability increase was partially offset by positive equity returns. The Towers Watson Pension Index fell 2.2% for the month to 71.3 - just below its level of 71.6 at the start of the year."
(Towers Watson)

The U.S. Retirement Market, 2009 (PDF)
40 pages. Excerpt: "Assets earmarked for retirement are a key component of households' balance sheets. At year-end 2009, retirement assets represented 35 percent of all U.S. households' financial assets. DC plan accounts were 9 percent of household financial assets and IRA assets were another 9 percent."
(Investment Company Institute)

Brookings Institution Paper: Effects of the Financial Crisis on the Alternatives for Public Pensions (PDF)
10 pages. Excerpt: "[T]he crisis did not just create a one-time adjustment in values and funding levels. The investment alternatives for plans look different now than they did a few years ago. . . . This paper reviews the various changes affecting public pension plans . . . ."
(The Brookings Institution)

Optimal Time of Annuitization in the Decumulation Phase of a Defined Contribution Pension Scheme
Excerpt: "This paper is currently reserved to Carefin sponsors and will be made public on SSRN after a short embargo. Please visit the CAREFIN website to learn more on how to get the paper."
(Social Science Research Network)

401(k) Plans Must Adapt to New Economic Realities
Excerpt: "[L]et's pretend that you putting in a 401(k) plan for the first time. And if it is the first time, here are some things you can consider."
(Employee Benefit News; free registration required)

Don't Let Overlegislation Undo 30 Years of 401(k) Fruitfulness
Excerpt: "The fact that there is a push to show projected annuity amounts in DC plans makes me question whether those in charge really appreciate the difference between DC and DB plans. Along with this proposal for creating annuity numbers around 401(k) account balances, there is also discussion about creating a fund, not unlike the FDIC and sounding somewhat like the PBGC, that would back up guarantees from insurers who provide annuities in 401(k) plans."
(Employee Benefit News; free registration required)

June 17-18, 2010 Chicago, IL
This is the first conference designed by ERPAS for ERPAS! A one of a kind program developed from topic suggestions by current and potential ERPAs to provide practical solutions to the issues they face, the ERPA Conference offers up to 10.5 ASPPA, ERPA, JBEA and NIPA CPE credits, Ethics CPE credit, access to top speakers from the IRS, and networking with colleagues and fellow ERPAs.

For more details and registration, visit today!

Sponsored by ASPPA

Executive Compensation; Benefits in General

What, If Anything, Do Companies Need to Worry About in Terms of Potential Government Legislation or Regulation of Executive Compensation?
Excerpt: "[N]early all of the bills have a few common provisions that could become law in 2010 or 2011."
(Michael Melbinger via Winston & Strawn LLP)

Webcasts and Conferences

How Employers Can Adapt to Health Care Law Changes Webcast
Nationwide on May 13, 2010
presented by West LegalEdcenter

Leadership for Productivity and Health Management: Issues, Innovations, and Solutions
in Massachusetts on September 30, 2010
presented by Harvard School of Public Health Center for Continuing Professional Education

Press Releases

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Defined Contribution Plan Administrator
for New York Life Retirement Plan Services
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in MI

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Senior Retirement Advisor
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in NC

Retirement Plan Relationship Manager
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Internal Sales Rep - Retirement Plans
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Client Relationship Consultant
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in CA

Client Service Associate
for Third Party Administration Firm
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