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Retirement Plans Newsletter

May 13, 2010

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GOP and Democrats Clash Over Modifying 401(k) Plans
Excerpt: "The Obama administration is looking for ways to make 401(k) and other defined-contribution plans more like those rapidly disappearing defined-benefit plans, which guarantee retirees a pension for life. One idea under consideration is to encourage or require employers to offer annuities or other 'lifetime-income products' as an option in their 401(k) plans. Some folks, intentionally or not, are confusing this idea with a more radical concept to create guaranteed retirement accounts, which would give the government a far greater role in retirement savings."
(San Francisco Chronicle)

IRS Asking 401(k) Plan Sponsors to Answer Questionnaire
Excerpt: "The IRS announced last week that it will be looking at 1,200 401(k) plans by way of a plan compliance questionnaire. Letters from the IRS are expected to go out at the end of May. . . . Answering the questionnaire is 'technically voluntary,' but an IRS spokesperson made it clear that they want the information."
(Fisher & Phillips LLP)

Louisiana Government Retirement Overhaul Proposals Aim to Save Money
Excerpt: "In its original form, the bill would expand from three years to five years the period at the end of employment used to measure average compensation for figuring retirement benefits, which would likely be lower under that method. The bill also makes various changes to accrual rates, survivor benefits and eligibility."
(New Orleans Times-Picayune)

Why Don't People Annuitize? The Role of Advice Provided by Retirement Planning Software
Excerpt: "This study investigates whether users of 25 free retirement planning programs available on the internet are advised to annuitize, in situations where it clearly would be advisable to do so. Our main conclusion is that the programs generally do not advise it, which contributes to other reasons why people do not annuitize."
(Pension Research Council; registration required to download working papers)

Results of the 2009 Survey of the Funded Status of Multiemployer Defined Benefit Plans (PDF)
30 pages. Excerpt: "'The survey covered areas such as the assets, liabilities, participants, investments, and contributions to these plans both before and after the 2008 market crash. The purpose of this survey was to assess the impact of the market contraction and gather information that would be helpful to members of the multiemployer community, lawmakers, federal regulators, and the public . . . ."
(National Coordinating Committee for Multiemployer Plans)

The Shrinking Tax Preference for Pension Savings: An Analysis of Income Tax Changes, 1985-2007
Excerpt: "We examine the change over time in the value of pension investing, accounting for changes in the tax schedule and in the treatment of equity and bond income. We find that changes in U.S. tax law, especially the treatment of equity income, have led to sizeable changes in the value of the pension tax preference."
(Center for Retirement Research at Boston College)

Vanguard Responds to Request for Information on the Topic of Retirement Income (PDF)
23 pages. Excerpt: "Broad definition of retirement income. We are pleased to see the Departments use the term 'lifetime payments' to describe their policy objective as opposed to the more limited term 'annuity payments.' This is a critical distinction in that retirement income strategies appropriately include nonguaranteed or portfolio-based strategies, as well as annuity-based programs."
(The Vanguard Group, Inc.)

Vanguard Officers Comment on Proposed Participant Investment Advice Rule (PDF)
6 pages. Excerpt: "The comments are intended to help the DOL craft final rules that allow for flexibility in the offering of responsible, fundamentally sound, and cost-effective participant investment advice programs."
(The Vanguard Group, Inc.)

More Plan Sponsors Offering 401(k) Plan Participants the Option of a Self-Directed Brokerage Window
Excerpt: "This trend is alarming to those who believe that self-directed brokerage windows represent a fiduciary quagmire and see it as the antithesis of investment prudence, running counter to the emerging view of many investment experts that participants should be removed entirely from the investment process."
(Workforce Management; free registration required)

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 July 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

New Federal Rules Target MEWA's
Excerpt: "[Health] reform legislation contains several provisions directed at Multiple Employer Welfare Arrangements ('MEWA's'). A new criminal enforcement section contains broad language prohibiting false statements. [One section] prohibits false statements about a MEWA as to: the MEWA's financial condition or solvency, the benefits provided, or the regulatory status of the MEWA under state or federal law, including specifically the exemption of the MEWA from state regulatory authorities."
(Roy Harmon via Health Plan Law)

Webcasts and Conferences

"Fundamentals of 401(k) and Other Qualified Plans" - Atlanta
in Georgia on June 16, 2010
presented by SunGard Relius

"Fundamentals of 401(k) and Other Qualified Plans" - Irvine
in California on June 16, 2010
presented by SunGard Relius

"The New 5500-EZ: At last!" Web Seminar
Nationwide on June 8, 2010
presented by SunGard Relius

Advisory Council on Employee Welfare and Pension Benefit Plans Meeting
in District of Columbia on June 29, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

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Defined Contribution Operations Manager
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in PA

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