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Retirement Plans Newsletter

May 20, 2010

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[Guidance Overview]
What Does a 403(b) Plan Sponsor Need to Have in Order to Have a Compliant Program?
Excerpt: "Regardless of the help they get from others, the responsibility for compliance ultimately lies with the plan sponsor. 'As part of the process of bringing the plan into compliance and keeping it in compliance, [sponsors] have to take their role seriously, including in the process of hiring service providers,' . . . ."

[Guidance Overview]
New 5500 E-Signature Option
Excerpt: "The form preparer must register for signing credentials at the DOL EFAST2 registration website."

Equity Risk and Time: A Survey of U.S. Investors (PDF)
Excerpt: "New Vanguard research shows that 3 in 10 believe stock market risk always declines over time, while 6 in 10 take either a measured or skeptical approach to equity risk. The rest are unsure about the impact of risk. Importantly, the research found that these beliefs about risk and time are strongly linked to a household's decision to invest any savings in the equity market and also influence trading behavior and expectations for future returns."
(The Vanguard Group, Inc.)

GASB Has Big Changes in Mind for the Accounting Rules Pension Plans Use
Excerpt: "The Governmental Accounting Standards Board (GASB) is preparing to release officially its Preliminary Views on its controversial pension accounting project in June. A current posting on its website with recent minutes tells us to expect some big changes with huge financial impact, if their current thinking works its way ultimately into the accounting standards."

CalPERS Retreats on Request for More Taxpayer Funding
Excerpt: "Facing political fire, the state's largest public pension fund Wednesday retreated for a month from a plan to approve a $700-million increase in taxpayer contributions it gets from the state and about 1,000 school districts. State Treasurer Bill Lockyer, a member of the California Public Employees' Retirement System board, said the fund needs to assess the consequences of the huge hike on California at a time when the state faces an estimated $19-billion budget deficit."
(Los Angeles Times)

401(k) Plan Balances Surge, According to Study
Excerpt: "The average account balance jumped 41% to $66,900 as of March 31, up from $47,500 at the end of March in 2009, said Fidelity Investments, a Boston-based 401(k) plan administrator and mutual fund provider."
(Business Insurance)

Ways the 401(k) Could Be Improved
Excerpt: "Most retirement savers think their 401(k) could use a few improvements. Employees would like all companies to offer retirement accounts and would appreciate more advice about how to save and invest for retirement, according to a recent ING U.S. Retirement Services and Ipsos Public Affairs telephone survey . . . ."
(U.S. News & World Report)

Social Security Modernization: Options to Address Solvency and Benefit Adequacy (PDF)
99 pages. The report was prepared by committee staff with assistance from the Congressional Research Service, the Government Accountability Office and the Social Security Administration.
(U.S. Senate Special Committee on Aging)

Social Security and the Budget
Excerpt: "In contrast to rising health care and interests costs, Social Security's growing benefits relative to taxes received represent only a modest part of the nation's major fiscal problems. Nonetheless, Social Security serves as the flagship of social welfare policy, and it places increasing demands on the economy as annual benefits grow, life expectancies increase, and the baby boomers retire."
(Urban Institute)

New Rules for Pension Boards are Needed
Excerpt: "A law that imposes strict personal fiduciary liability on board members who continue to stray will help rein in negligent behavior. If their life savings are placed at risk without the protection of indemnification and directors' insurance, they will clean up their act. Vigilance will become the watchword. The laws should also strip negligent trustees of voting rights and ultimately require their removal for fiduciary violations."

ASPPA has partnered with the Institute for Pension Plan Management at Indiana University-Purdue University Fort Wayne (IPFW) to offer convenient webcourses leading to a number of credentials, including your QKA and QPA. Registration includes all 7 sessions for each webcourse. Individual classroom or corporate viewing options are available at incredible prices!

Visit for more information and pricing.

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
IRS Issues Final Rule on Qualified Non-Personal Use Vehicles
Excerpt: "The IRS has added an item to the list of government-owned vehicles public employees may use for personal purposes occasionally without triggering the need to keep records of business vs. personal use. Effective May 19, the IRS will recognize 'clearly marked public safety officer vehicles' as qualified nonpersonal vehicles that enjoy an exemption . . . of the regulations, regardless of whether the employee using them is a fire or police department employee."
(Thompson Hine LLP)

Financial Reform Bill Could Require Companies to Recover 'Excess' Incentive-Based Compensation from Executive Officers in Connection with a Restatement
Excerpt: "The current version of U.S. Senator Christopher Dodd's financial reform bill contains a provision . . . that would require companies that filed a restatement to recover incentive-based compensation from executive officers, even if no one engaged in any misconduct . . . . [T]he U.S. House of Representative's financial reform bill does not contain a similar provision, and thus the final adoption of Section 954 is not ensured."
(McDermott Will & Emery)

Recouping Executive Pay: The Rise in Popularity of Clawbacks
Excerpt: "Clawbacks are being endorsed by shareholders and legislators as significant corporate governance tools to deter management from taking actions that could potentially harm the company's financial position; the objective is to eliminate - or, failing that, at least recapture - undeserved payouts to executives."
(Hay Group)

10 Trends That Are Changing the Shape of Workplace Benefits
Excerpt: "[E]stablishing and maintaining benefit programs that are competitive and distinctive requires an awareness of trends in the marketplace, in the population, in the legislative and regulatory worlds, and in the needs of the workers you hope to attract and retain. While product development and enhancements certainly can play a role, there are also the overarching issues that drive and shape those developments."

Supreme Court Rejects 'One Strike and Out' Rule for Deference to Plan Administrator's Decisions.
Excerpt: "The disposition by the lower courts should have made this an easy decision. Whatever the intricacies of trust law, requiring the plan to ignore the time value of money was without basis. The dissent makes an attempt to defend it, but the case should have been remanded to fashion a more reasonable remedy."
(Steptoe & Johnson LLP)

Webcasts and Conferences

"The Ins and Outs of EFAST2" Web Seminar
Nationwide on June 22, 2010
presented by SunGard Relius

"The Ins and Outs of EFAST2" Web Seminar
Nationwide on June 24, 2010
presented by SunGard Relius

Cash Balance Plans – Administrative Issues
Nationwide on June 16, 2010
presented by National Institute of Pension Administrators

Form 5500 Presentation - 2009 Plan Years
in New York on June 3, 2010
presented by International Society of Certified Employee Benefit Specialists - NY Metro Chapter

Identifying Controlled and Affiliated Service Groups
Nationwide on July 13, 2010
presented by National Institute of Pension Administrators

No One Is Bald On The Radio – What Your Website, Collateral, and Communications Say About You
Nationwide on June 24, 2010
presented by National Institute of Pension Administrators

Strategic and Tactical Action Plan Creation Workshop
Nationwide on June 3, 2010
presented by National Institute of Pension Administrators

Press Releases

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Newly Posted Employee Benefits Jobs

System Manager Retirement Service Center
for Providence Health and Services
in WA

Defined Contribution, Client Service Officer
for AllianceBernstein
in NY

VP, Defined Benefit Product Lead
for Prudential
in CT

VP, Project Management
for Prudential
in CT

Case Coordinator
for Northwestern Benefit Corporation of Georgia
in GA

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