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Retirement Plans Newsletter

June 9, 2010

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[Official Guidance]
Text of Technical Update 10-1: Multiemployer Plans - Clarification of Schedule R (Form 5500) Instructions and Partial Reporting Relief for 2009
Excerpt: "This Technical Update clarifies the Line 14 Instructions for the Schedule R (Form 5500) and provides partial reporting relief for completing Line 14 for the 2009 plan year."
(Pension Benefit Guaranty Corporation)

[Official Guidance]
Disaster Relief Announcement 10-10 Relating to PBGC Deadlines in Response to Severe Storms, Tornadoes and Straight-Line Winds in Oklahoma
Excerpt: "[PBGC] is waiving certain penalties and extending certain deadlines in response to the severe storms, tornadoes and straight-line winds that occurred beginning May 10, 2010, in Oklahoma."
(Pension Benefit Guaranty Corporation)

[Official Guidance]
Disaster Relief Announcement 10-11 Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Connecticut
Excerpt: "[PBGC] is waiving certain penalties and extending certain deadlines in response to the severe storms and flooding that occurred on March 12, 2010, in Connecticut."
(Pension Benefit Guaranty Corporation)

[Official Guidance]
Text of IRS Notice 2010-47: 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 specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code as in effect for plan years beginning before 2008. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I), and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007."
(U.S. Internal Revenue Service)

[Guidance Overview]
PBGC Unveils Premium Filing Checkbox Relief
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced on Tuesday that it will provide relief to certain premium filers who used the available premium funding target (APFT) to determine the variable-rate premium (VRP), but did not check the appropriate box on the comprehensive premium filing."

[Guidance Overview]
Failure to Mention Benefit Option Explained in SPD no Fiduciary Breach
Excerpt: "The U.S. District Court for the Western District of Wisconsin has found that an employer did not breach its fiduciary duties by failing to inform a former employee and his wife about all of their benefit options."

Advisory Committee Publishes Recommendations on IRS Determination Letter Program (PDF)
405 pages. Excerpt: "[Recommendations include:] Employee Plans: Analysis and Recommendations Regarding the IRS's Determination Letter Program; Exempt Organizations: Getting It Right - An Online Guide to Setting Executive Compensation for Charities."
(U.S. Internal Revenue Service, Advisory Committee on Tax Exempt and Government Entities)

Prevalence of Retirement Plans by Type in the Fortune 100, 1985-2010
Excerpt: "Since 1998, there has been a gradual -- yet dramatic -- shift in retirement offerings to new employees. At the end of 1998, 90% of Fortune 100 companies offered some sort of pension benefit, whether a traditional or hybrid plan. This year, only 42% of Fortune 100 companies offer such plans to their new hires . . . ."
(Towers Watson)

Keeping Defaulted Investment Participants from Defaulting on Retirement Savings Goals
Excerpt: "In its recently released white paper 'Ready! Fire! Aim? 2009 for Defaulted Participants,' J.P. Morgan Asset Management researchers sought to determine any notable differences between the observations for the general participant population and for participants who were defaulted into a target date strategy through a plan's QDIA."
(Employee Benefit News; free registration required)

9 Free Online DOL Resources for 401(k) Plan Sponsors
Excerpt: "The DOL has put together several free on-line 'booklets' and 'fact sheets' to assist and inform 401k plan sponsors and fiduciaries. Here's the sticking point every fiduciary must know. Since the DOL specifically warns their booklets are not intended to provide legal, tax or investment advice, these generic summaries do not replace the need to hire appropriate consultants."
(Fiduciary News)

What to Do When Your Pension Is Frozen
Excerpt: "First, contact the pension specialist in HR to find out exactly how much you're entitled to at retirement, says Falmouth, Mass., financial planner David McPherson. 'Make sure you understand the rules,' he says. Get details on any new or improved 401(k) match too. Next, use the program at to reassess your retirement picture, weighing projected income and savings against expenses. If there's a shortfall, you'll need to save more to cover it."

Long 401(k) Investment Menus Prove Hard to Digest
Excerpt: "In theory, it would seem employees are better off having a wide range of fund offerings in a plan. Funds focused on alternative assets such as commodities, real estate, Treasury inflation-protected securities and emerging-markets stocks can potentially balance risk and add value to a diversified portfolio inside a retirement plan."
(The Wall Street Journal)

Two Classes of ERISA Named Fiduciaries
Excerpt: "The statutory scheme of ERISA invests a group of named fiduciaries with the responsibility for implementing and carrying out the administrative and investment duties of running a qualified retirement plan such as a 401(k) plan."

Administration Advances Plan to Federalize Private Pension System, According to 'Carolina Journal'
Excerpt: "In February, the U.S. Treasury and Labor departments jointly announced they were seeking public comment on proposed design changes to employer-sponsored 401(k) plans and individual retirement accounts that would centralize the private pension system under structures created and administered by the government."
(John Locke Foundation)

Pension Rights Center Letter to U.S. Senate Supporting Provisions in H.R. 4213 on Disclosure of 401(k) Fees (PDF)
2 pages. Excerpt: "This information will give participants the tools they need to choose among investment options and enable them to plan realistically for retirement."
(Pension Rights Center)

ASPPA Comments on Notice 2009-68: Safe Harbor Explanation; Eligible Rollover Distributions
Excerpt: "ASPPA recommends that the guidance and model notices be revised to: Clarify that a single notice may be used for plans that offer both Roth and non-Roth accounts. Clarify that pre-tax amounts in a partial or split rollover can be rolled first to a traditional IRA or qualified plan in accordance with Internal Revenue Code (the 'Code') Section 402(c)(2) . . . ."
(American Society of Pension Professionals & Actuaries)

Maintaining your professional skills and knowledge in the dynamic retirement plan industry requires year-round continuing education. The National Institute of Pension Administrators (NIPA) provides various avenues for staying up-to-date on the latest industry information and for earning continuing education credits! Choose from NIPA’s series of certification programs – distributions, loans, IRAs and the fundamentals of qualified plans – and enroll today. Upon successful completion, you can earn up to 15 CE credits from NIPA and ERPA. For more information, visit

Executive Compensation; Benefits in General

House-Passed Bill Includes Fee Disclosure for Defined Contribution Plans, but No Extension of COBRA Premium Subsidy
Excerpt: "On May 28 the House passed H.R. 4213 by a narrow margin after various items were stripped from the bill, including an extension of the COBRA premium subsidy. Now headed to the Senate for approval, the bill includes pension funding relief for single-employer plans and new 'fee disclosure requirements' for defined contribution plans, which are highlighted [in the target document]."
(Deloitte via

New ESOP Fundamentals Course
The NCEO has created a completely new ESOP Fundamentals course to replace its old one. The course is self-paced and has both online and offline components. It is designed for ESOP committees and other ESOP participants as well as for staff at service providers who need a basic primer on the subject. A free online demo is provided.
(National Center for Employee Ownership)

Milliman's Monthly Benefit News and Developments, June 2010 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits and upcoming key dates.

Compensation Clawback Provisions As a Best Practice in Corporate Governance for Executive Compensation
Excerpt: "A company needs to be able to offer a level of certainty in compensation in order to recruit and retain executives. That is why companies usually strive for 'market' provisions. Interestingly, although institutional shareholders react positively to companies adoption of a clawback policy, they do not seem to make a distinction among the more severe and comprehensive policies and the less specific ones (at least so far). Institutional shareholders and the media have been giving companies 'good governance credit' for adopting almost any form of clawback."
(Michael Melbinger via Winston & Strawn LLP)

Webcasts and Conferences

401(k) Rekon Advisor Symposium
in North Carolina on June 29, 2010
presented by 401(k) Rekon

401(k) Rekon Advisor Symposium
in Illinois on July 22, 2010
presented by 401(k) Rekon

401(k) Rekon Advisor Symposium
in Ohio on August 10, 2010
presented by 401(k) Rekon

401(k) Rekon Advisor Symposium
in California on August 24, 2010
presented by 401(k) Rekon

401(k) Rekon Advisor Symposium
in New Jersey on August 26, 2010
presented by 401(k) Rekon

The Nuts and Bolts of Cash Balance - 401(k) Combined Plan Testing
in New York on June 30, 2010
presented by ASPA Benefits Council of New York

Press Releases

PBGC to Offer Relief to Certain Premium Filers
Pension Benefit Guaranty Corporation (PBGC)

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