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Retirement Plans Newsletter

June 15, 2010

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[Guidance Overview]
EFAST2: All Electronic Filing for Form 5500
Excerpt: "Plan sponsors should begin now to prepare to make annual disclosures via EFAST2 by familiarizing themselves with the new system, and by ensuring that all appropriate members of their organizations obtain electronic signature credentials."
(McGuireWoods LLP)

[Guidance Overview]
Court Applies Equitable Estoppel Rules to Pension Cases with Unambiguous Terms
Excerpt: "Equitable estoppel relief can be used to vary ERISA pension plan provisions that are unambiguous, the U.S. Court of Appeals in Cincinnati (CA-6) has ruled in Bloemker v. Laborers' Local 265 Pension Fund."
(Wolters Kluwer)

Lawmakers Urged to Fix Swaps Bill's Adverse Effects on Retirement Plans
Excerpt: "Leaders of House-Senate talks on how to finalize a financial regulatory overhaul bill are being urged to fix provisions that could prevent some defined contribution plans from offering stable-value funds and limit pension plans' ability to use swaps to hedge investment risk."
(Mercer LLC)

Dow Companies Still Offer Old-Fashioned Pension Plans
Excerpt: "Companies are increasingly finding pension plans too expensive, too complicated and too risky when compared with 401(k) plans. Dow-member companies dominate the list of those that offer conventional pensions."
(, Inc.)

EBSA Proposed Amendment to Exemption for In-House Asset Managers
Excerpt: "The [DOL's Employee Benefits Security Administration] has issued a proposed amendment to prohibited transaction exemption (PTE) 96-23 for benefit plan asset transactions conducted by in-house asset managers. The exemption permits various transactions involving employee benefit plans whose assets are managed by in-house asset managers (INHAMs), provided the conditions of the exemption are met."
(International Foundation of Employee Benefit Plans)

IRS Tax Relief to Victims of Severe Storms, Tornadoes, and Straight-Line Winds in Oklahoma
Excerpt: "The IRS has announced tax relief for taxpayers who reside or have a business in the federal disaster area of Carter, Cleveland, McIntosh, Okfuskee, Oklahoma, Pottawatomie and Seminole counties in Oklahoma affected by severe storms, tornadoes, and straight-line winds beginning on May 10, 2010."
(Wolters Kluwer)

Knox County, Tennessee, Pension Plan Participants Suing Over Pension Deposit Schedule
Excerpt: "A Knoxville News Sentinel news report said the suit, which involves current and former county workers, deals with a county practice before 2007 of comingling the mandatory 6% of each paycheck withheld for pension contributions into the county's general fund for up to six weeks. The news report said the county now holds the money for about a week."

New Mexico Lawmaker Calls for Pension Lawyer Fee Limits
Excerpt: "A New Mexico lawmaker has called for limits on how much the state's Educational Retirement Board (ERB) should pay for fees from lawyers representing board members."

The Fight Over 401(k) Advice: Will Anyone Win?
Excerpt: "'The Department of Labor is trying to figure out how advice can be provided without participants being taken advantage of,' Ross A. Bremen, a partner at investment consultant NEPC LLC, Cambridge, Mass., said in an interview. 'In an attempt to solve this dilemma, the department has come up with something that is simplistic and potentially flawed.'"
(Investment News; free registration required)

Pension Funds Pressure Congress Over Swaps
Excerpt: "Congress should revise key provisions in pending financial reform bills to ensure that pension plans are free to continue using swaps to manage risk, said more than 150 pension plan sponsors and organizations in a letter to all lawmakers."
(Pensions & Investments)

SPARK Institute Comment Letter to IRS Re: 401(k) Compliance Check Project (PDF)
4 pages. Excerpt: "Our issues and concerns are summarized . . . under two categories (1) Resources Demands and Timing and (2) Plan Compliance Implications and Consequences."
(The SPARK Institute)

Deficit Hawks Should Listen to the Public on Social Security, and Learn the Facts
Excerpt: "Deficit hawks plotting to cut Social Security to reduce the deficit are seriously misguided. The truth is that Social Security contributes not a single penny to the deficit. Indeed, it is the poster child for fiscal responsibility."
(The Century Foundation)

Three Pressing Regulatory Issues 401k Plan Sponsors Need to Know Right Now
Excerpt: "What are these impending changes and what actions can the typical fiduciary take right now to decrease fiduciary liability?"
(Fiduciary News)

Plan Sponsor Letter to House Financial Services Reform Bill Conferees Regarding Swaps (PDF)
7 pages. Excerpt: "Specifically, we have two concerns. First, the Senate bill's provision requiring a swap dealer to have a fiduciary duty to a retirement plan would effectively require a swap dealer to represent both sides of a swap transaction, which is legally unworkable. Second, the House bill's definition of a 'major swap participant' would subject plans to dealer-type regulation, which would inappropriately harm plans' ability to deliver benefits efficiently."
(American Benefits Council)

Plan Sponsor Letter to Senate Financial Services Reform Bill Conferees Regarding Swaps (PDF)
7 pages. Excerpt: "The undersigned plan sponsors and organizations either maintain or represent tens of thousands of retirement and other employee benefit plans across the country. We are writing today to urge that the financial services reform legislation not inadvertently do great harm to our plans and the tens of millions of participants who participate in them."
(American Benefits Council)

An Enrolled Retirement Plan Agent (ERPA) is a person who has earned the privilege of practicing (i.e., representing taxpayers) before the IRS. The ERPA program is established under Circular 230 of the US Dept. of the Treasury and administered by the Office of Professional Responsibility. The IRS has awarded the American Institute of Retirement Education, LLC (AIRE) the contract to conduct ERPA examinations! The window to take the exam this summer is July 7 - August 31.

For more information and to register for the summer exam, visit

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
Court Ruling Endorses SEC's Power to Seek Clawback of Incentive Compensation from CEO not Accused of Wrongdoing
Excerpt: "In a decision of first impression, a federal district court has held that the 'clawback' provision of Sarbanes-Oxley permits the SEC to seek reimbursement of incentive-based compensation from CEOs and CFOs of companies that restate their financial statements as a result of misconduct, even if the CEO and CFO had no personal involvement in such misconduct."
(Haynes and Boone, LLP)

The Choices in Drafting a Compensation Clawback Policy
This discussion covers four specific issues that companies must consider that arise in designing and implementing a compensation clawback policy.
(Michael Melbinger via Winston & Strawn LLP)

California G.ay-Marriage Trial Could Have National Implications
Excerpt: "After a months-long break, a landmark federal trial challenging California's ban on same-s.ex marriage ends Wednesday with closing arguments. The outcome could have wide-ranging implications. . . . If [the judge] strikes down California's ban on g.ay marriage, he could do it in a way that sweeps away anti-g.ay-marriage laws throughout the nation."
(Morning Edition via National Public Radio)

Employers Still 'In the Driver's Seat' on Pay and Benefits
Excerpt: "When and if the economy improves, entrepreneurs might not find as much top-quality talent willing to work under creative compensation arrangements. For now, though, they are capitalizing on one of the few advantages afforded by the recession."
(Chicago Business)

Webcasts and Conferences

"Fundamentals of 401(k) and Other Qualified Plans" - Kansas City
in Kansas on July 14, 2010
presented by SunGard Relius

"Fundamentals of 401(k) and Other Qualified Plans" - Seattle
in Washington on July 14, 2010
presented by SunGard Corbel

Communicating the Valuation Process to Employees
Nationwide on August 3, 2010
presented by National Center for Employee Ownership

ESOP Company Case Studies: Open-Book Management and Incentive Systems
Nationwide on July 14, 2010
presented by National Center for Employee Ownership

ESOP Overview
Nationwide on August 5, 2010
presented by National Center for Employee Ownership

Meet the Innovations Award Winners
Nationwide on July 29, 2010
presented by National Center for Employee Ownership

Revitalizing Your Ownership Culture
Nationwide on August 10, 2010
presented by National Center for Employee Ownership

The Rollout: Introducing a New ESOP to Employees
Nationwide on July 22, 2010
presented by National Center for Employee Ownership

Valuation Challenges for Ongoing ESOPs
Nationwide on July 20, 2010
presented by National Center for Employee Ownership

Press Releases

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Newly Posted Employee Benefits Jobs

Pension Administrator
for Cornerstone Group

Retirement Plan Administration Specialist
for Consulting Actuaries Incorporated
in NJ

Consulting Actuary
for The Angell Pension Group, Inc.
in RI

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