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Retirement Plans Newsletter

June 21, 2010

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[Official Guidance]
Text of IRS Notice 2010-48: April 30 Deadline for Pre-Approved DC Plan Restatements Extended for Sponsors in Eight States
Excerpt: "[For plan sponsors who] were affected by the storms and other severe weather in those counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia declared Presidential Disaster Areas during the period from March 1 through May 31, 2010[,] Notice 2010-48 administratively extends to July 30, 2010, the April 30 deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS, to July 30, 2010. The section 401(b) remedial amendment period for these retirement plans is also extended to July 30."
(Internal Revenue Service)

[Guidance Overview]
PBGC Technical Update 10-2 Provides 'Box 5' Relief Procedure for Variable Rate Premium Payers (PDF)
1 page. Excerpt: "Importantly, Technical Update 10-2 sets a tight deadline for claiming such relief. Plan administrators must send the necessary paperwork to PBGC within 30 days of the later of ? the date of issuance of the Technical Update, or the date the comprehensive premium filing for the applicable plan year is due."
(Groom Law Group)

[Guidance Overview]
IRS Reviews Tax Levy Rules for Retirement Plan Funds and Income
Excerpt: "The memorandum also confirmed that a levy on retirement income is subject to an exemption amount (that is, a portion of the participant's retirement income is exempt from the levy) and generally remains in effect after the statutory collection period expires, until the IRS releases it."
(Employee Benefits Institute of America)

Four South Dakota Retirees Suing the State to Protect Their Annual Cost of Living Increases
Excerpt: "The retirees claim that individuals drawing benefits from the system will lose between $40,264.62 and 477,414.68 in pension benefits over the next 20 years because of a change in state law enacted by the 2010 Legislature."

10 Things 401(k) Providers Won't Tell You
Excerpt: "1. 'We're making money on your 401(k) -- even if you're not.'"

Comparative Costs and Risks for Sponsors of Traditional Defined Benefit, Defined Contribution, and Hybrid Plans
Excerpt: "The results show that costs and risks for sponsors vary significantly with plan type, funding strategy and participant demographics. Throughout the scenarios, the hybrid plan exhibits good features of cost efficiency and risk reduction to the plan sponsor."
(Social Science Research Network)

The Briskin Consulting Study of Small-Retirement-Plan Sponsors
Excerpt: "This new research study . . . explores the drivers of satisfaction and discontent among small-plan sponsors. It offers insights into the issues that spur decisions to switch plan providers and reveals which kinds of providers are more likely to be chosen -- and why."
(Briskin Consulting)

IRS Rulings on a Paid Leave to 401(k) Transfer
Excerpt: "A participant may elect to contribute PTO time to the 401(k), which would otherwise be cashed out. Similar to the prior ruling, automatic pour-overs to the 401(k) are treated as employer contributions, and employee elections are treated as amounts subject to the Section 401(k) limitations."
(Employee Benefit News; free registration required)

Is a Roth IRA Safe from Taxes?
Excerpt: "Without a crystal ball, it is impossible to answer the question definitively. But the short answer appears to be: 'No, Congress won't tax Roth conversions, at least not soon.' And the prospect of longer-term changes isn't deterring experts who are converting their own accounts."
(The Wall Street Journal)

In Budget Crisis, States Take Aim at Pension Costs
Excerpt: "Nearly all of the cuts so far apply only to workers not yet hired. Though heralded as breakthrough reforms by state officials, the cuts phase in so slowly they are unlikely to save the weakest funds and keep them from running out of money. Some new rules may even hasten the demise of the funds they were meant to protect."
(The New York Times; free registration required)

Research Cautions against 4% Spending in Retirement Rule
Excerpt: "Researcher Nobel Laureate William Sharpe . . . says the suggestion that the retiree spend an inflation-adjusted 4% of his or her retirement assets each year, while keeping the balance of those assets in a portfolio that typically includes both stocks and bonds, might be a reasonable strategy in a world where stocks aren't risky."

Senate OKs Pension Funding Relief Provision
Excerpt: "Business Insurance reported that the pension provisions were grafted onto H.R. 3962, the Medicare bill, after a tax bill to which the pension funding provisions had been previously attached stalled out when Democrats were unable to muster enough votes to stop floor debate."

Double-Dipping State and Local Employees Collect Paycheck and a Pension in Ohio
Excerpt: "An analysis by Ohio's eight largest newspapers found: One in four public school leaders in Ohio's 614 districts bring home the bacon twice. Allowing superintendents to retire early halts their contributions into the fund and pulls millions of dollars out -- while a variety of factors threaten the fund's long-term financial health."
(Cleveland Live, Inc.)

Four Simple Ways to Boost Your Nest Egg
Excerpt: "Most investors know (or should know) the tried-and-true methods to help nest eggs grow. Shift money automatically from your paycheck to a savings plan; take advantage of your employer's matching contributions to 401(k) plans . . . . But with the economy and markets still struggling, investors are seeking, and financial advisers are recommending, additional steps to shore up retirement savings."
(The Wall Street Journal)

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Sponsored by ASPPA

Webcasts and Conferences

A Roadmap for the New Electronic 5500
Nationwide on June 30, 2010
presented by Buck Consultants

Alternative Investing Summit
in California on December 5, 2010
presented by Opal Financial Group

Emerging Managers Summit South
in Texas on October 14, 2010
presented by Opal Financial Group

Endowment & Foundation Forum
in Massachusetts on November 1, 2010
presented by Opal Financial Group

European Alternative & Institutional Investing Summit
Nationwide on October 25, 2010
presented by Opal Financial Group

Global Asset Allocation Summit
in Nevada on October 3, 2010
presented by Opal Financial Group

Private equity Summit for Institutional
in California on September 15, 2010
presented by Opal Financial Group

Real Asset Investing Forum
in California on September 15, 2010
presented by Opal Financial Group

Press Releases

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Newly Posted Employee Benefits Jobs

Plan Administrator - Transaction
for New York Life Retirement Plan Services
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in PA

Financial Service Associate
in VA

Team Manager - Installation Services
for Transamerica Retirement Services
in CA

Team Manager - Installation Services - West Chester, Ohio
for Transamerica Retirement Services
in OH

DC Account Manager/Relationship Specialist
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Strategic Communications Consultant
for New York Life Retirement Plan Services
in IL

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