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Retirement Plans Newsletter

June 30, 2010

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NIPA's APA/APR designation programs provide comprehensives skills and knowledge to demonstrate your professional competency of pension administration. NIPA's enrollment for the August exam window is still available. The deadline to register is July 15. Visit for more information.

[Guidance Overview]
Pension Relief Act Extends Amortization Periods for Single and Multiemployer Plan Funding (PDF)
2 pages. Excerpt: "The plan sponsor of a participating multiemployer plan that elects this relief is required to notify participants, beneficiaries, and the PBGC of its election to use the relief provisions."
(Groom Law Group)

[Guidance Overview]
Second Circuit Holds Taft-Hartley Funds Are Inherently Conflicted
Excerpt: "On June 24, 2010, the U.S. Court of Appeals for the Second Circuit held, in Durakovic v. Building Service 32 BJ Pension Fund, . . . that Taft-Hartley funds (administered by boards of trustees consisting of an equal number of union and employer representatives) are inherently conflicted when making benefit determinations, and that this conflict needs to be considered by federal district courts when reviewing plan determinations under an arbitrary and capricious standard of review."
(Proskauer Rose LLP)

[Guidance Overview]
FAQs on Service Provider E-Signature Option
Excerpt: "The DOL recently announced that service providers can, with proper authorization, use their own electronic filing credentials to execute a Form 5500 on behalf of their clients."
(Sungard Relius)

Pension Funding Relief As Enacted Seen As Best Under the Circumstances
Excerpt: "Kathryn Ricard, Senior Vice President, Retirement Security, for the ERISA Industry Committee, said that while the retirement services industry would have preferred not to have the conditions in the final bill tying the longer pension amortization periods to "excess compensation or extraordinary dividends or stock redemptions," the connections were at least understandable."

Pension Funding Relief Becomes Law; Legislation Also Reverses Cuts in Payments to Medicare Providers
Excerpt: "Single-employer plans also get a reprieve from funding-based restrictions on benefit accruals and Social Security level-income options. Other funding relief extends to certain charitable organizations and plans still following pre-PPA funding rules."
(Mercer LLC)

Two More California State Employee Labor Unions Making Concessions
Excerpt: "For these unions, the givebacks mean employees will work longer to reach pension age, will pay more in to retirement accounts and accept other rules to limit payouts."
(San Francisco Chronicle)

Spousal Health Shocks and the Timing of the Retirement Decision in the Face of Forward-Looking Financial Incentives
Excerpt: " This paper helps to clarify whether previously omitted forward-looking financial incentives can explain the strong role attributed to health shocks in the retirement decisions of coupled individuals."
(Center for Retirement Research at Boston College)

The 403(b) Market
Excerpt: "The . . . chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year."

ERISA Fidelity Bonds: What to Think About and What to Look For
Excerpt: "[P]lan fiduciaries should not simply take it for granted that a bond will cover everything and everyone that it needs to cover. Since ERISA requires that fiduciaries act prudently in carrying out their duties, one of the things that fiduciaries should put on their "must do" list is implement a process to evaluate the bond."
(Reish & Reicher)

At Least 24 Public Pension Funds Have Cut Benefits This Year
Excerpt: "In some states, like Colorado, the impetus for change came from the pension fund itself. Officials of the $35.4 billion Public Employees' Retirement Association in Denver launched an 18-month town-meetings program to convince employees and retirees that their benefits must be cut."
(Pensions & Investments)

Legislation Pending to Permit 401(k) Rollovers to Roths for Employees Who Are 59 1/2 Years Old or Older
Excerpt: "According to a draft copy of the bill . . ., it would allow the rollover of amounts in a 401(k) retirement plan of otherwise permissible distributions to a Roth-type account in the same plan."

International Accounting Standards Board Answers Questions on Proposed Changes to Accounting for Retirement Plans
Excerpt: "The IASB has published answers to frequently asked questions [on its proposed changes to employers' accounting for defined benefit pension and retiree medical plans covering] the project's scope, relationship to other IASB and FASB activities, key elements, transition and effective date."
(Mercer LLC)

City of San Diego Continues to Score Court Victories Related to Pension Benefits
Excerpt: "The latest ruling by Superior Court Judge Jeffrey Barton targets one of the city's most controversial benefits: the Deferred Retirement Option Plan, commonly known as DROP. The program, which began in 1997, allows employees to collect pension payments in a special account while still employed."
(The San Diego Union-Tribune)

Companies Can Boost 401(k) Participant Saving at No Additional Cost
Excerpt: "One way to boost employee savings, without companies taking on more expense, is to change how they match contributions . . . ."
(Reuters via The New York Times; free registration required)

Retirees Need Flexibility, Not Mandates, in Retirement Planning
Excerpt: "[G]overnment policy should not constrict or distort the market through mandates or incentives that favor one product or approach over others. The government can best help Americans saving for retirement by providing quality education and information about retirement asset distribution at and through retirement. [As published in BNA Pensions and Benefits Daily on June 29, 2010.]"
(Investment Company Institute)

Valued by every practitioner and recommended for every ERPA candidate, The ERISA Outline Book, 2010 Edition by Sal L. Tripodi, J.D., L.L.M. offers six volumes of vital information on everything you need to know. Highlights include: IRS guidance on the waiver of 2009 required minimum distribution; automatic enrollment guidance from the IRS and Treasury; guidance on discontinuing safe harbor nonelective contributions; EFAST2 electronic filing system and DOL guidance; reporting guidance for 403(b) plans, guidance on deferrals from paid time off plans, court cases on scrivener's errors, and over 100 new rulings, guidances and regulations affecting retirement plans.

Order your copy of The ERISA Outline Book, 2010 Edition today! Visit now!

Sponsored by ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
ERISA Claims Review: A Tale of Two Cases
The article contrasts Conkright v. Frommert and MetLife v. Glenn to develop practical solutions for dealing with the current litigation climate in ERISA claims review. The article is reproduced with permission from Pension & Benefits Daily.
(Groom Law Group)

Executive Compensation and Corporate Governance Provisions in Dodd-Frank Bill (PDF)
7 pages. Excerpt: "[The Dodd-Frank Wall Street Reform and Consumer Protection Act as approved by the House-Senate Conference Committee on June 25] reconciles competing versions of financial reform contained in bills passed by the House in December and the Senate in May."
(Frederic W. Cook & Co., Inc.)

Executive Pay, Governance Reforms Heading to Final Votes As Part of Financial Regulatory Reform Agreement
Excerpt: "The bill would require nonbinding say-on-pay votes, mandatory clawback policies, and greater independence for compensation committees and their advisers. The legislation also would authorize the SEC to write proxy access rules."
(Mercer LLC)

Job Security and Benefits Top Contributors to Job Satisfaction
Excerpt: "According to the report, compensation/pay, a factor that has appeared on employees' top five list each year since the survey's inception, fell to fifth place for the first time."

Savings Rate Grows Faster Than Consumer Spending
Excerpt: "According to the Commerce Department, the personal savings rate in May -- the part of every paycheck that goes unspent -- rose to 4 percent, the highest amount in nearly a year . . . ."
(The Washington Post; free registration required)

Webcasts and Conferences

"Power Struggle - New Power of Attorney Rules for 2848" Web Seminar
Nationwide on July 15, 2010
presented by SunGard Relius

Smartcast Webinar -- Health Care Reform Update III
Nationwide on July 13, 2010
presented by FutureOffice Network

Press Releases

NIPA Announces 2010-2011 Officers and Directors
National Institute of Pension Administrators

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in MI

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in PA

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in NY

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