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Retirement Plans Newsletter

July 2, 2010

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[Guidance Overview]
Single-Employer DB Plan Funding Obligations Under 2010 Funding Relief
Excerpt: "To advance discussions in the pension community, this analysis projects aggregate regulatory funded status and minimum required contributions for single-employer DB plans both with and without this latest relief."
(Towers Watson)

[Guidance Overview]
Employee Plans Subcommittee of IRS's Advisory Committee on Tax Exempt and Government Entities Publishes History of Determination Letter Process
Excerpt: "The report also contained recommendations for streamlining the determination letter process, improving customer service, and a review of the fee structure for certain nonamender failures that are corrected using the Voluntary Correction Program provisions provided under ECPRS."
(McKay Hochman Co.)

[Guidance Overview]
Disaster Area Restatement Extension
Excerpt: "Due to damage caused by the federally declared disasters, Plan Sponsors that maintain M&P (master and prototype) or VS (volume submitter) defined contribution plans may have missed the April 30, 2010, deadline to adopt an . . . EGTRRA-approved M&P or VS defined contribution plan and/or to submit, if applicable, a determination letter application to the [IRS]."
(McKay Hochman Co.)

[Guidance Overview]
Massachusetts District Court Rejects 'Prudent Investor Rate' in Favor of PBGC's Discount Rate (PDF)
Excerpt: "This ruling is one of a string of decisions that are contrary to decisions in the 1990s and 2000, which rejected PBGC's use of its discount rate to determine liability for underfunded, terminated pension plans."
(Groom Law Group)

[Guidance Overview]
Pension Funding Relief Enacted for Multiemployer Funds (PDF)
Excerpt: "Multiemployer plans that meet the "solvency test" . . . may elect to treat the portion of any experience gain or loss attributable to 'net investment losses' incurred in either or both of the first two plan years ending after August 31, 2008 as an item separate from other experience losses, to be amortized in equal annual installments over the period . . . ."
(Buck Consultants)

Statutory Provisions Relating to Employee Benefit Plans in Dodd-Frank Wall Street Reform and Consumer Protection Act
As approved by the House of Representatives on June 30, 2010.
(Profit Sharing / 401k Council of America)

Summary of the Provisions Relating to Employee Benefit Plans in Dodd-Frank Wall Street Reform and Consumer Protection Act
As approved by the House of Representatives on June 30, 2010.
(Profit Sharing / 401k Council of America)

Social Security Policy Options (PDF)
Excerpt: "This CBO study examines a variety of approaches to changing Social Security, updating an earlier work, Menu of Social Security Options, which CBO published in May 2005."
(U.S. Congressional Budget Office)

U.S. Pensions a Significant State Budget Challenge, According to S&P
Excerpt: "States and local governments should not count on future economic growth to solve the financial challenges stemming from public pension funding, and should instead take a proactive approach to retirement benefit funding, Standard & Poor's said Wednesday."
(Market News International)

New Allegations Move Forward Schering-Plough Stock Drop Suit
Excerpt: "[A U.S. District Judge] denied the company's motion to dismiss the case saying: "Plaintiffs have alleged "dire circumstances" sufficient to overcome the presumption of prudence at this stage. In particular, Plaintiffs have alleged: precipitous decline in the value of Company stock, Defendants' knowledge of the anticipated harm to the company, as well as the conflicted status of fiduciaries."

Florida Ends Public Employees' Double-Dipping of Pension and Salary
Excerpt: "Under revisions to retirement rules passed by the Legislature last year, state workers no longer can retire, sign up for pension checks, sit out a month and then come right back to work and a paycheck."
(Orlando Sentinel)

Retirement Industry Squabbles Over Proposed Final 401(k) Advice Rules
Excerpt: "One area of the proposed rule that's receiving considerable attention by industry participants is the DOL's request for comments on whether it should provide regulations on what constitutes generally accepted investment theories."
(Investment Advisor)

Much of Industry That Provides Services to ERISA Qualified Retirement Plans Composed of Non-Fiduciary Plan Investment Service Providers
Excerpt: "These non-fiduciaries have no meaningful obligation to disclose the total costs that they bring to the table when proposing bundled or unbundled investment and administrative services to plan sponsors."

House Leaders Offer Common Sense on Social Security
Excerpt: "In short, Mr. Boehner and Mr. Hoyer are talking about sensible adjustments that would achieve significant debt reduction at modest social cost."
(The Washington Post; free registration required)

Meet some of the biggest pension and welfare benefit celebrities at the Western Benefits Conference! Get the latest on what's going on in the world of pension and welfare benefits from industry experts and IRS officials live in person! The Western Benefits Conference takes place July 18-20 in Los Angeles, CA and is a joint program by the Western Pension & Benefits Conference (WP&BC) and the American Society of Pension Professionals & Actuaries (ASPPA).

For a program listing and to register, visit today!

Sponsored by WP&BC and ASPPA

Executive Compensation; Benefits in General

[Guidance Overview]
Deferential Review of ERISA Plan Determinations: Communication and Disclosure of Discretionary Authority
Excerpt: "The 8th Circuit's holding in Jobe [v. Med. Life Insurance Co.] is consistent with rulings of the 7th, 9th, and 11th Circuits that were based on similar fact patterns. In each of those cases, the court found that the provisions of the SPD were not sufficient to establish the discretionary authority of the plan fiduciary."
(McGuireWoods LLP)

Temporary Federal Employment Raises Concern Among Lawmakers and Unions
Excerpt: "In a hearing before the House Oversight and Government Reform Federal Workforce Subcommittee, witnesses told lawmakers that temporary employees are important to agencies' missions, but they also are difficult to retain because they don't receive the same benefits as permanent workers."

Guidance on Sound Incentive Compensation Policies Issues by Agencies
Excerpt: "The good news is that the Agency Guidance is principles-based, which means that it does not prohibit or, generally, require, specific acts or payments. Instead, the Agency Guidance sets-forth certain executive compensation and governance principles, which financial institutions should quickly adopt."
(Michael Melbinger via Winston & Strawn LLP)

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