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Retirement Plans Newsletter

July 6, 2010

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Run blocks of plans through all testing in an automated, unattended mode with ASC Compliance Testing System's Single Step Processing (SSP) tool. Produce multiple correction options with SSP (e.g. ADP HCE returns vs. QNECs) in one pass. Partner the sophistication of ASC's Compliance Testing with Money Manager Link and SSP for even more efficiencies. ASC offers a full range of retirement plan automation products including DC/401(k) and Defined Benefit software, Document Management and Generation System, and EFAST2 approved 5500 forms. Learn more!
Sponsored by ASC

[Official Guidance]
PBGC Disaster Relief in Response to Severe Storms, Flooding, Mudslides in West Virginia
Disaster Relief Announcement 10-12. Excerpt: "Pension Benefit Guaranty Corporation ('PBGC') is waiving certain penalties and extending certain deadlines in response to the severe storms, flooding, mudslides and landslides that occurred beginning June 12, 2010, in West Virginia."
(Pension Benefit Guaranty Corporation)

[Guidance Overview]
Pension Funding Relief Signed Into Law on June 25 (PDF)
Excerpt: "It is important to keep in mind that electing to stretch out the payments will slow the progress of reducing a plan's underfunding, and increase the chances that a plan may fall below certain funding thresholds (80%/60%). However, many plan sponsors will welcome the opportunity to reduce their contributions in the near term."

[Guidance Overview]
Second Circuit Holds That Retirees' State Law Claims Against Investment Advisor Are Preempted by Federal Law
Excerpt: "[This] alert addresses a recent decision . . . in which the Court held that the Securities Litigation Uniform Standards Act of 1998 precluded two state court actions filed by retirees who were allegedly misled into retiring after having been given deceptive financial projections by their former financial advisors."
(Nixon Peabody LLP)

Reducing Costs of 401(k) Plans with ETFs and Commingled Trusts
Excerpt: "Most of the money invested in equity within 401(k) plans is held in actively-managed mutual funds. Although the investment objectives of these funds can offer more promising returns than the passive investment strategies of broad index funds, actively-managed funds can be costly. Without giving up the investment objectives of actively-managed funds, 401(k) plans can achieve substantial savings by shifting to exchange-traded funds (ETFs) and commingled trusts . . . ."
(Center for Retirement Research at Boston College)

What Exactly Are 12b-1 Fees, Anyway?
Excerpt: "Mutual-fund investors paid about $9.5 billion last year in 12b-1 fees -- and if you don't know what that is, you're not alone. The Securities and Exchange Commission worries that many people are unaware of or don't really understand these charges, which are subtracted from fund assets to pay for 'distribution' and/or 'services.'"
(Wall Street Journal)

10 Useful Websites for 401(k) Plan Sponsors and ERISA Fiduciaries
Excerpt: "[A] handful of web-sites have sprung up offering useful information geared specifically to 401k plan sponsors and fiduciaries. Some of these sites are free and some are member-only. "
(Fiduciary News)

U.S. Postal Office Loses Billions of Dollars Due to Excessive Pension Contributions
Excerpt: "The U.S. Postal Service overfunded its pension accounts by $50 billion, because of the way in which its obligations have been calculated, according to a new audit."

Root of Government Pension Problems
4 pages.
(Charles Jeroloman, Chairman Delray Beach, FL Police & Fire Pension Plan)

The ASPPA Annual Conference is attended by 1,600 of your colleagues, with more than 60 workshops and 80 vendor displays in the exhibit hall focusing on all areas of the retirement business. Attendees even get face time with representatives from every aspect of the retirement plan industry, including the IRS and DOL and Members of Congress and their staffs.
Sponsored by ASPPA

Executive Compensation; Benefits in General

[Official Guidance]
Text of IRS Final Regs on Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirements; Disclosure Requirements With Respect to Prohibited Tax Shelter Transactions; Requirement of Return and Time for Filing (PDF)
11 pages. Excerpt: "This document contains final regulations that provide guidance under section 4965 of the Internal Revenue Code (Code), relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties . . . . "
(Internal Revenue Service)

[Guidance Overview]
Final Guidance on Sound Incentive Compensation Policies Applicable to Banking Organizations (PDF)
6 pages. Excerpt: "The agencies responsible for supervising banking organizations have issued final guidance on sound incentive compensation policies to assist banking organizations in designing and implementing incentive compensation arrangements that effectively consider potential risks and risk outcomes. The final guidance retains the same key principles as in proposed guidance issued in October 2009, but includes clarifications to address issues raised by commenters."
(Buck Consultants)

Disappearing Perk: Employee Stock Options
Excerpt: "Last year, a little more than three-quarters of the companies in the S&P 1500, which tracks small- and mid-cap stocks as well as the conventional S&P 500 index, relied upon stock options to pay their CEOs. Compare that to five years prior, when that figure stood at nearly 93%."

Links to Online Federal Employee Benefits Calculators
Includes links to calculators for the various federal retirement plans, the Thrift Savings Plan, the Federal Employees' Group Life Insurance program, and the Federal Long Term Care Insurance Program.
(Washington Post; free registration required)

Webcasts and Conferences

Health Care Reform Update: Grandfathered Plans Webinar
Nationwide on July 14, 2010
presented by Warner Norcross & Judd LLP

Press Releases

US Labor Department Adopts Amendment to Class Exemption Involving Qualified Professional Asset Managers
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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Newly Posted Employee Benefits Jobs

Actuarial Analyst - Pension
for Charles Schwab
in OH

Marketing & Sales Representative
for Nova 401(k) Associates
in DC, MO, OH, OR, PA, TX, WA

Human Resources Generalist
for The Practice Advisory Group, LLC
in TX

VP, Client Services-Retirement
for Prudential
in PA

Actuarial Assistant
for The Benefit Practice
in CT

ERISA Paralegal or Attorney
for The Benefit Practice
in CT

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