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Retirement Plans Newsletter

July 26, 2010

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[Official Guidance]
DOL Letter to American Benefits Council Denying Request for Form 5500 Filing Extension (PDF)
1 page.
(U.S. Department of Labor via American Benefits Council)

[Official Guidance]
Text of Proposed PBGC Regs Strengthening and Expanding Debt Collection Methods (PDF)
Excerpt: "This proposed rule would revise the Pension Benefit Guaranty Corporation's regulation on debt collection to conform to the Debt Collection Improvement Act of 1996, the Federal Claims Collection Standards and other legal requirements applicable to the collection of non-tax debts owed to PBGC. This proposed rule would add salary offset and administrative wage garnishment to the collection methods allowed under the current regulation and make other changes to strengthen PBGC's debt collection program."
(Pension Benefit Guaranty Corporation)

[Guidance Overview]
Divorce After Retirement: Retirement Elections Can Be Carved in Stone (PDF)
2 pages. Excerpt: "The court's point is that the parties must abide by the terms and procedures of the pension plan. In the Carmona case, IATSE permitted waivers prior to retirement, not after retirement."
(Brucker & Morra, APC)

[Guidance Overview]
Form 5500 Filing Due for Calendar Year Plans
Excerpt: "IRS penalties for late filing are $25 per day up to a maximum of $15,000. DOL penalties can run up to $1,100 per day (no maximum). For willful violations, individuals face up to a $100,000 fine and/or imprisonment up to 10 years."
(Ford & Harrison LLP)

[Guidance Overview]
Fee Disclosure Regs Issued by EBSA Apply Only to Retirement Plans
Excerpt: "The interim final regulation applies to plan service providers that expect to receive at least $1,000 in compensation in connection with their services and that provide any of the following . . . ."
(Wolters Kluwer)

Turn Lemons Into Roth Conversion Cash
Excerpt: "If your client wants to convert his or her individual retirement account to a Roth IRA this year but doesn't have cash from non-IRA sources to pay the tax on the conversion, consider looking at his or her capital assets."
(Investment News; free registration required)

Building Blocks of a Well-Balanced Retirement Portfolio (PDF)
12 pages. Excerpt: "Often called the passive or index core, an index tier is a comprehensive set of diversified index funds communicated as a distinct part of the plan lineup. An index tier can offer advantages for both sponsors and participants."
(The Vanguard Group, Inc.)

Pensions and Retirement Plan Enactments in 2010 State Legislatures as of July 19, 2010 (PDF)
28 pages. Excerpt: "This report summarizes selected state pensions and retirement legislation enacted from January 2010 through the date of publication. Its goal is to help researchers and policy makers know how other states have addressed issues that could arise in any state. In keeping with that goal, the report excludes most clean-up legislation, cost-of-living adjustments, administrative procedures and technical amendments. "
(National Conference of State Legislatures)

Cash Balance Plans Provide Practical Option for Today's Retirement Environment (PDF)
4 pages. Excerpt: "Although 401(k) plans are likely to remain the leading retirement plan option for years to come, consultants and advisors would be wise to understand the potential of cash balance plans, and to be comfortable in presenting the option to their clients."
(SPARK via Milliman)

401(k) Fees Gain a Bit of Clarity
Excerpt: "Finally, after working on them for years, the Labor Department released rules last week that take a first step toward more clarity. The rules make it easier for employers to make apples-to-apples comparisons when shopping for 401(k)-type plans."
(The New York Times; free registration required)

San Francisco Grand Jury Volunteer Stirs Up a Pension Fund Tempest
Excerpt: "[Unions accuse the volunteer] of abusing his power as a grand juror by supporting a pension-reform initiative sponsored by the city's public defender, Jeff Adachi. That measure would greatly increase pension contributions from city employees. "
(The New York Times; free registration required)

U.S. Oversight of UAL Pension Audits Questioned
Excerpt: "The Pension Benefit Guaranty Corp . . . inspector general said in a letter to a congressional committee that the agency acknowledges some shortcomings in validating the value of the plans but does not believe they will require any changes to benefits."

Some Employers Steal from 401(k) Plans
Excerpt: "To be sure, times are tough for small- and midsized business owners. And now more than ever, these owners, many of whom also serve as the company's retirement plan fiduciary, are caught between a rock and a hard place: Pay the bills or deposit their workers' money into the 401(k) plan. Sometimes, employers make the wrong choice."
(MarketWatch, Inc.)

Retirement Plan Value Down Over 10 Years, Study Shows
Excerpt: "Among the industries analyzed, retail and wholesale contributions were down 33 percent for the 10-year period; manufacturing, down 29 percent; and energy, natural resources, gas and electric, down 24 percent."
(Workforce Management; free registration required)

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

Benefits in General; Executive Compensation

[Guidance Overview]
The Dodd-Frank Act Executive Compensation and Corporate Governance Reforms
Excerpt: The Dodd-Frank Act requires the SEC to amend its rules to modify the executive compensation disclosure requirements to include 'pay versus performance' and 'internal pay disparity' disclosure.'"
(Nixon Peabody LLP)

[Guidance Overview]
Secondment, Deferred Compensation, and Subpart F Income: A Potential Trap
Excerpt: "This article points out that while a secondment agreement, that is properly worded and implemented, may act as an effective shield against Code section 457A, it may also inflict a detrimental blow to the US company's subpart F income. Accordingly, any US company that seconds its employees to related foreign-based entities should re-evaluate that arrangement to assure that it is obtaining the desired tax outcome."
(Miller & Chevalier Chartered)

Executive Compensation Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (PDF)
8 pages. Excerpt: "The Act has broad implications for the executive pay and corporate governance practices of all public companies. Although it will take some time for regulators to issue guidance under the Act, companies should begin to assess and consider how the Act will impact their executive pay practices and the planning process for the 2011 proxy season."
(Thompson Hine LLP)

What Your Board Needs to Know About Corporate Governance and Executive Compensation Provisions in the Dodd-Frank Act (PDF)
7 pages. Excerpt: "While many of the corporate governance-related measures in the Dodd Frank Act are similar to those contained in the RAFSA, the final legislation does differ from the RAFSA in a number of areas, including requirements with regard to non-binding shareholder votes on 'golden parachutes,' the frequency of Say on Pay votes and the elimination of the RAFSA's majority voting standard for the election of directors."
(Sutherland Asbill & Brennan LLP)

Special Report on Employee Relocation
Excerpt: "The recession forced a drastic shift in relocation philosophies in the last two years, as companies struggled to find the right people for a position, move them where they're needed and keep them there in an economically feasible way."
(Workforce Management; free registration required)

Fish v. Greatbanc Trust Corp. Amicus Brief, in Support of Plaintiffs' Opposition to Defendants' Joint Motion for Summary Judgment
Excerpt: "Section 413 of [ERISA], generally gives plaintiffs six years from the date of a fiduciary breach to file an action to redress the breach. In cases where 'the plaintiff' had 'actual knowledge' of the breach, however, the statute shortens the period to three years beginning on 'the earliest date on which the plaintiff had actual knowledge of the breach or violation.'"
(U.S. Department of Labor)

Supplemental Pay in the Healthcare Industry: Overtime Pay, Bonuses, and Shift Differentials
Excerpt: "The use of supplemental pay in the healthcare industry differs from other service-providing industries primarily in that shift differentials play a greater role, while bonuses appear to play a lesser role. The relative importance of shift differentials in the healthcare industry is probably related to the 'round-the-clock' nature of healthcare services in general."
(U.S. Bureau of Labor Statistics)

State Judges Can Rule on QDRO Cases
Excerpt: "A federal appellate court has ruled that state courts can decide whether domestic relations orders . . . meet the requirements for being considered qualified domestic relations orders . . . under federal benefits law."

Webcasts and Conferences

EPCRS: Plan Correction Issues Phone Forum
Nationwide on August 25, 2010
presented by Internal Revenue Service (IRS)

IRA and HSA Webinars On Demand
Nationwide on July 23, 2010
presented by Collin W. Fritz & Associates, Ltd.

Press Releases

Ryan Przybilla Joins Integrated Retirement Initiatives, LLC
Integrated Retirement Initiatives, LLC

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