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Retirement Plans Newsletter

July 29, 2010

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[Guidance Overview]
Countdown to the 2009 Form 5500 Filing Deadline for Calendar-Year Plans
Excerpt: "The deadline for filing the 2009 Form 5500 for a calendar-year plan is fast approaching: midnight on Monday August 2, 2010. An automatic two and one-half month extension, to October 15, 2010, is available to all plans, provided a request is made by filing a Form 5558 before the normal due date."
(The Segal Group, Inc.)

[Guidance Overview]
DOL Issues Its Long Awaited Fee Disclosure Regulation
Excerpt: "Manner of Receipt. The regulations require that the disclosure state if the covered plan will be billed for the compensation or if the compensation will be deducted directly from the plan."
(Miller & Chevalier Chartered)

[Guidance Overview]
Court Finds Defendants Breached ERISA's Prudence Standard When They Invested in Retail Share Classes of Mutual Funds
Excerpt: "Retail share classes may . . . pay higher revenue sharing fees, and, at least with respect to the three funds at issue in the case, that was true."
(Miller & Chevalier Chartered)

[Guidance Overview]
Court Rejects Nationwide's Counterclaim Attempt in Revenue Sharing Suit
Excerpt: "[The judge] said Nationwide failed to meet the standard of Rule 23(b)(2) because monetary damages, and not injunctive relief, predominates. He said Nationwide's counterclaim lacks any formal request for an injunction against the Trustees, and pointed out that Nationwide never contends that the Trustees must be enjoined from entering future agreements in which their annuity providers receive revenue sharing payments from mutual funds or other investment vehicles."

What Plan Sponsors Should Know About Stable Value Funds (PDF)
4 pages. Excerpt: "The purpose of this brochure is to provide plan sponsors with a peek at the complexities and key issues surrounding SVFs while providing guidance for both monitoring and evaluating the funds and communicating these issues to participants."
(National Association of Government Defined Contribution Administrators)

U.S. House Passes Resolution for National Save for Retirement Week in October
Excerpt: "Goals for National Save for Retirement Week: Make employees more aware of how critical it is to save now for their financial future; Promote the benefits of getting started saving for retirement today; Encourage employees to take full advantage of their employer-sponsored plans by increasing their contributions."
(National Association of Government Defined Contribution Administrators)

Britain Plans to Scrap Forced Retirement Age in 2011
Excerpt: "Under the government's proposals, the default retirement age would begin to be phased out from April 2011 and come to an end by October next year. Ministers said the move was designed to give people more choice as they enjoyed longer and healthier lives."
(The New York Times; free registration required)

Unfunded Liabilities of State and Local Government Employee Retirement Benefit Plans (PDF)
24 pages. Excerpt: "We analyzed 153 state and local pension plans, representing more than 85 percent of liabilities for state and local pensions and other benefits, and recalculated their liabilities using a lower discount rate. Our calculations show: Unfunded pension liabilities are approximately $2.5 trillion, compared to the reported amount of $493 billion."
(National Center for Policy Analysis)

Why IASB-Proposed Rules Are Important to U.S. Pension Plans
Excerpt: "Immediate recognition of gains, losses, and the effect of plan changes. Current IASB rules allow the smoothing of a plan's gains and losses, along with the effect of plan changes over the future working life of plan participants -- generally about 10 years, explained Inglis. The exposure draft would eliminate current amortization and smoothing of these items, and require their immediate recognition through OCI."
(The Vanguard Group, Inc.)

Retirement Benefits a Top Factor in Keeping Affluent Employees Loyal
Excerpt: "The latest Merrill Lynch Affluent Insights Quarterly finds that, other than compensation and promotions, retirement benefits are the next greatest factor keeping affluent employees loyal to a company (60%)."

Employee Allegations of Excessive 401(k) Fees Gain Ground in Courts
Excerpt: "A ruling by a judge, who in one case said Edison International did 'substantial' harm to employees by not negotiating lower fees from the firm running the 401(k) plan, may bolster other lawsuits."
(Los Angeles Times)

Upton Sinclair's Insight for Improving Your 401(k) Returns
'It is difficult to get a man to understand something when his salary depends upon his not understanding it.' Excerpt: "The salaries of brokers and insurance company representatives depend on persuading employers with 401(k) plans to include actively managed funds (where the fund manager attempts to beat a designated benchmark) as investment options in the plan."
(The Huffington Post)

A Revenue-Sharing Case That Could Have Far-Reaching Implications is Decided
Excerpt: "Well, apparently they did not even ask the investment fund providers to waive the minimums for investment in institutional class shares. That's right, they never asked if those minimums could be waived - so, of course, they weren't (particularly damning was the testimony of the employer's expert that such waivers were routinely granted, and for plans of much smaller size). Think of it as 'the duty to ask.'"

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Benefits in General; Executive Compensation

[Guidance Overview]
Dodd-Frank and Executive Compensation: What Should a Public Company and Its Compensation Committee Do?
Excerpt: "Key Compliance Issues and Tips [on] Executive Compensation Disclosure: Forward-Looking Statements - Beware of 'forward-looking statements' with respect to pay vs. performance. (Multi-year bonus programs should be reviewed carefully.)"
(Fox Rothschild LLP)

New Executive Pay and Corporate Governance Mandates Have Become Law
Excerpt: "Companies now must submit executive pay and golden parachutes to shareholder votes, comply with new disclosure rules and compensation committee and adviser independence standards, and adopt clawback policies."
(Mercer LLC)

Feds Could Lose Talent Without Same-S.ex Leave, Benefits, Report Says
Excerpt: "Almost two-thirds of Fortune 1000 companies and 83 percent of Fortune 100 companies offer leave and other benefits to such employees, while the federal government is hamstrung by the Defense of Marriage Act, prohibiting recognition of same-s.ex marriage and proscribing benefits to such couples, according to CRS."
(Thompson Publishing Group Inc.)

Webcasts and Conferences

"Answering Your Controlled Group Questions" Web Seminar
Nationwide on August 24, 2010
presented by SunGard Relius

"The New Service Provider Regs: The Wait Is Over" Web Seminar
Nationwide on August 10, 2010
presented by SunGard Relius

2010-2011 Basic IRA Seminar
in Iowa on September 21, 2010
presented by Collin W. Fritz & Associates, Ltd.

Employers Forum Workshop
in New York on September 7, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

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Newly Posted Employee Benefits Jobs

Senior Retirement Advisor
for Freedom One Financial Group
in MI

Client Relationship Manager - Texas or Atlanta, GA
for Transamerica Retirement Services
in GA, TX

Director of Sales
for Dedicated Defined Benefit Services
in CA

Compliance Reviewer/Analyst
for Retirement Plan Services, LLC
in MO

Operations Manager
for Pension Corporation of America
in OH

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