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Retirement Plans Newsletter

August 12, 2010

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[Guidance Overview]
Service Provider Fee Disclosure Regulations: The Context
Excerpt: "This is the first in a series of Technical Updates relating to the recently released DOL regulations relating to service provider contracts with plans covered by the regulations. This Technical Update explains the basis for the DOL's issuance of the regulations and the overall purpose of the regulations."
(SunGard Relius)

[Guidance Overview]
Options for Obtaining a Determination Letter for Your Prototype Plan
Excerpt: "Sponsors of prototype plans had their profit sharing and 401(k) plan documents approved by the IRS and received Opinion Letters from the IRS on or before April 30, 2008. Employers can rely upon the Opinion Letters and do not need to obtain individual determination letters."
(Employee Benefit News; free registration required)

Social Security 75th Anniversary Survey Report: Public Opinion Trends
Excerpt: "All four AARP surveys -- conducted to celebrate the 50th (1985), 60th (1995), 70th (2005), and 75th (2010) anniversaries of Social Security's founding -- have demonstrated the high regard that the American public has for Social Security as an important American institution, not only for America's retired citizens, but for the entire American adult population."
(AARP)

Target-Date Funds Questioned
Excerpt: "New academic research finds that managers of target-date funds tend to invest in their own 'family' of funds, which can result in higher fees and lower performance. What can HR do to ensure its workers who use such funds are properly saving for their retirement?"
(Human Resource Executive Online)

New Pension Rules May Depend on Where You Work, When You Started Work and If You Were Elected
Excerpt: "In a handful of states, employees will increase their personal contributions to the plan, or begin contributing for the first time."
(Governing)

The 401(k) Gospel According to Matthew Hutcheson
Excerpt: "The 40-year-old leader of the 'independent fiduciary movement' is passionate about making retirement plans more responsive to the needs of participants."
(Retirement Income Journal)

The U.S. Retirement Market, First Quarter 2010 (PDF)
33 pages. Excerpt: "A separate report . . . shows that between December 2009 and March 2010, retirement assets rose 2.6 percent, from $16.1 trillion to $16.5 trillion. The report includes assets held in private-sector defined benefit (DB) plans, government pension plans, DC plans -- including 401(k), 403(b), and 457 plans -- annuities, and individual retirement accounts (IRAs)."
(Investment Company Institute)

The Retirement Process
Excerpt: "For most people, retirement isn't a day, it's a process. . . . That has a lot of implications for the way you save and manage your money before, during, and after that transitional period. Here are some thoughts about the day you retire."
(Reuters via The New York Times; free registration required)

Philadelphia, PA, Public Workers Rush to Get DROP Pension While They Can
Excerpt: "The Deferred Retirement Option Program allows employees eligible for retirement to pick a retirement date four years in the future. That decision freezes the employee's pension benefit and prompts the city to start putting the person's pension payment aside in an account with a 4.5 percent yearly interest rate."
(The Philadelphia Inquirer)

Retirement Accounts More than a Third of U.S. Household Assets
Excerpt: "A report from the Investment Company Institute (ICI) finds Americans held $16.5 trillion in retirement assets at the end of the first quarter of 2010, accounting for 36% of all household financial assets in the United States."
(PLANSPONSOR.com)

Majority of ESOP Sponsors Offer Additional Retirement Plan
Excerpt: "Approximately 90% of ESOP Association members surveyed reported having retirement savings plans in addition to the ESOP (employee stock ownership plan) including 401(k) plans, pension plans, stock purchase plans, and stock options."
(PLANSPONSOR.com)

Appellate Court Rules in Verizon's Favor in ERISA Case
Excerpt: "Verizon Communications Inc. shouldn't be penalized for a drafting error in the preparation of a cash balance pension plan, the 7th U.S. Circuit Court of Appeals in Chicago ruled Tuesday."
(Pensions & Investments; registration may be required)

Ohio Public Pension Systems' Refusal to Disclose Records Draws Attention of State Lawmakers
Excerpt: "Two state lawmakers want to open up state retirement records to public scrutiny after The Plain Dealer and seven other Ohio newspapers were denied access to the information."
(Cleveland Live, Inc.)

[Opinion]
Investors Misled by Brokers Masquerading as Fiduciaries
Excerpt: "[B]rokers often subscribe to a more lax 'suitability' standard--meaning they are free to promote products that benefit the broker, and brokerage, more than the client, as long as those products are not blatantly unsuitable."
(Forbes.com)

[Opinion]
Corporate Pension Bomb Set to Explode: Earnings to Take a Big Hit As Firms Are Forced to Top Off Unfunded Pension Plans
Excerpt: "Among companies with obligations to pay defined benefit pensions, the big risk has always been the discount rate, which is the interest rate used to determine the present value of a pension fund's future liabilities."
(Forbes.com)

[Opinion]
Social Security, the Trust Fund and Funny Money
Excerpt: "[L]et's talk about one of the world's biggest piles of funny money -- the $2.54 trillion Social Security trust fund. It matters now because Social Security revealed plans last week to tap the fund for $41 billion this year and will begin tapping it on a regular basis in less than five years."
(The Washington Post; free registration required)




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Benefits in General; Executive Compensation

Federal Workers Earning Double Their Private Counterparts
Excerpt: "Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row."
(USA TODAY)

[Opinion]
Say on Pay Under Dodd-Frank
Excerpt: "Section 951 of Dodd-Frank adds a new Section 14A to the Exchange Act, entitled 'Shareholder Approval of Executive Compensation,' which provides that, not less frequently than once every three years, a company's annual proxy statement must include a separate resolution subject to shareholder vote to approve the compensation of executives, as disclosed in the company's CD&A, the compensation tables, and any related material."
(Michael Melbinger via Winston & Strawn LLP)


Webcasts and Conferences

"The New Service Provider Fee Regs - The Wait Is Over" Web Seminar, An Encore Presentation
Nationwide on September 8, 2010
presented by SunGard Relius


Press Releases

PBGC Assumes Responsibility for Chicago Sun-Times Pension Plans
Pension Benefit Guaranty Corporation (PBGC)

US Department of Laborís ERISA Advisory Council to Hold Meeting Aug. 31 to Sept. 2 and Solicits Nominations
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

RPAG Announces Newest Affiliated Member
Retirement Plan Advisory Group


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Newly Posted Employee Benefits Jobs

Valuation/Recordkeeper
for Trust Company of Illinois
in IL

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for USI Consulting Group, Inc.
in NY

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in NJ

Plan Administrator
for Retirement Plan Services Company
in GA

Pension Plan Operations Representative
for Transamerica Retirement Services
in CA




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