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Retirement Plans Newsletter

August 19, 2010

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[Guidance Overview]
Legislative Glitch Could Affect Pension Contributions for Eligible Charity Plans
Excerpt: "Under a provision in the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (the 2010 Act) passed earlier this year, funding requirements and benefit restrictions enacted by the Pension Protection Act of 2006 (PPA) do not apply to eligible charity plans until 2017."
(Towers Watson)

The Next Pension Crisis: Taft-Hartley Multiemployer Plans
Excerpt: "[A post by 'The Lid' on the underfunding of multiemployer pension plans includes the following:] 'Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.'"
(Workplace Prof Blog)

Issue Brochure: Evolution of the Government Deferred Compensation Plan Market (PDF)
4 pages.
(National Association of Government Defined Contribution Administrators)

FASB Extends Comment Period on Loss Contingencies Exposure Draft which Includes Employer Reporting for Multiemployer Withdrawal Liability
Excerpt: "The proposed amendments would lower and broaden the current disclosure threshold. Current U.S. GAAP requirements would be enhanced with additional information required. Included in the subtopics to be amended is multiemployer plan withdrawal liability disclosure information."
(International Foundation of Employee Benefit Plans)

Should Annuities Be an Option in 401(k)s?
Excerpt: "'There are fundamental problems with putting these kinds of products into an employer-sponsored plan, not least because they are very complex and difficult to understand, and many people think that the guarantee they offer is for their principal,' . . . ."
(Investment Advisor)

Money Managers Paid $12 Million to Middle Men to Line Up Kentucky Public Pension Fund As Client
Excerpt: "The public disclosure of the $12 million in payments over five years, including $5 million to a lone middleman, were made with results of a fund audit during a meeting of the $14 billion (assets) Kentucky Employees Retirement System's investment committee."

Supporters of Reforming California Public Pensions Say Bill Would Not Be Effective
Excerpt: "Pension reform advocates said that amendments added to the bill have weakened the bill's overall purpose. The amendments, which are supported by unions, would allow negotiations on issues such as education incentives and shift changes to determine a final pay figure."
(California HealthCare Foundation)

Can Target-Date Funds Protect You Against Loss, But Give You the Growth You Need in Retirement?
Excerpt: "Robert Isbitts, chief investment advisers for Emerald Asset Advisors in Weston, Fla., also objects to putting retirement savings on autopilot. 'Target-date funds don't have the ability to adapt to changes in the broad financial market environment,' he says. 'In retirement investing, like life, hurdles and surprises come at you, and you have to adapt.'"

U.S. Alleges Fraud in New Jersey Pension Funding
Excerpt: "Federal regulators accused the State of New Jersey of securities fraud on Wednesday for claiming it had been properly funding public workers' pensions when it was not."
(The New York Times; free registration required)

SEC's 12(b)-1 Proposal: Does It Actually Increase 401k Fiduciary Liability?
Excerpt: "Under the current SEC proposal, the migration from the 12b-1 distribution model to the fee-based model may become the predominant strategy for this simple reason: Even if some distribution system incorporating the new 12b-2 model emerges, 401k plans will have to change their recordkeeping systems to account for individual lots. This accounting method - which may represent a costly change - is currently not done for retirement plans."
(Fiduciary News)

Common Trigger for 401(k) Plan Litigation Is Presence of Company Stock in Plan
Excerpt: "Indeed, one has only to look at the two-month period following the struggle to contain the current oil spill in the Gulf of Mexico and the number of litigants and potential litigants circling the BP 401(k) plans to appreciate just how much more aggressive the plaintiffs' bar has become in pursuing such actions"

New Study Identifies Revenues for Doubling of Social Security Payout
Excerpt: "Despite Social Security's new role as a de facto national retirement plan, many budget deficit hawks are calling for cuts to it to decrease America's indebtedness. But that would only make things worse for retiring Americans. The real problem with Social Security is that it is not robust enough to play this role as retirement security of last resort . . . . The bigger problem is that its payout is so meager."

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Benefits in General; Executive Compensation

[Guidance Overview]
Dodd-Frank's Mandatory Executive Compensation Clawback: A Practical Review and Assessment
Excerpt: "While the concept of 'clawing back' executive compensation is not new, the Act goes well beyond what has been required before."
(Pepper Hamilton LLP)

California Proposition 8 Barring Same-S.ex Marriage Ruled Unconstitutional: What the Ruling Means for Employers
Excerpt: "The court's ruling is likely to have limited effect on employers so long as federal law does not recognize same-s.ex marriage. California law already extends the same rights and obligations to registered domestic partners as to spouses, including, for example, the right to take family leave due to the serious illness of a domestic partner."
(Littler Mendelson P.C.)

Federal Compensation Critics Keep the Debate Alive
Excerpt: "[A Cato Institute budget analyst], responding to [the Office of Personnel Management Director's] comments to The Washington Post, says his colleagues and other critics are citing data from the Bureau of Economic Analysis instead of the Bureau of Labor Statistics because the BEA provides a comprehensive analysis of the financial impact of a worker's benefits package."
(The Washington Post; free registration required)

Dodd-Frank Adds New Subsection to Exchange Act, 'Disclosure of Hedging by Employees and Directors'
Excerpt: "The obvious aim of this provision is to encourage companies to adopt policies that prohibit hedging transactions. Section 955 does not require any company to adopt such a policy, but we expect that most will do so."
(Michael Melbinger via Winston & Strawn LLP)

Webcasts and Conferences

CDHC Solutions Forum
in Georgia on September 9, 2010
presented by FieldMedia, LLC

NY CLE Program: Healthcare Reform - Are You Ready? Top 10 Immediate Action Items
in New York on September 16, 2010
presented by WEB (Worldwide Employee Benefits Network ), New York Chapter

Press Releases

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