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Retirement Plans Newsletter

August 25, 2010

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[Official Guidance]
Text of the IRS Employee Plans News, August 20, 2010 Edition (PDF)
4 pages. This edition covers two issues: 1). Post April 30, 2010, Issues Impacting Adopting Employers Who Use IRS Pre-Approved Plan Documents: Information for employers who failed to adopt an approved EGTRRA restated plan document (with links to the Voluntary Correction Program Submission Kit to resolve the failure) or failed to submit a determination letter application for their EGTRRA restated plan by April 30, 2010. 2). Tax Return Preparers: IRS announces new tax return preparer application system and user fee, and releases proposed regulations to amend Circular 230 rules."
(U.S. Internal Revenue Service)

NAGDCA 2010 Survey of Defined Contribution Plans: Stable Value
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities."
(National Association of Government Defined Contribution Administrators)

Activist Pension Funds Drawing Up List of Corporate Boards
Excerpt: "The Securities and Exchange Commission will meet at 10:00 a.m. eastern time on Wednesday to decide whether to adopt a rule that would give shareholders an easier way to nominate corporate board directors."
(The New York Times; free registration required)

Dodd-Frank Meets ERISA: The Impact of Wall Street Reform on Plan Investments
Excerpt: "Paraphrasing the words of the President -- for all those employee benefit plan fiduciaries who are wondering what Wall Street reform means for you, here's what you can expect. . . . Nevertheless, there are a few steps plan fiduciaries should consider taking now, and some things to keep in mind for the future. Please view the linked ['Pension & Benefits Reporter'] article for further discussion."
(Groom Law Group)

IRS Official Clarifies When Forfeitures Can Be Used as Plan QNECs
Excerpt: "Employers will no longer be permitted to use forfeitures, or nonvested amounts left in employee accounts, for correcting certain kinds of retirement plan qualification errors, an IRS official says. Forfeitures can be a source of qualified nonelective contributions for some corrections but not others . . . ."
(Tax Management Inc.)

Lawmakers Respond to SEC Proposed Rules for Target-Date Funds
Excerpt: "In the letter, [the three Senators] recommended that the SEC both broaden the application of the rule to non-mutual funds and require the inclusion of additional disclosures in marketing materials [and] they urged the SEC, together with the Department of Labor, to remind plan fiduciaries of their duty to prudently select and monitor target-date funds offered to participants in defined contribution pension plans."

Charts and Graphs Are Good, but Don't Change Target-Date Fund Names, Says Industry
Excerpt: "[It was also] suggested that text accompanying the chart would state explicitly that the asset allocation could change from what the chart illustrates based on changes in the managers' assumptions as to retirement readiness, longevity and market risk."

Comment Period Extended on FASB Proposal Affecting Multiemployer Plan Withdrawal Liability Disclosure
Excerpt: "For employers contributing to multiemployer pension plans, the proposal would require disclosure of potential liability on withdrawing from such plans - even if withdrawing is only a remote possibility - if that liability would severely impact the employer."
(Mercer LLC)

Another Illinois Pension Plan Sells Investments to Cover Benefits
Excerpt: "Illinois Teachers' Retirement System . . . plans to sell $3 billion in investments, or about 10% of its $33.1 billion in assets, in the current fiscal year to pay pension benefits . . . . The system is the fifth Illinois statewide defined benefit plan to sell off investments this fiscal year to pay benefits."
(Pensions & Investments; registration may be required)

Advisors Look to Guaranteed Income Annuities to Help Fund Clients' Retirement
Excerpt: "According to the nation's leading branch managers, employee-sponsored plans and Individual Retirement Accounts are overwhelmingly the two largest sources of income for baby boomers at, or nearing, retirement."
(On Wall Street)

Retiree Ponzi Scheme, the U.S. Social Security System, Is $16 Trillion Short
Excerpt: "If we re-label Social Security 'payroll' taxes as 'general revenue wage taxes,' Social Security's fiscal gap increases by $60 trillion, and the fiscal gap of all other government activities falls by $60 trillion, leaving the overall $202 trillion gap unchanged. Even by the Trustees' measure, there's a massive problem. Coming up with $16 trillion requires permanently raising revenue or cutting benefits by 26 percent, starting now. In other words, the program is 26 percent underfunded."
(Laurence Kotlikoff via Bloomberg L.P.)

Debating Target-Date Funds' Tricky Labels
Excerpt: "In an effort to improve the way the funds are labeled, the Securities and Exchange Commission has proposed a number of changes, such as requiring a table that illustrates how funds shift from risky investments to more conservative ones and disclosing information about how the funds will look on the target-date in a prominent in marketing materials, adjacent to the name of the fund."
(The Wall Street Journal)

PSCA Comments on SEC's Proposed Rule on Advertising and Marketing Target-Date Funds
2 pages.
(Profit Sharing / 401k Council of America)

Letters to the Editor: Let Congress Fix the Multi-Employer Pensions It Broke
Excerpt: "Your editorial 'The Next Pension Bailout' (Aug. 16) ignores the real issue: equity and fairness for small employers. Sen. Robert Casey's bill is not a bailout, it simply addresses a problem Congress created."
(The Wall Street Journal)

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

New Tax Laws May Increase the Popularity of Life Insurance and Annuities with Long-Term-Care Riders
Excerpt: "[The] so-called combo LTC products, including annuity/LTC as well as life insurance/LTC blends, are likely to become even more popular as some deferred tax breaks take effect and pricing benefits become clearer."
(Employee Benefit Adviser; free registration required)

Update on California's Ban on Same-S.ex Marriage Held Unconstitutional
Excerpt: "Update: An Aug. 16, 2010, stay by a three-judge panel of the 9th U.S. Circuit Court of Appeals put same-s.ex weddings in California on hold while it considers the constitutionality of the state's g.ay marriage ban."
(Society for Human Resource Management)

Webcasts and Conferences

"401(k) Plans: What Every Practitioner Should Know"
Nationwide on September 22, 2010
presented by SunGard Relius

"401(k) Plans: What Every Practitioner Should Know" - Atlanta
in Georgia on September 23, 2010
presented by SunGard Relius

"401(k) Plans: What Every Practitioner Should Know" - Denver
in Colorado on September 22, 2010
presented by SunGard Relius

"403(b) Plan Design Workshop" - Minneapolis
in Minnesota on September 24, 2010
presented by SunGard Relius

"Cross-tested/Safe Harbor 401(k) Plan Design Workshop" - Denver
in Colorado on September 24, 2010
presented by SunGard Relius

"Cross-tested/Safe Harbor 401(k) Plan Design Workshop" - Minneapolis
in Minnesota on September 23, 2010
presented by SunGard Relius

"Cross-tested/Safe Harbor 401(k) Plan Design Workshop" - Pittsburgh
in Pennsylvania on September 22, 2010
presented by SunGard Relius

2nd Annual Retiree Healthcare Congress
in Nevada on October 25, 2010
presented by Global Media Dynamics

Form 8928 and Excise Tax Compliance: COBRA, HIPAA, Health Reform, and Other Rules
Nationwide on September 14, 2010
presented by EBIA / Thomson Reuters

Press Releases

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