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Retirement Plans Newsletter

August 30, 2010

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That Pension? You Might Have to Pay It Back
Excerpt: "[P]ensions paid by single employers fall into a murky area of federal law governed under Treasury and Department of Labor regulations. It is clear that, when administrators make a mistake, the plans are supposed to recoup the money, but nothing specifies from whom."
(Orange County Register)

Retirees: Here's How to Game Social Security
Excerpt: "Hey, retirees: Looking for a way to bring in more money? Give back all the Social Security checks you have received so far. But you had better do it fast, since this loophole could soon close."
(The Wall Street Journal)

Comments by SPARK Institute About Interim DOL Regs on Disclosure to Fiduciaries of Fees by Service-Providers (PDF)
13 pages. Excerpt: "[The interim regulation] appears to shift Investment Fund Information disclosure responsibility from investment fiduciary service providers with respect to investments they issue and manage to an unaffiliated, non-fiduciary record keeper. [Further,] we are concerned that record keepers will be obligated to provide record keeping services and, in turn, provide Investment Fund Information for investment options demanded by plan sponsors that do not have materials that are regulated by a State or federal agency."
(The SPARK Institute, Inc.)

10 Signs Your 401(k) Plan Is a Clunker
Excerpt: "High costs . . . . No investment advice . . . . Revenue-sharing and hidden mark-ups . . . . The plan adviser is not a 'real' fiduciary . . . ."
(Daily Finance)

Only Thing Worse Than Not Telling 401(k) Participants How Much to Save Is Offering Reckless Target Date Funds
Excerpt: "[T]he biggest problem with target date funds is that they mislead 401(k) participants into thinking that the most important component of retirement adequacy is the investments you choose when it's the actually the size of the contribution to retirement savings relative to income along with the investment time horizon."
(Jane White of Retirement Solutions)

Congress and IRS have embarked on a mission to increase oversight of paid Federal tax return preparers with new rules aimed at Form 1040 and Form 5500 preparers. Learn from Brian Graff and Craig Hoffman about the concerted effort by the IRS to require registration for all preparers and institute competency testing and continuing education requirements for those not "enrolled," and how these new rules may dramatically affect you and your business.
Sponsored by ASPPA

Benefits in General; Executive Compensation

[Official Guidance]
Text of Proposed DOL Regs Restating and Amending Procedures for Prohibited Transaction Exemptions (PDF)
22 pages. Excerpt: "[T]he Department would require the disclosure of the following information from a qualified independent fiduciary: A copy of such fiduciary's engagement letter with the plan describing the duties the fiduciary will undertake on behalf of the plan; a detailed explanation of why the proposed transaction is in the interests of the participants and beneficiaries; a statement that, in instances where the transaction is ongoing, the fiduciary agrees to monitor the proposed transaction throughout its duration on behalf of the plan, taking any appropriate action to safeguard the interests of the plan; what qualifications the fiduciary has to perform these duties on behalf of the plan and the level of ERISA experience the person has; and a representation to the effect that such fiduciary understands and acknowledges his or her ERISA duties and responsibilities in acting as a fiduciary on behalf of the plan. . . . As a general matter, an independent fiduciary retained in connection with an exemption transaction must receive no more than a de minimis amount of compensation from the parties in interest to the transaction or their affiliates."
(Employee Benefits Security Administration, U.S. Department of Labor)

[Guidance Overview]
New Form 5500 FAQs Address Permitted Special Characters and Submission of Schedule H Attachments
Excerpt: "The DOL has added three new questions to its FAQs on EFAST2, the all-electronic filing system required for 2009 plan year filings (due in 2010 for most plans). . . . The two FAQs relevant to welfare and 401(k) plans address permitted special characters and the handling of combined attachment files for Schedule H (large plan financial information). "
(Employee Benefits Institute of America)

Do You Know Your GRId Assessment Scores?
Excerpt: "Whether company boards view GRId as the latest marketing gimmick from RiskMetrics or as a viable tool that will be used by investors to gain insight into the corporate governance of a company, each company and its advisors should take time to understand how the company's assessments were derived by RiskMetrics and what actions by the board might influence those assessments."
(DLA Piper)

Time is Now for Changes to Municipal Government Pensions and Health Plans in Massachusetts
Excerpt: "[I]n many towns Massachusetts taxpayers subsidize medical services that are available to all retirees under Medicare. Yet feckless local boards, under the thumbs of unions, refuse to enact even basic economies."
(Boston Globe)

Webcasts and Conferences

Health Reform's Internal Claims and Appeals New Rules - Changes You Must Make Now
Nationwide on September 29, 2010
presented by Thompson Interactive

Press Releases

KS Health and Welfare Team Starts Blog
Kilpatrick Stockton LLP

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