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Retirement Plans Newsletter

September 8, 2010

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DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA'06 Pension Funding.
* Funding Target and Target Normal Cost with 3-rate segments
* 404(o) Cushion; 430 minimum and 404(o) maximum contributions
* Funding Target Attainment Percentages (FTAPs)
Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems.
sales@datair.com or call 1-888-328-2474

[Guidance Overview]
Proposed DOL Update to Regs for Prohibited Transaction Exemption Requests
Excerpt: "The proposed regulation contains a number of 'important substantive amendments,' according to the preamble to the regulations. Many of the changes involve the information that must accompany the exemption request. Several changes improve the notification to interested parties that the request has been made."
(Wolters Kluwer)

[Guidance Overview]
IRS Guidance for Calculating Excludable Portion of Pension Distributions Where No Exclusions Were Reported in Prior Years
Excerpt: "Two methods that were suggested by the participant for correcting the prior years' returns were rejected because they did not comply with Code Sec. 72 and underlying regulations."
(Wolters Kluwer)

Access to Early Retirement and Mortality
Excerpt: "We do not find any adverse effect of early retirement on mortality for females. Death causes indicate a significantly higher incidence of cardiovascular disorders among eligible workers, suggesting that changes in health-related behavior explain increased mortality among male early retirees. "
(Social Science Research Network)

Vanguard Reshapes the Annuity Evaluation Process
Excerpt: "Those who want to purchase an annuity can face some perplexing challenges. They may find it hard to compare offers among different companies because they can't tell how various features affect payouts. They also may find it difficult to determine overall costs. And their ability to make a decision may be further complicated by annuity providers who aren't using up-to-date technology."
(The Vanguard Group, Inc.)

GASB Preliminary Views Employers' Tool Kit
Excerpt: "[The tool kit] consists of a number of items specifically drafted (and reviewed by actuaries and others) to help employer representatives understand the basics of what GASB is proposing, and appreciate the drastic consequences if GASB's PV becomes the new accounting and disclosure standard for governmental employers. These items have been designed to simplify as best as possible the complicated issues in the PV, and focus on one of the most potentially dangerous, namely, the elimination of the 'Annual Required Contribution' . . . and the inclusion of a new 'Net Pension Liability,' . . . on the face of the employer's balance sheet, thereby de-linking pension accounting from pension funding."
(National Council on Teacher Retirement)

Celebrate 401k Day! Exclusive Interview with PSCA's Robert Benish
Excerpt: "The PSCA created 401k Day [September 10] to remind plan sponsors and participants how important 401k's are in helping people save for retirement. By picking a day to focus on 401k's - any day of the year - we hope people join their plans and actively take a role in saving for their own retirement."
(Fiduciary News)

Louisiana's Unfunded Pension Liability Reaches $9.3 Billion, According to Study (PDF)
3 pages.
(Edward J. O'Boyle / Mayo Research Institute)

Reforming Teacher Pensions for a Changing Work Force
Excerpt: "[T]he problems with teacher pensions are not just financial. And they do not just affect individual teachers and retirees. The way these plans are structured can negatively influence the teaching work force as a whole. At a time when improving the quality of classroom instruction is a national priority, key structural elements in teacher retirement plans impair the ability of schools to recruit, hire, retain, and compensate high-quality teachers and principals."
(Education Sector)

Connecticut Governor Puts Forward Benefit Unfunded Liability Reduction Plan
Excerpt: "Connecticut Governor M. Jodi Rell has proposed a sweeping public employee pension and health care benefit reform package in an effort to deal with the state's $34-billion unfunded benefit liability. A news release from Rell's office said Rell wants to invest a 'sizable' portion of any resulting savings toward reducing the unfunded liability."
(PLANSPONSOR.com)

The Impact of Early Retirement on Health
Excerpt: "We measure health outcomes by purchase of different types of prescription medicine and mortality. Our results support prior findings in the literature: early retirement has no effect on the medicine purchase risk in either short or long run."
(Social Science Research Network)

Many See Grim Future, No Retirement, As They're Forced to Tap Into Savings
Excerpt: "This Labor Day, [there is a] growing number of Americans who've slashed their retirement savings and who worry more about their future retirement security, another unwelcome byproduct of the recession."
(Chicago Sun-Times)

Is Giving IRA Assets to Charity Still OK?
Excerpt: "if the handful of retirement-savings provisions still on the table make it into law later this year, consumers could still make those tax-free donations -- as well as leave assets in their 401(k)s while converting them to tax-free Roth status, among other changes."
(The Wall Street Journal)

Employers on the Hook for 401(k) Fees
Excerpt: "In a batch of class-action lawsuits, employees are holding their employers liable for high fees and poor disclosure in 401(k) plans. While the suits have produced mixed results, experts warn that companies may be more vulnerable to lawsuits than they realize."
(Philadelphia Business Journal via American City Business Journals)

[Opinion]
Group Letter Stating Concerns with IASB Proposed Amendments to IAS 19 (PDF)
3 pages. The letter was sent by the American Benefits Council, the European Paritarian Institutions of Social Protection, the European Federation for Retirement Provision, and the National Coordinating Committee for Multiemployer Plans.
(American Benefits Council)

[Opinion]
Group Comment Letter to IASB on Proposed Amendments to IAS 19 (PDF)
8 pages. The letter was sent by the American Benefits Council, the European Paritarian Institutions of Social Protection, and the National Coordinating Committee for Multiemployer Plans.
(American Benefits Council)

[Opinion]
We Can't Sustain Public Pensions, According to a Pennsylvania County Controller
Excerpt: "The Chester County Retirement Board has struggled with two competing goals: meeting our state-mandated responsibility to provide government employees with defined-benefit pensions, and minimizing the burden on taxpayers. I believe these two goals are no longer compatible."
(The Philadelphia Inquirer)




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

[Guidance Overview]
Corporate Governance, Executive Compensation and Investor Protection Under Dodd-Frank
Excerpt: "Beginning with proxy statements for shareholder meetings to be held on or after July 22, 2011, companies are required to disclose whether the compensation committee retained or obtained the advice of a compensation consultant, and whether the compensation consultant's work raised any conflicts of interest and, if so, the nature of the conflict and how the conflict was (or is being) addressed."
(Bond, Schoeneck & King, PLLC)

[Guidance Overview]
Third Circuit Upholds Lower Court Decision Granting Benefits Under a Program Providing Separation Benefits
Excerpt: "The Business Exception to coverage under the Displacement Program has two primary requirements: (1) the contract of sale must provide for employment of the employee by another employer, and (2) MFC must determine that the position to be provided to the affected employee is comparable to the position the employee held before the sale, and in particular, that it 'initially' provides base salary and incentive compensation opportunities which, in the aggregate, are reasonably similar to those that were provided by the MFC subsidiary."
(Stanley D. Baum of Fellheimer & Eichen LLP)

New Jersey Governor Proposes More Changes to State Workers' Pensions and Benefits
Excerpt: "Christie offered a broad outline but few specifics on his upcoming proposals, except for indicating -- in response to one of about a dozen audience questions -- that one bill would bar retired public workers from receiving a disability pension while working at another job seemingly requiring the same level of exertion."
(CourierPostOnline.com/Courier-Post.)


Webcasts and Conferences

2010 SPARK Forum
in Florida on November 7, 2010
presented by SPARK Institute

How to Avoid Liability in a Post 408b-2 World
in California on September 21, 2010
presented by Western Pension & Benefits Conference, San Diego Chapter

Regulatory and Legislative Changes
in California on September 16, 2010
presented by Western Pension & Benefits Conference - Orange County Chapter


Press Releases


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Defined Benefit Senior Analyst
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in IL, MO, TX

Assistant Retirement Plan Administrator
for RSM McGladrey, Inc.
in MD




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