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Retirement Plans Newsletter

September 13, 2010

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[Guidance Overview]
Court Holds ERISA Imposes Statutory Obligation on Employers to Remedy Multiemployer Pension Plan Funding Deficiency
Excerpt: "In a case where the collectively bargained amounts fell short of the statutory minimum, the U.S. Court of Appeals for the First Circuit found that ERISA § 302 imposes an independent obligation on contributing employers to remedy a plan funding deficiency, even if doing so would require contributions beyond those the employers committed to in their collective bargaining agreements."
(Groom Law Group)

[Guidance Overview]
Dealing with the PBGC: A Practical Guide (PDF)
Presentation slides (57); June 16, 2010.
(Keightley & Ashner LLP)

[Guidance Overview]
Upcoming Compliance Deadlines for Multiemployer Retirement Plans
Excerpt: "What follows is a brief description of certain plan amendments that plan sponsors might be required, or might wish, to make before the end of the 2010 plan year."

EBSA Seeks Comments on Plan Loan Regs
Excerpt: "The information collection request relates to the provisions plan documents must include in order for a plan to make loans to participants. The request is scheduled to expire on October 31, 2010."
(Wolters Kluwer Law & Business)

How Retirement Planning Shortchanges Women
Excerpt: "In a recent Boston Consulting Group survey of women investors, respondents said they routinely feel underserved by the financial-services industry, with more than 70% expressing dissatisfaction with the service they're getting. Among the complaints: disrespectful advisers, narrower investment choices based on the assumption that women can't handle risks and patronizing pitches . . . ."
(Wall Street Journal)

Beware of Professors Bearing ETFs
Excerpt: "while market research by these scholars has helped shape how firms design hundreds or thousands of portfolios, the particular investments created by the academics themselves haven't always performed well."
(Ian Salisbury in the Wall Street Journal)

Investment Management Outsourcing: Seven Myths and Realities
Excerpt: "Some employers -- who sponsor underfunded defined benefit (DB) plans that need better risk management or defined contribution (DC) plans that need less-costly, more-customized investment options, for example -- have looked to the expertise of investment-management outsourcers as that protection from the current storm."

Building a Better 401(k): Sponsors Look at ETFs and Commingled Trusts
Excerpt: "Many employers have heard that ETFs and collective trusts can potentially save participants money when used in 401(k) plans, but fewer likely understand the thinking behind how they save money."

Retiring Later Is Hard Road for Laborers
Excerpt: "After years of debate about how to keep Social Security solvent, the White House has created an 18-member panel to consider changes, including raising the retirement age. After years of debate about how to keep Social Security solvent, the White House has created an 18-member panel to consider changes, including raising the retirement age."
(New York Times; free registration required)

A 'Roth Mulligan' Just Might Be Worth a Shot
Excerpt: "But what if you've converted from a traditional IRA to a Roth and then the value of your investments drops? Considering the year we've had in the stock market, that's a great possibility. . . . Well, in the Roth conversion world, you have an opportunity to undo what you did. Call it a Roth mulligan."
(Washington Post; free registration required)

Northern Trust SecLending Suit Plaintiffs Survive First Challenge
Excerpt: "Participants of two 401(k) plans have gotten the go-ahead from a federal judge to press on with their lawsuit that claims Northern Trust breached its fiduciary duty by mishandling its securities lending program."

Are Target Date Funds the Edsel of the Mutual Fund Industry?
Excerpt: "[R]ather than decreasing personal fiduciary liability, given the lack of track record, TDFs may in fact increase fiduciary liability."
(Fiduciary News)

How to Cheat a Public Pension Fund
Excerpt: "[A]ll the S.E.C. can do is force states to follow the budgeting rules that are set by the Governmental Accounting Standards Board. These rules offer, at best, only the illusion of transparency, because they allow governments to base their budgets on economic fictions. Consider, for the sake of comparison, how private corporations, in measuring the value of the assets in their pension systems, are required to use real portfolio market prices."
(Orin S. Kramer in the New York Times (free registration required))

Expanding Automatic Enrollment and Making Saver's Credit a Match Will Help to Improve Retirement Security
Excerpt: "Two members of the President's Economic Advisory Board, Martin Feldstein and Laura Tyson have joined a number of others on both sides of the ideological divide to endorse the Automatic IRA. Combined with the Board's two recommendations, the Automatic IRA and a refundable savers' credit will enable many more Americans to build retirement security."
(Brookings Institution)

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

Pension, Health Benefits Under Scrutiny for University of California Employees
Excerpt: "UC's governing board of regents is scheduled to vote on a proposal to increase the amount current employees and the university contribute to the retirement plan. The payments would go up over the next two years, so that by July 2012, employees would pay 5 percent of their salaries to the retirement plan and UC would pay 10 percent."
(Fresno Bee)

Connecticut Governor Proposes Pension Changes
Excerpt: "Connecticut Gov. M. Jodi Rell has proposed creating a defined contribution plan for new state employees among other efforts to help the state cope with $34 billion in unfunded pension and retiree health benefits liabilities."
(Business Insurance)

Public Workers' Generous Benefits Come at a Price
Excerpt: "Several forces contribute to the gap between public and private sectors. For one, state law prohibits many public employees from striking and that prohibition comes at a price of ensuring fairness for those employees. In addition, many public workers accept lower salaries in exchange for generous health care benefits."
(Milwaukee Journal Sentinel)

Press Releases

Owner of Los Angeles-based Amadeus Salon Indicted for Embezzlement of Retirement Plan Assets
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

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