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Retirement Plans Newsletter

September 15, 2010

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Cross-Tested/Safe Harbor 401(k) Plan Design Workshop and 403(b) Plan Design Workshop - only a few cities left in September.
401 (k) Plans: What Every Practitioner Should Know (Sept. - Oct.) - enhance your 401(k) knowledge and get the most recent plan guidance updates.
ERISA Workshop (Oct.-Nov.) - stay up-to-date on the new fee disclosure regulation and other recent changes in tax rules and important developments affecting qualified plans.
Read more about our programs here.

[Guidance Overview]
Seventh Circuit Allows Correction of Scrivener's Error Avoiding Potential Windfall of $1.67 Billion in Unanticipated Benefit Payouts
Excerpt: "The Internal Revenue Service (IRS) has been following Young closely for its potential implications to its correction program -- the Employee Plans Compliance Resolution System (EPCRS). Although the IRS has stated repeatedly that it does not recognize scrivener's error, it has approved corrections permitting the retroactive amendment of a plan document to conform with plan operations."
(Buchanan Ingersoll & Rooney PC)

[Guidance Overview]
DOL Requirement for Service Providers to Disclose Fees to Fiduciaries (PDF)
4 pages.
(Prudential Retirement)

Age Affects Roth 401(k) Contributions, Hewitt Survey Finds
Excerpt: "In an examination of 20 Roth 401(k) plans with just over 500,000 eligible participants, Hewitt Associates Inc. found that 16.6 percent of employees age 20 through 29 made contributions, as did 9.4 percent of employees age 30 through 39. By contrast, 6 percent of employees age 40 through 49 made contributions as did 4.2 percent of those age 50 through 59, and 2.6 percent of employees age 60 and older."
(Workforce Management; free registration required)

Social Security's Financial Outlook: The 2010 Update in Perspective
Excerpt: "This brief puts the current report in perspective and discusses a few interesting wrinkles, such as the outlook for a cost-of-living adjustment in 2011 and the implications of a decline in the Average Wage Index."
(Center for Retirement Research at Boston College)

Chart: Automatic Enrollment in Savings and Thrift Retirement Plans, March 2009
Excerpt: "Workers in larger establishments (100 or more workers) were almost 3 times more likely than their counterparts in smaller firms (1 to 99 workers) to work for a company that includes an automatic enrollment provision in its savings and thrift retirement plan: 25 percent compared with 9 percent."
(U.S. Bureau of Labor Statistics)

What Every 401k Fiduciary Should Know About Target Date Funds
Excerpt: "A better understanding of the history, intent and the terms associated with TDFs may help the 401k [fiduciary]. This understanding may also allow plan sponsors to better assess just how TDFs impact their personal fiduciary liability."
(Fiduciary News)

How to Design a Retirement Education Program That Reduces Your Company's Legal Liability
Excerpt: "[The author outlines a program you can put into place that she feels] is sufficiently protective given the current legal environment. This does not guarantee you will never face a legal issue, but it offers a high degree of protection should you face legal challenges surrounding the information you provided employees to help them make investment decisions."
(Liz Davidson, Financial Finesse, via, LLC)

Panel to Examine Sustainability of Maryland Public Pension Systems
Excerpt: "A news story on said the state legislature created the new Public Employees' and Retirees' Benefit Sustainability Commission as part of this year's budget process. It is supposed to examine the State Employees' Retirement and Pension System, State Employee and Retiree Health Benefits System, and Teachers' Retirement and Pension System."

Schwab Study Reveals Opportunity to Increase Retirement Plan Participant Engagement
Excerpt: "While a majority (55%) of 401(k) plan participants surveyed say they would use free personalized advice if their employer made it available, an analysis of actual participant behavior in Schwab-administered plans reveals less than 10% of people with access to advice actively use it."

Inquiry Focuses on White House Role in Preserving Union Pensions at Delphi
Excerpt: "The special inspector for taxpayer bailout funds is looking into whether the Obama administration pressed General Motors in bankrup.tcy to backstop the pensions of the union retirees of a former division, Delphi."
(The New York Times; free registration required)

Recent Results from the Milliman 100 Pension Funding Index
Excerpt: "The funded status of the 100 largest corporate defined benefit pension plans dropped by $108 billion during August 2010 . . . ."

Stealth Liability Lurks for Employers with Ongoing Pension Plans Who Downsize or Sell Businesses
Click on the title link under 'Items of Interest' on the target page. Excerpt: "An employer contemplating a downsizing or an asset or stock sale has a variety of costs and other considerations to take into account. If the employer has a PBGC-covered pension plan, particularly if (as is usually the case) it is underfunded on a PBGC plan termination basis, it is important to evaluate whether the downsizing or sale might trigger Section 4062(e) liability, as this liability could end up being the largest one the employer must face."
(Keightley & Ashner LLP)

ICI Statement for the DOL/Treasury Joint Hearing on Lifetime Income Options
Excerpt: "[The remarks] focus on three areas the Agencies would like to explore further: First, specific concerns that may deter workers from selecting annuities rather than other distribution options; Second, what information would help participants make choices in managing and spending down retirement benefits; and Third, whether and how to disclose account balances as monthly income streams."
(Investment Company Institute)

ASPPA's Comments at DOL's Lifetime Income Distribution Options Hearing
5 pages.
(American Society of Pension Professionals & Actuaries)

Testimony on Behalf of Profit Sharing/401k Council of America for Hearing on Lifetime Income Products
4 pages. Testimony presented by David L. Wray, President, Profit Sharing/401k Council of America, before the Departments of Labor and the Treasury Joint Hearing on Lifetime Income Products, September 14, 2010.
(Profit Sharing / 401k Council of America)

Enrollment is now open for ASPPA's Live EA-2A review course in the Washington, DC area October 1-4, 2010. Instructor David B. Farber, MSPA, EA, ASA puts his more than 25 years of teaching experience to work in our well-reviewed EA preparatory and actuarial primer classes. Tuition includes practice problems and solutions, handy syllabi, suggested readings and other information regarding the EA exams. Early registration ends September 2, so don't delay - enroll today!

For more information and to enroll, visit the ASPPA website.

Sponsored by ASPPA

Benefits in General; Executive Compensation

Employee Ownership Update for September 14, 2010
NCEO Executive Director Corey Rosen discusses the following: The NCEO has completed an extensive analysis of ESOP companies based on DOL data; unlike prior studies, this one combines data from multiple plans. The DOL has issued interim regulations for certain service providers to qualified retirement plans. The IRS is cracking down on 'ROBS' plans. A new report finds that higher CEO pay is not linked to superior shareholder returns.
(National Center for Employee Ownership)

Webcasts and Conferences

2010 Fall Tour: Advanced IRAs – Operational Issues
in Minnesota on September 22, 2010
presented by Ascensus

2010 Fall Tour: IRA Fundamentals
in Minnesota on September 21, 2010
presented by Ascensus

2010 Web/Telephone Seminar: Basic IRAs
Nationwide on October 5, 2010
presented by Ascensus

Form 8928 and Excise Tax Compliance: COBRA, HIPAA, Health Reform, and Other Rules
Nationwide on September 15, 2010
presented by EBIA / Thomson Reuters

Health Savings Accounts
Nationwide on September 30, 2010
presented by Lorman Education Services

Press Releases

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Newly Posted Employee Benefits Jobs

Pension Plan Administrator
for Thomas & Fees Pension Services
in CA

Defined Contribution Plan Administration Specialist
for Bukaty Companies Retirement Plan Services
in KS, MO

Senior New Business Specialist - Defined Benefits
for Great-West Retirement Services
in MA

Client Service Manager
for The Newport Group
in FL, NC, WI

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