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Retirement Plans Newsletter

September 20, 2010

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[Guidance Overview]
Senate Approved Bill Would Allow Roth Accounts in 457 Plans
Excerpt: "[T]he Creating Small Business Jobs Act of 2010 allows participants in 457 plans to treat elective deferrals as Roth contributions, effective for tax years beginning after 2010."

[Guidance Overview]
FASB Exposure Draft Proposes Employers Contributing to Multiemployer Pension Plans Disclose New Information on Financial Statements
Excerpt: "This Bulletin summarizes the changes proposed in the Exposure Draft, to give trustees of multiemployer pension plans a sense of the possible impact of the proposal, if adopted."

[Guidance Overview]
Service Provider Fee Disclosure Regulations: Initial Disclosures
Excerpt: "This is the sixth in a series of Technical Updates relating to the DOL's July 2010 service provider fee disclosure regulations. . . . This Technical Update explains certain additional disclosures for recordkeeping services and disclosure regarding the manner of receipt of compensation."
(SunGard Relius)

Actuarial Assumption Saves Illinois Billions; Technique Used in Other States As Well
Excerpt: "Cuts for workers not yet hired do not save much money in the present -- but that's where actuaries can work their magic. They capture the future savings for use today by assuming, in essence, that 100 percent of today's work force is already earning tomorrow's skimpier benefits."
(New York Times; free registration required)

Corporate Pension Funding Gaps Loom Larger
Excerpt: "Many of America's largest pension funds are sticking to expectations of fat returns on their investments even after a decade of paltry gains, which could leave U.S. retirement plans facing an even deeper funding hole and taxpayers on the hook for huge additional contributions."
(Wall Street Journal)

Schwarzenegger Considers Bills to Prevent Excessive Pay and Pension Benefits to City Managers
Excerpt: "The other proposals would rein in excessive retirement benefits, such as the $600,000 annual pension that former Bell [Calif.] City Manager Robert Rizzo could get, by capping the salary that could be used for calculating pensions and by preventing 'pension spiking' -- padding salaries to boost retirement pay. Rizzo's pay, before he resigned, was nearly $800,000."
(Los Angeles Times)

Annuity Payout Requirement Put on Back Burner
Excerpt: "Key Obama administration executives are distancing themselves from a proposal requiring employer-sponsored retirement plans to offer an annuity payout option."
(Pensions & Investments)

Families Struggle to Build Nest Egg in Wake of Recession
Excerpt: "Some financial planners continue to preach that long-term investing requires riding out the losses as well as the gains. Others are now telling clients to moderate their expectations -- work longer, cut spending, downgrade retirement dreams -- rather than crossing their fingers and hoping for bigger returns down the road."
(Washington Post; free registration required)

Statistical Trends in Retirement Plans (PDF)
36 pages. Excerpt: "Retirees may not have enough income from retirement plans alone to cover their financial needs during retirement, according to a report publicly released [Sept. 15] by the Treasury Inspector General for Tax Administration (TIGTA)."
(Treasury Inspector General for Tax Administration, U.S. Department of the Treasury)

Vanguard's Testimony on Lifetime Income Options for Retirement Plan Participants
Excerpt: "Vanguard Principal Steve Utkus . . . discussed participant concerns about lifetime income options, approaches to providing participants with information about generating lifetime income, and ways to help participants set up lifetime income streams."
(Vanguard Center for Retirement Research)

ASPPA Comments on Proposed Circular 230 Modifications
On September 16, 2010, ASPPA submitted a comment letter to the IRS with respect to proposed modifications to Circular 230, which governs the rules of practice before the IRS. In the letter, ASPPA recommends that Circular 230 be modified to provide that only a single individual be required to obtain (and potentially furnish) a Tax Preparer Identification Number ('PTIN') with respect to the preparation of Form 5500 and related schedules. (American Society of Pension Professionals and Actuaries

American Academy of Actuaries' Response to GASB's Preliminary Views (PDF)
24 pages. Excerpt: "The Academy's Pension Practice Council submitted comments to the Governmental Accounting Standards Board (GASB) in response to their Preliminary Views on Pension Accounting and Financial Reporting by Employers."
(American Academy of Actuaries)

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Benefits in General; Executive Compensation

New Series of Articles on Diversification in Private Companies with ESOPs
Noting that the diversification rules that apply to closely held companies with ESOPs tend to generate many questions from ESOP sponsors, Nancy Dittmer has started a new series of articles on the subject.
(National Center for Employee Ownership)

Webcasts and Conferences

What Plan Sponsors Can Do To Lower Prescription Costs
in Maryland on October 7, 2010
presented by Worldwide Employee Benefits Network (WEB) - Baltimore Chapter

Press Releases

ASPPA Asks IRS to Modify Circular 230
American Society of Pension Professionals & Actuaries (ASPPA)

TIGTA Releases Report on Statistical Trends in Retirement Plans
Treasury Inspector General for Tax Administration (TIGTA)

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