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Retirement Plans Newsletter

September 27, 2010

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[Official Guidance]
Technical Explanation of Tax Provisions in Senate Amendment 4594 to H.R. 5297, The 'Small Business Jobs Act of 2010,' Scheduled for Consideration by Senate on September 16, 2010
See pages 37-38 for 457 plan Roth contributions and rollovers from elective deferral plans to Roth designated accounts.
(U.S. Congress. Joint Committee on Taxation)

[Guidance Overview]
Plan Loans to be Reported as Notes Receivable
Excerpt: "The Financial Accounting Standards Board (FASB) has unanimously approved its position on how participant loans should be reported on defined contribution plan financial statements."

Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 9/24/10
Excerpt: "Each Monday, [Fiduciary News gives] you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks."
(Fiduciary News)

Collective Trusts: When Are They Appropriate?
Excerpt: "According to Vanguard Principal Gerry Mullane, collective trusts can make sense for some of the largest DC plans, but may provide little or no advantage for most."
(The Vanguard Group, Inc.)

Retirement Plan Distribution Options in the U.S.
Excerpt: "[Mercer reviews] the current US regulatory environment related to retirement distributions as well as to in-service distributions (which also affect retirement outcomes) [and then explores] how plan sponsors can work within the current framework to create better participant outcomes in retirement."
(Mercer LLC)

Spend Down: Post-Retirement Strategies Around the Globe
Excerpt: "In this issue, [Mercer focuses] on post-retirement spend-down strategies around the globe. This segment of retirement planning is experiencing a wave of innovations, as governments, providers, social partners and plan sponsors scramble to meet the needs of the first cohort of retirees who will rely primarily on defined contribution (DC) plans for retirement income."
(Mercer LLC)

The Illusion of Pension Savings
Excerpt: "Earlier this year, Illinois said it had found a way to save billions of dollars. It would slash the pensions of workers it had not yet hired. The real-world savings would not materialize for decades, of course, but thanks to an actuarial trick, the state could start counting the savings this year and use it to help balance its budget."
(The New York Times; free registration required)

Roth Provisions in the Small Business Jobs Act of 2010 (PDF)
11 pages. This review in Q&A format covers two provisions affecting Roth accounts within retirement plans.
(American Benefits Council)

The 401(k) Match's Big Role in Retirement Security
Excerpt: "401(k) matches vary considerably from company to company and can be increased, reduced, or eliminated at any time. Waiting periods before you can join the plan, vesting schedules that may prohibit you from keeping the match if you don't stay with the company for several years, and, of course, investment options and performance all play a role in how prepared you will be for retirement."
(U.S. News & World Report)

Is a Roth 401(k) Right for You?
Excerpt: "Another benefit to the Roth 401(k): If upon leaving your company you roll your account balance over to a Roth IRA, you won't be subject to a requirement that you begin tapping the account after reaching age 70 and 1/2. Without mandatory distributions, the money in a Roth IRA can grow tax-free for a longer period. If you leave these accounts to heirs, they also won't owe income tax on the withdrawals."
(The Wall Street Journal)

U.S. MAP: State Pension Systems Are Feeling the Heat
The map shows the percentage that state pension plans were funded in 2009.
(Bloomberg Businessweek)

The Question of Annuities for Retirement Income
Excerpt: "There's a lot to be said about annuities. They're the focus of a great deal of attention in D.C. these days. And the amount of confusion that exists among consumers, policymakers, and even 'experts' surrounding annuities and 'lifetime income' is staggering. We won't try to clear all of it up here, but we do have some thoughts to share."
(The Vanguard Group, Inc.)

Do You Trust Congress with Your Thrift Savings Plan Investment?
Excerpt: "[Congress] has already started meddling with the TSP and, as the money pot grows, that meddling is likely to increase. For example, changing the TSP was used as a rationale for funding a new law on tobacco regulation."
(FedSmith Inc.)

A Time to Discuss Retirement Policy
Excerpt: "The retirement crisis should provoke study, analysis and discussion of the changes necessary to improve the mix of Social Security, employer-based retirement plans and individual saving."
(Investment News; free registration required)

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Benefits in General; Executive Compensation

[Guidance Overview]
What Your Board Should Know About Proxy Access (PDF)
6 pages.
(Sutherland Asbill & Brennan LLP)

Webcasts and Conferences

Health Care Reform Amendments for Cafeteria, HRA and Wrap Plans Free Webinar
Nationwide on September 28, 2010
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Press Releases

Newly Posted Employee Benefits Jobs

Pension Fund Manager
for Third Party Administrator seeks DB Pension Fund Manager
in NY

Senior Administrator
for Mercer Advisors
in AZ

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