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Retirement Plans Newsletter

October 1, 2010

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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

[Guidance Overview]
New Law Allows the Taxable Transfer of Pre-Tax Money to a Plan Roth Account
Excerpt: "Plans must have a qualified Roth contribution program (i.e, an option allowing participants to direct some or all of their elective deferrals into a Roth account) in order to allow participants to transfer pre-tax money already in the plan into a Roth account.'
(Holland & Hart LLP)

[Guidance Overview]
Significant Stock-Drop Decision Adopts 'Presumption of Prudence'
Excerpt: "Following what has been labeled as the 'Moench' presumption, the Ninth Circuit joined with the U.S. Courts of Appeals for the Third, Fifth, and Sixth Circuits, which have all applied the presumption in cases where employers who offered employer stock in their defined contribution plans were sued by plan participants after the value of the employer stock sharply decreased."
(Bailey & Ehrenberg PLLC)

[Guidance Overview]
Presentation Slides: Multiemployer Pension Plan Briefing (PDF)
28 pages. The presentation covers recent FASB exposure drafts, funding relief, and the potential impact of the PPA sunset provisions. [Courtesy of The Segal Company and Venable LLP]
(American Benefits Council)

[Guidance Overview]
Tips for Navigating ERISA Compliance (PDF)
10 pages. "This article provides an overview of fiduciary status under ERISA, examines each of the DOL's proposed regulations and their anticipated consequences for advisers and their firms, and concludes by setting forth potential solutions designed to assist firms in determining the most effective course to stay afloat."
(Pension Protection Act and Fiduciary Adviser Legal Resource Center)

[Guidance Overview]
Two New Rules for Employee Retirement Plans Included in Small Business Jobs Act of 2010
Excerpt: "Section 2112 of the Act provides a new option in connection with Roth conversions. Previously, a participant could not 'convert' qualified plan funds into a Roth account within the same plan (or any other employer-sponsored plan). Rather, a rollover was required to be made to a Roth IRA."
(Foley & Lardner LLP)

Pre-Retiree Investors Pessimistic Over Retirement, According to Study
Excerpt: "A study from The Hartford Financial Services Group has found that many pre-retirees have 'no idea' when they will be able to retire (28.3% for ages 60-69 and 33.3% for those age 70 and older) and 36% of those ages 60-69 say they are postponing retirement for up to two years or more."
(Financial Planning)

Key Highlights of the 2010 NAGDCA Conference (PDF)
7 pages. Excerpt: "The annual NAGDCA conference provides an opportunity to learn from key Washington personnel what is happening on the legislative, regulatory and IRS audit front and to also hear from peers about their best practices."
(National Association of Government Defined Contribution Administrators via 403bwise.com)

Grand Jury Report:: 'San Francisco's Pension Tsunami: The Billion-Dollar Bubble'
31 pages. Excerpt: "The purpose of this report is to alert public officials and citizens that fundamental adjustments must be made to the City's employee pension plan."
(2009-2010 Civil Grand Jury, City and County of San Francisco)

Senate Panel Moves to Strengthen Federal Protective Service
Excerpt: "The bill, which passed on a unanimous voice vote, would grant FPS officers retirement benefits similar to other federal law enforcement personnel."
(The Washington Post; free registration required)

BP Asks Judges to Send Worker Cases on Savings Plan Losses to Texas Court
Excerpt: "The employees previously asked that the suits be combined in Chicago, where the retirement plan is administered. BP today told a panel of federal judges meeting in Nashville, Tennessee, that the cases belong in Houston because the claims are similar to those in other investor suits."
(Bloomberg L.P.)

[Opinion]
401(k) In-Plan Roth Conversions: Too Late for 2010?
Excerpt: "The provision is not all that we hoped for, [it is] complex and [it is] late. We wanted legislation passed early in the year to permit participants to convert any funds held in a plan just by changing their tax related designation in the plan."
(Profit Sharing / 401k Council of America)




Pension Benefit Information introduces a New Platinum Web-based Death Audit Service that features Continuous Monitoring of your plan population to Eliminate Pension Overpayments & Decease Funding Liabilities. This service provides 24/7 access to our Proprietary Death Information, the ability to add records at No Additional Charge, and tools to manage workflow from the time a death is reported until Payment is Stopped!

For more information, please contact 415-482-9611 or inquiry@pbinfo.com.


Benefits in General; Executive Compensation

[Guidance Overview]
Sixth Circuit Rules Union's Release of Claims Is Valid: Plaintiffs' Claim for Severance Pay Is Denied
Excerpt: "The issue was whether the Release barred the plaintiffs' ERISA claim for severance pay. The plaintiffs first argued that a union may not waive ERISA claims as a matter of law. However, the Court would not entertain this argument, because it was not raised in the district court. The plaintiffs next argued that the Release did not clearly state whether it binds only the Union, or both the Union and its members."
(Stanley D. Baum of Fellheimer & Eichen LLP)

[Guidance Overview]
Per Diem Travel Rates Updated by IRS Revenue Procedure 2010-39
Excerpt: "The revenue procedure supersedes Revenue Procedure 2009-47, issued Sept. 30, 2009, and is generally effective for amounts paid or expenses paid or incurred on or after Oct. 1, 2010."
(American Institute of Certified Public Accountants)

The 2010 Top 250 Report on Long-Term Incentive Grant Practices for Executives (PDF)
30 pages. Excerpt: "The details underlining [the] findings are presented, along with additional analysis and information . . . ."
(Frederic W. Cook & Co., Inc.)

Policy on Preventing Caregiver Bias in the Workplace
Excerpt: "The Center for WorkLife Law at the University of California Hastings College of Law has created a model policy [at http://www.hreonline.com/pdfs/10022010Extra_ModelPolicy.pdf] for organizations to prevent discrimination against workers with family responsibilities."
(Human Resource Executive Online)

Unfair Treatment of Workers with Family Responsibilities Can Lead to Costly Lawsuits and Disgruntled Workforce
Excerpt: "By many accounts, family responsibility discrimination first hit the court system in 1971 when the Supreme Court ruled, in Phillips vs. Martin Marietta Corp., that it was unlawful for the Raleigh, N.C.-based construction-aggregates provider to refuse to accept job applications from mothers with preschool-aged children while employing men with children of the same age."
(Human Resource Executive Online)

Employee Benefits Developments, September 2010
A brief look at developments in Employee Benefits law from August and September 2010, including cases, rulings, and opinions.
(Hodgson Russ LLP)

The Coming Third Trillion-Dollar Bailout: A Report on the States
Excerpt: "Her study rates the financial condition of the country's largest states. Only two of them received positive ratings: Texas and Virginia. Five of the 15 received negative ratings, including California, Ohio, New Jersey, Michigan, and Illinois. Taken all together, the 46 states with budget shortfalls have budget gaps approaching $200 billion, or more than a quarter of their outlays. There are two dangers in these numbers, she says: First, municipalities could start defaulting on their bonds."
(The New American Magazine)

Demystifying the Law: ERISA
Excerpt: "If you're employed, are recently unemployed or are receiving regular medical treatment, then ERISA, or the Employee Retirement Income Security Act of 1974, governs any health and pension benefits you receive from your employer, your COBRA health insurance coverage if you're unemployed and even the privacy of your medical records. This article will help you better understand your rights under ERISA."
(Lawyers.com)

Employee Ownership Update for September 30, 2010
NCEO Executive Director Corey Rosen discusses the following: New data from the NCEO show that ESOP companies have an exceptionally low rate of defaults on their acquisition loans. The recently signed Small Business Jobs Act temporarily shortens the holding period of assets subject to the built-in gains tax upon conversion from C to S status to 5 years if the 5th taxable year in the holding period precedes the taxable year beginning in 2011. ISS sets recommended standards for equity burn rates.
(National Center for Employee Ownership)

[Opinion]
Bankrupt, USA: Why Our Cities Aren't Too Big to Fail
Excerpt: "As Richard Bookstaber, the senior policy advisor at the Securities and Exchange Commission wrote in a blog post this April, the municipal market is massive, leveraged and opaque, blessed by questionable analyst ratings and backed by revenues already mortgaged off to someone else. In other words, it bears all the hallmarks of a crisis in waiting."
(Cable News Network)


Press Releases

PSCA Announces the 2010 Signature Award Winners
Profit Sharing/401(k) Council of America (PSCA)

The Sources of Income of Elderly Men and Women (Age 65 and Older)
Employee Benefit Research Institute (EBRI)

ASPPA Urges DOL to Issue Form 5500 Extension
American Society of Pension Professionals & Actuaries (ASPPA)


Newly Posted Employee Benefits Jobs

Secretary/Administrative Assistant
for Jennings Law Firm, Ltd. / Dana Consulting Group, Ltd.
in IL

Producer & Vendor Relationship Manager
for AUL/OneAmerica Financial Partners, Inc. /RE Moulton
in ANY STATE

Fund Administrator
for Segal
in CA




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