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Retirement Plans Newsletter

October 4, 2010

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[Guidance Overview]
Roth Conversions Inside Savings Plans: Option Now Available (PDF)
3 pages. Excerpt: "[T]he statute is effective for distributions made after the date of enactment."
(Vedder Price P.C.)

[Guidance Overview]
Small Business Jobs Act Permits Roth Conversions and Expands Tax Credits and Deductions for Certain Health and Fringe Benefits
Excerpt: "EBIA Comment: The timing of the legislation presents administrative challenges for implementing Roth conversions for 2010. IRS guidance may address some of these issues . . . ."
(Employee Benefits Institute of America)

An Explanation of the Changes in Pension Guarantees
Excerpt: "[ERISA] created the Pension Benefit Guaranty Corp., a sort of insurance company where every employer offering defined benefit plans paid a per-participant premium, accumulating reserves to cover employees of companies that closed without enough money to fill pension promises.' . . . Now you have a shrinking pool of defined benefit plans, which means a shrinking pool of money going into the Pension Benefit Guaranty Corporation . . . ."

Annuities Could Get Boost from Small Business Legislation
Excerpt: "The legislation includes a provision that allows holders of non-qualified annuities to carve out some of the funds from a deferred annuity and buy an immediate annuity contract with those proceeds."
(Employee Benefit News; free registration required)

The Impact of a DROP Program on the Age of Retirement and Employer Pension Costs (PDF)
47 pages. Excerpt: "This paper investigates the impact of a Deferred Retirement Option Plan (DROP) on the age of retirement of employees covered by defined benefit pension plans provided by the City of Philadelphia."
(Center for Retirement Research at Boston College)

Understanding Your Summary Plan Description Requirements
Excerpt: "Under the Employee Retirement Security Act . . ., all employers of covered employee benefit plans are required to [maintain Summary Plan Descriptions and to distribute them to] participants."
(Management Skills)

Not All 401(k)s Are Created Equal
Excerpt: "The differences between a good and mediocre plan - which might seem minor but add up over a 40-year career - can determine whether you'll enjoy comfy golden years or be forced to work longer to build an adequate nest egg."
(The Sacramento Bee)

The Most Popular Funds in the 401(k) Market
Excerpt: "The American Funds Growth Fund of America (AGTHX), Pacific Investment Management Co. LLC's Total Return Fund (PTTAX) and American Funds' EuroPacific Growth Fund (AEPGX) are the three most popular mutual funds in the 401(k) market, according to research being released today."
(Investment News; free registration required)

Video: Managing the Crisis in Public Pensions
Excerpt: "The future fiscal stability of states is inextricably intertwined with the retirement security of public employees. This panel addresses what steps policy makers must consider, and what pitfalls to avoid on the road to reform."
(Mercatus Center at George Mason University)

Video: Public-Pension Deficits: How Big? Can They Ever Be Paid?
Excerpt: "As the Governmental Accounting Standards Board reviews public-pension accounting, what should it focus on? What are the possible consequences of these changes? At this event, a panel of retirement experts and public policy economists will address the growing threats to the pension liabilities of states and municipalities."
(American Enterprise Institute for Public Policy Research)

Pensions Become a Heated Issue in 2010 Politics
Excerpt: "The movement to rein in public employee retirement benefits has spread to the fall campaign, with candidates for governor, treasurer and state legislatures split over the best way to manage spiraling costs that threaten the financial condition of public pension systems in nearly every state."
(The Pew Charitable Trusts)

Video / Commentary: Early Withdrawal from Retirement Accounts
This is a look at the different types of retirement savings accounts, who owns them, why people withdrawal from them prematurely, and what the government is and should be doing to encourage more retirement savings.
(Urban Institute)

SEC and DOL Convergence: Are You Ready? (PDF)
3 pages. Excerpt: "These regulatory agencies have undertaken major initiatives with regard to fiduciary activity, plan investments, compensation, sales practices, and disclosure of services, compensation, and conflicts."
(Reish & Reicher)

South Dakota State's Retirement Plan Experience Shows Power of Automatic Enrollment to Dramatically Increase Participation (PDF)
14 pages. Excerpt: "A study of South Dakota's Supplemental Retirement Plan . . . has found that instituting automatic enrollment programs results in a staggering leap in participation rates. . . . Ninety-one percent of new, eligible employees are participating in the SRP in units that adopted automatic enrollment, versus 1 percent of new hires in units without automatic enrollment."
(Retirement Made Simpler)

California Governor Says No to Pension Caps
Excerpt: "California Governor Arnold Schwarzenegger has vetoed a measure barring employment contracts with automatic pay raises and legislation that would cap pensions. . . . According to the Sacramento Bee, Schwarzenegger said in a veto message that the bills do not provide real pension reform."

LIMRA Finds Defined Contribution Participants Want Automatic Escalation
Excerpt: "[T]he online poll from LIMRA found 45% would want their contributions to be automatically increased by 2% or more every year. This was especially true among those who earn $75,000 or more in annual household income, according to a LIMRA press release."

Second Retirement Services Trade Group Calls for 5500 Deadline Extension for the 2009 Plan Year
Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA), in a letter addressed to both the DOL and the Internal Revenue Service . . ., claimed the October 15 filing deadline extension under the DOL's EFAST2 electronic filing system should be postponed until December 31, 2010."

Oregon's Public Pension Performance in Past Decade Has Been Stellar, But Can They Maintain It in Years to Come?
Excerpt: "The state's public employee pension system faces new financial challenges. Local governments are suffering under the burden of its costs. While there's still a good case that the 2003 reforms were a success, it says a lot about the state of public employee pensions that even successful moves to limit costs are followed by years of painful choices and highly charged political debates."

Digesting Recent Stock-Drop Analyses: A Possible Alternative to the Moench-ies
Excerpt: "With all the cases and articles swirling around the question of when there is a fiduciary duty to stop acquiring or to dispose of employer securities, and the recent oral arguments on the point before the Second Circuit, I'd like to set out a possible analytical framework . . . ."
(Pension & Benefits Blog)

ASPPA Comments to DOL/IRS Requesting Extension for Filing the 2009 Form 5500 Series Reports
5 pages. Excerpt: "Specifically, we ask that the deadline be extended until December 31, 2010."
(American Society of Pension Professionals & Actuaries)

Council/NCCMP Letter to Treasury/IRS Regarding Partial Annuitization Issue (PDF)
5 pages. Excerpt: "This issue relates directly to concerns about the fact that so few participants elect an annuity under a defined benefit plan when a lump sum distribution is available."
(American Benefits Council)

The Source, Second Edition by Kristi Cook, JD and Ellie Lowder, includes the final 403(b) regulations, their impact and practical suggestions on how plan sponsors can manage their 403(b) program in compliance with applicable IRS requirements and deadlines. It also covers all aspects of ERISA and non-ERISA retirement plans for public education and tax-exempt 501(c)3 employers and includes comprehensive technical information with explanations and citations of relevant Code Sections.

Required reading for ASPPA's TGPC credential! Order yours today!

Sponsored by ASPPA

Benefits in General; Executive Compensation

Aon Completes Acquisition of Hewitt
Excerpt: "Aon Corp. on Friday completed its acquisition of Hewitt Associates Inc., a record deal that will significantly boost Aon's resources as a benefit consulting and outsourcing provider."
(Business Insurance)

Webcasts and Conferences

"PTIN and Me: New Rules; New Duties; New Questions" Web Seminar
Nationwide on October 26, 2010
presented by SunGard Relius

Press Releases

Lemoyne Business Owner Sentenced In Federal Court Today For Embezzlement
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Employee Benefits Jobs

Conversion Specialist - Defined Contribution Plans
for ASPire Financial Services
in FL

Relationship Manager - Defined Contribution Plans
for ASPire Financial Services
in FL

Head of Compliance Services- IRC25090
for Lincoln Financial Group

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