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Retirement Plans Newsletter

October 8, 2010

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DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA'06 Pension Funding.
* Funding Target and Target Normal Cost with 3-rate segments
* 404(o) Cushion; 430 minimum and 404(o) maximum contributions
* Funding Target Attainment Percentages (FTAPs)
Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. or call 1-888-328-2474

[Guidance Overview]
In-Plan Roth Conversions
4 pages. Excerpt: "There are several steps for employers to take in relation to the new in-plan Roth conversion option. The . . . . checklist aims to help employers with those steps . . . ."
(Utz, Miller & Eickman, LLC)

[Guidance Overview]
Inter-Plan Asset Transfer Elimination Upheld
Excerpt: "[A Federal Court] contended that shipper DHL Holdings had not violated [an ERISA] anti-cutback mandate with the late-2004 rule change and upheld the lower court holding on the basis that the change was permitted under [a Treasury Department regulation] even if it diminished an accrued benefit."

[Guidance Overview]
Morgan Stanley Cleared of Fiduciary Breach over Mortgage-Backed Securities Holdings
Excerpt: "[A District Judge] said the complaint by Saint Vincent Catholic Medical Centers and Queensbrook Insurance Limited sets forth no facts that evidence a claim that Morgan Stanley breached its duty of prudence to Saint Vincent. It contains no allegations of inadequacy of Morgan Stanley's investigation of the merits of its investments."

Do Risk Disclosures Affect Investment Choice?
Excerpt: "The aim of this study was to understand the potential effects of different information disclosures regarding risk on retirement investing behavior."
(Social Science Research Network)

Full Committee Hearing: The Wobbly Stool: Retirement (In)security in America
The page has links to a video of the hearing and to the text of witness statements.
(U.S Senate Committee on Health, Education, Labor and Pensions)

EBSA Testimony on Retirement Security Issues Before U.S. Senate Committee on Health, Education, Labor and Pensions
Excerpt: "The Department believes it is important to educate participants about saving for a secure retirement and has a dedicated education campaign that uses publications, online tools, videos, public service announcements, and outreach as methods to provide the information to both workers and employers."
(U.S. Employee Benefits Security Administration)

Auto-Enrollment Benefits Young Savers, According to Financial Engines
Excerpt: "About 52 percent of workers under age 30 eligible to automatically enroll in an investment option through their employer have the appropriate risk and diversification for their age to put them on a better track for retirement, compared with 12 percent of employees in that age group without access to such a feature, according to the study . . . ."
(Bloomberg Businessweek)

Defined Contribution Plan Participants Say They Are Confused by Their Retirement Plans and Would Welcome Financial Advice
Excerpt: "Experts offer some advice on how to engage workers to take action to positively impact their retirement savings."
(Human Resource Executive Online)

Working Retirees 'The New Normal,' According to Study, 'Working In Retirement: A 21st Century Phenomenon'
Excerpt: "A new study finds one in five workers age 50 or above has retired from his old employment and moved into a new paying position, which researchers dub a 'retirement job.'"

What Every Plan Sponsor Must Know About Bonds - Before They Crash!
Excerpt: "Bonds, like stocks, come in a variety of flavors. Ben Graham referred to some bonds as 'risk-free' alternatives to stocks; thus, permitting investors to achieve different objectives with each class of securities."
(Fiduciary News)

A Team of Researchers Is Rethinking the Basis for Calculating Pensions
Excerpt: "The Boston College Center for Retirement Research has] issued a timely and insightful report on pension finances; they have taken on the issue of pension spiking and the broader issue of how we calculate lifetime defined-benefit pensions in the first place. . . . This column focuses on one important feature of the CRR report: The mathematical defect of a defined benefit system that bases the pension on late-career earnings."

On Comparing the Safety of Stocks and Bonds
Excerpt: "As early as 1997, even the Wall Street Journal began to question the Old Rule of Bond Investing. The article made a point long held by experienced investors - investing for purely social reasons does not generally produce pleasant investment results."
(Fiduciary News)

Does Anyone Care About the Financial Security of American Workers in Retirement? (PDF)
10 pages. Excerpt: "Other than solvency of the Social Security program, [policymakers] focus clearly appears to be on improving retirement savings rates."
(Aon Hewitt)

New York's Pension Scandal
Excerpt: "Alan Hevesi, the former comptroller, has provided the best argument to stop giving one person the power to invest New York State's $125 bil.lion pension fund."
(The New York Times; free registration required)

New rules from the IRS require paid tax preparers to obtain a PTIN, as well as either meet broad competency requirements or become an Enrolled Retirement Plan Agent (ERPA). We can help you become an ERPA with our incredible tools, practice exams and study aids. Register now and order your materials. The exam window is January 6-February 17, 2011!

For more information and study aids, visit AIRE, LLC. To register for the exam, visit ERPA Exam

Sponsored by AIRE, LLC

Benefits in General; Executive Compensation

Large Employers Planning Summary Plan Description Updates Are Unsure of Costs
Excerpt: "The 2010 survey, which included responses from Fortune 1000 companies, noted that the biggest change expected in the next few years is updating SPDs for plan design and health care reform changes, with 71% of respondents expecting to do so within the next year."
(Wolters Kluwer)

Boomers' Shrunken 401(k)s Spark Interest in Reverse Mortgages
Excerpt: "Ten years ago, reverse mortgages were primarily used by widowed or single women well into their 70s with little other means of retirement income. Now, big losses to retirement savings as a result of the financial crisis have stoked interest among younger retirees of both sexes."

California Faces $379 Bil.lion Retirement Liability, According to Study
Excerpt: "A new study released by the Foundation for Educational Choice and the Pacific Research Institute estimates California's unfunded liability for state (CalPERS and CalSTRS) pensions and retiree health care at $379 bil.lion."
(The Reason Foundation)

S.&P. Says Cost to Care for World's Elderly Will Spiral
Excerpt: "Credit analysts at Standard & Poor's said on Thursday that the cost of caring for the world's aging populations would be 'on an explosive path' and could swamp the budgets of many countries in the next 40 years unless governments accelerated belt-tightening efforts that are already proving highly unpopular."
(The New York Times; free registration required)

One Man's Story About the Origins of ERISA
Interview with Jeffrey Mamorsky. Excerpt: "Do you know who came up with the name 'Employee Retirement Income Security Act'? That's quite a mouthful and I was curious as to its origin."

Webcasts and Conferences

"ERISA Workshop" - Boston
in Massachusetts on November 5, 2010
presented by SunGard Relius

"ERISA Workshop" - New Orleans
in Louisiana on November 4, 2010
presented by SunGard Relius

"ERISA Workshop" - Philadelphia
in Pennsylvania on November 4, 2010
presented by SunGard Relius

"ERISA Workshop" - Seattle
in Washington on November 4, 2010
presented by SunGard Relius

"QDROs - From Confrontation to Clarity" Web Seminar
Nationwide on November 16, 2010
presented by SunGard Relius

"The Ins and Outs of Multiple Employer Plans" Web Seminar
Nationwide on November 3, 2010
presented by SunGard Relius

"To Roth or Not To Roth" Web Seminar
Nationwide on October 13, 2010
presented by SunGard Relius

Press Releases

ASPPA Urges IRS to Clarify Circular 230 Requirements
American Society of Pension Professionals & Actuaries (ASPPA)

Newly Posted Employee Benefits Jobs

Compliance Specialist (Form 5500)
for ERISA Pros
in GA

Retirement Plan Administrator
for Qualified Plans, LLC
in GA

Defined Contribution Pension Plan Administrator
for The Angell Pension Group, Inc.

Retirement Services Consultant
for Administaff
in TX

Benefits Analyst
for Broadridge Financial Solutions
in NJ

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