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Retirement Plans Newsletter

October 12, 2010

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A team of pension professionals stand behind our full suite of pension products: DC/DB Software, Plan Documents, EFAST2 5500 System, Compliance Testing & Daily Val. Everyone on ASC’s Support Team, including the lead software programmers, were retirement plan administrators or ERISA attorneys before joining ASC. Our products & support show we understand the challenges you face and what it takes to accurately and easily administer a plan on a timely basis. (800) 950-2082 x1; Click here to learn more about ASC.
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[Official Guidance]
Requirements for Tax Return Preparers Using the PTIN System: Frequently Asked Questions
Excerpt: "'How are enrolled retirement plan agents and enrolled actuaries affected by the recommendations? (posted 7/22/10) Enrolled retirement plan agents and enrolled actuaries must obtain a PTIN if they are compensated for preparing, or assisting in the preparation of, all or substantially all of a federal tax return or claim for refund. But they will be exempt from the competency test requirement if they only prepare returns within the limited practice areas of these groups."
(U.S. Internal Revenue Service)

[Guidance Overview]
In-Plan Conversions to Designated Roth Accounts (PDF)
2 pages. Excerpt: "[The Small Business Jobs and Credit Act of 2010] permits non-Roth amounts in 401(k), 403(b) and governmental 457(b) plans to be converted to Roth amounts within the same plan effective September 27, 2010 for 401(k) and 403(b) plans, and for tax years beginning after December 31, 2010, for governmental 457(b) plans."
(Transamerica Center for Retirement Studies)

[Guidance Overview]
First Circuit Rules That Elimination of Option to Transfer Profit-Sharing Plan Account Balance to Defined Benefit Plan Does Not Violate the Anti-Cutback Rule
Excerpt: "In analyzing the case, the Court noted that, under the anti-cutback rule: (1) the accrued benefit of a participant under a plan may not be decreased by an amendment of the plan (with nonapplicable exceptions) and (2) for purposes of (1), a plan amendment which has the effect of eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment, is treated as reducing accrued benefits."
(Stanley D. Baum of Fellheimer & Eichen LLP)

[Guidance Overview]
'Substantial Cessation of Operations': PBGC's Proposed Regulatory Changes Affect Pension Plans (PDF)
Excerpt: "The PBGC's proposed rule would require that a plan sponsor formally report any 'ERISA section 4062(e) event' . . . ."

[Guidance Overview]
Despite Questioning Fairness, 1st Circuit Rules Against Retiree Who Lost Benefits
Excerpt: "In his conclusion, [the senior judge] wrote that the case was a hard one to decide because 'it requires us to deny relief to a plaintiff for whom we have considerable sympathy.' Selya noted that Tasker worked for many years, planned for his retirement and discovered that his monthly annuity would be half what he expected. 'On general notions of fairness, the plaintiff deserves better.'"
(The National Law Journal)

[Guidance Overview]
Do Target Date Funds Miss the Target and Hit the Fiduciaries?
Excerpt: "To assist fiduciaries, [Cypen & Cypen provides] a list of relevant questions to be considered when offering target date funds as plan investment options . . . ."
(Cypen & Cypen)

New Fee Disclosure Rules for Retirement Plan Service Providers: What Financial Professionals Need to Know
17 pages. The white paper outlines: The new requirements regarding fee disclosure to plan sponsors for ERISA covered plans; The information financial professionals need to know about the regulation; and, Steps to consider taking in order to comply with the new disclosure requirements.
(Principal Financial Group)

Avoiding Five Common 401(k) Mistakes
Excerpt: "Here are five common 401(k) mistakes and [the] adjustments you can make to keep your retirement plans on track . . . ."
(The Wall Street Journal)

Financial Capability in the United States: Consumer Decision-Making and the Role of Social Security (PDF)
2 pages. Excerpt: "[The] analysis indicates which groups are most prone to poor financial decision-making and whether greater financial literacy enhances financial capability."
(University of Michigan Retirement Research Center)

Pension Finance Update, October 2010 (PDF)
4 pages. Excerpt: "[Aon Hewitt reviews market activity for the month of September 2010 and looks] at its impact on funded status for pension plans."
(Aon Hewitt)

DOL Reviews Reports of Advisers Exploiting Retirees
Excerpt: "The questions mostly focus on potential conflicts of interest when exiting workers seek advice on whether to transfer their 401(k) money into an IRA . . . ."
(Investment News; free registration required)

Raising the Bar: Pumping Up Retirement Savings (PDF)
12 pages. Excerpt: "A key finding in [the report] finds that DC plans with automatic enrollment and automatic contribution escalation can significantly boost participants' chances of meeting retirement income goals-but their success depends upon how these features are implemented and communicated by plan sponsors."
(Defined Contribution Institutional Investment Association)

Report Warns of Coming Wave of Municipal Pension Shortfalls
Excerpt: "The report calls the unfunded pension obligations 'off-the-balance-sheet debt' that threatens to starve services such as police protection, recreation centers, parks and libraries."
(The Washington Post; free registration required)

Error in Pennsylvania Pension Law Thwarts Pittsburgh Mayor's Plan
Excerpt: "The Legislature must correct an error in Act 44, last year's pension system overhaul, if Pittsburgh is to raise the parking tax next year as part of Mayor Luke Ravenstahl's proposed lease of parking facilities."
(Pittsburgh Post-Gazette)

Final Rule on Participant Fee Disclosure Expected This Month
Excerpt: "The participant fee disclosure rule is expected to be published in the Federal Register this month and will likely go into effect next October, experts said."
(Investment News; free registration required)

Payout Funds Transform Nest-Egg Accumulations Into a Stream of Retirement Income
Excerpt: "Although consumers have been slow to embrace managed-payout funds, the group's rationale, at least, seems solid. The funds are aimed at investors at the stage of life when the top priority is a flow of income available for spending rather than the accumulation of assets."
(The New York Times; free registration required)

Public Pension Funding in Practice
Excerpt: "This paper examines the current funding of state and local pensions using a sample of 126 plans, estimating an aggregate funded ratio in 2009 of 78 percent. Projections for 2010-2013 suggest that some continued deterioration is likely."
(National Bureau of Economic Research: paid subscription or individual purchase required to retrieve fulltext)

ASPPA Request for Relief for the 2009 Form 5500 Filing Process for 403(b) plans
5 pages. The reason for the request relates problems that have been uncovered as the data collection process for the 2009 plan year has unfolded.
(American Society of Pension Professionals & Actuaries)

Whether you're working towards an ASPPA credential or just looking to expand your knowledge in specific topical areas, ASPPA's exams are great ways to expand your knowledge while earning valuable CPE credits (valid for ASPPA, JBEA and ERPA requirements)! The proctored exam window is open from November 1 to December 16 but it's important to register early and have time to prepare.

Registration ends October 29. For more information, visit ASPPA's exam site

Sponsored by ASPPA

Benefits in General; Executive Compensation

[Guidance Overview]
The ERISA Litigation Newsletter, October 2010
This edition focuses on a recent ruling: 'Tenth Circuit Permits Discovery of Dual Role Conflict of Interest Issues in ERISA Benefit Claims, But with Limitations;' it also covers other Rulings, Filings and Settlements of Interest.
(Proskauer Rose LLP)

[Guidance Overview]
Taxation of Employer-Provided Cell Phones: Heightened Substantiation No Longer Required
Excerpt: "With the deletion of cell phones from 'listed property,' the ability to exclude the benefit from employees' taxable income has become less burdensome."
(Deloitte via

Milliman's Monthly Benefit News and Developments, October 2010 (PDF)
2 pages. The newsletter provides a summary of the previous month's legislative, regulatory, and judicial information on employee benefits and upcoming key dates.

Webcasts and Conferences

ERISA Litigation Update
in California on October 21, 2010
presented by Western Pension & Benefits Conference - Orange County Chapter

Press Releases

Newly Posted Employee Benefits Jobs

Education Coordinator
for Transamerica Retirement Services
in IL

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