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Retirement Plans Newsletter

October 20, 2010

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SunGard offers these sessions on fee disclosures:
Participant Fee Disclosure Ė The Third Time Is the Charm Ė This Nov. 3 Web seminar provides details on the new participant fee disclosure regulations. This seminar also repeats on Nov. 16.
ERISA Workshop Ė Hosted in 24 cities, this full-day seminar focuses on the service provider fee disclosure regulations, forfeitures, in-plan Roth rollovers, and other current need-to-know topics.
Read more about our programs here.
Sponsored by SunGard

[Official Guidance]
PBGC Extends Comment Period for Proposed Regs on Liability Arising from Substantial Cessation of Operations (PDF)
2 pages. Excerpt: "Summary: PBGC is extending to November 12, 2010, the comment period on its proposed rule to provide guidance on the applicability and enforcement of ERISA section 4062(e), which provides for reporting of and liability for certain substantial cessations of operations by employers that maintain single-employer plans.'
(Pension Benefit Guaranty Corporation)

[Official Guidance]
Text of Final Rules on Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans (PDF)
38 pages; this is the typeset Federal Register version. The effective date is December 20, 2010.
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
DOL's Final Rule on Fee Disclosure to Participants for Plans with Participant-Directed Investment
Excerpt: "[F]or calendar year plans, compliance will be required beginning on January 1, 2012."
(PricewaterhouseCoopers LLP)

[Guidance Overview]
Court Decision Has Potential Implications for Retirement Plan Fiduciaries (PDF)
1 page. Excerpt: "[P]lan fiduciaries should be forewarned about the risks of offering higher-expense mutual funds with revenue sharing when less expensive fund classes may also be available. The lessons of this case may very well determine how investment committee decisions are made going forward."
(Employee Benefit Solutions)

[Guidance Overview]
Impact of the 408(b)(2) Regulation on ERISA 403(b) Plans
Excerpt: "For 403(b) service providers that do not regularly deal with ERISA plans, the regulation may require a significant degree of change in how they do business. And even for those that have a regular ERISA clientele, it will have an impact, especially for producers who have not previously established a practice of describing their services and compensation in writing."
(National Tax Sheltered Accounts Association via American Society of Pension Professionals & Actuaries)

Asset Cycles and the Retirement Decisions of Older Workers
Excerpt: "To determine how asset values of older workers affect their future retirement decisions, it is important to take into account how asset values change over asset cycles."
(Center for Retirement Research at Boston College)

Investment Committees: More Than the Sum of the Parts (PDF)
17 pages. Excerpt: "This white paper discusses the potential pitfalls and biases of group behavior that can affect investment committees and explore how a committee can make the best use of its collective knowledge and diversity of experience."
(Arnerich Massena, Inc.)

Raising Employee Contributions Not the Solution to California's Pension Funding Crisis
Excerpt: "The report put out by the economic think tank The Milken Institute projects that, if no corrective actions are taken, the combined liability of the three major state pension funds . . . will be more than 5.5 times as large as total state tax revenue around 2012-2013."
(PLANSPONSOR.com)

PBGC 2011 Maximums Flat Compared to 2010
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) announced that the maximum annual insurance benefit for participants in underfunded pension plans terminating next year will be $54,000 for those who retire at age 65 — the same as in 2010."
(PLANSPONSOR.com)

Survey Finds Misperceptions Regarding Asset Allocation and Retirement Readiness
Excerpt: "Fifty-four percent of respondents said they are more concerned than ever about being able to retire as planned and 45% agree or strongly agree with the statement that 'since the downturn, I've lowered my expectations about what life will be like in retirement.'"
(PLANSPONSOR.com)

Policy Options for State Pension Systems and Their Impact on Plan Liabilities
Excerpt: "We calculate the present value of state pension liabilities under existing policies, and separately under policy changes that would affect pension payouts including cost of living adjustments . . ., retirement ages, and buyout schedules for early retirement."
(National Bureau of Economic Research: paid subscription or individual purchase required to retrieve fulltext)

Portfolio Allocation for Public Pension Funds
Excerpt: "This paper presents a dynamic model of a public pension fund's choice of portfolio risk. Optimal portfolio allocations are derived when pension fund management maximize the utility of wealth of a representative taxpayer or when pension fund management maximize their own utility of compensation."
(National Bureau of Economic Research: paid subscription or individual purchase required to retrieve fulltext)

Retirement Savings Shortfalls for Today's Workers (PDF)
Pages 2-9 of 16 pages. Excerpt: "Using its unique Retirement Security Projection Model, EBRI can estimate the total national aggregate and individual retirement deficits at age 65 for Early Boomers (born between 1948-1954, now ages 56-62), Late Boomers (born between 1955-1964, now ages 46-55), and Generation Xers (born between 1965-1974, now ages 36-45). This article reports these 2010 Retirement Savings Shortfalls . . . ."
(Employee Benefit Research Institute)

[Opinion]
ICI Requests Guidance on In-Plan Roth Conversions (PDF)
7 pages. Excerpt: "[The ICI letter presents] a list of issues on which guidance is needed and a recommendation on how they can be addressed to facilitate adoption and use of in-plan Roth conversion features and reduce unnecessary administrative expenses."
(Investment Company Institute)

[Opinion]
Four Forces Reshaping 401(k) Plans
Excerpt: "Steve Utkus [and John Ameriks, both of Vanguard,] share their ideas about four forces shaping the future of DC plans: Savings adequacy. Portfolio diversification, including the role of target-date funds (TDFs). Fee transparency and the focus on indexing. Retirement income."
(The Vanguard Group, Inc.)

[Opinion]
Do Plan Participants Now Have Less of an Affinity for Company Stock?
Excerpt: "Among plans offering company stock, the number of participants holding a concentrated position (more than 20% of their account balance) fell from 42% in 2005 to 30% in 2009, according to How America Saves 2010, our annual report on Vanguard-recordkept DC plan data."
(The Vanguard Group, Inc.)




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

[Official Guidance]
Text of Notice of Meeting of Advisory Council on Employee Welfare and Pension Benefit Plans (PDF)
2 pages. Excerpt: "[T]he 154th open meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans will be held on November 3-4, 2010."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
Ninth Circuit Holds That Top Hat Plan of Insolvent Employer Could Not Distribute Its Funds to Participants
Excerpt: "In accordance with the parties' express intent to create an unfunded top hat plan, Article 10.6's prohibition on distributing the Plan's assets when the employer is insolvent must be interpreted to apply even in the event of plan termination. Thus, the Court held that the Plan could not distribute its funds, if the employer was in fact insolvent."
(Stanley D. Baum of Fellheimer & Eichen LLP)

Companies Should Consider Early Bonus Payments
Excerpt: "Many companies are considering paying bonuses that normally would be paid in early 2011 by December 31, 2010 to ensure that employees receive the benefit of the current, lower tax rates."
(Vorys, Sater, Seymour and Pease LLP)

Employee Benefits Update, October 2010 (PDF)
The six-page newsletter presents select compliance deadlines and reminders; retirement plan developments; and, health and welfare plan developments.
(Reinhart Boerner Van Deuren s.c.)


Webcasts and Conferences

Retirement Plan Connections
Nationwide on December 7, 2010
presented by Pensions & Investments

U.S. Department of Laborís ERISA Advisory Council Meeting
in District of Columbia on November 3, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)


Press Releases

PBGC Takes Responsibility for Chardon Rubber Co. Pension Plan
Pension Benefit Guaranty Corporation (PBGC)

U.S. Department of Laborís ERISA Advisory Council to Meet November 3-4, 2010
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Change Medicare Eligibility Age? Public Is Skeptical
Employee Benefit Research Institute (EBRI)

Trends in Confidence About Future of Health Insurance Benefits
Employee Benefit Research Institute (EBRI)


Newly Posted Employee Benefits Jobs

Benefit Analyst (Indianapolis, IN)
for AUL/OneAmerica Financial Partners, Inc.
in IN

Education Consultant
for AXA Equitable
in CA, CO, FL, GA, IL, MI, MN, MT, TN, UT, WY

Pension Administrator
for The Benefits Consulting Group, Inc.
in IL

Internal Sales Director
for Transamerica
in CA

Associate Attorney
for Littler Mendelson, PC
in NY, PA




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