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Retirement Plans Newsletter

October 25, 2010

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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.

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Sponsored by ASPPA

[Guidance Overview]
Year-End Compliance for Qualified Retirement Plans
Excerpt: "[This update summarizes recent] changes and other year-end housekeeping matters that are necessary for continued compliance with retirement plan requirements."
(McGuireWoods LLP)

[Guidance Overview]
Roth In-Plan Conversions Compliance Alert: Critical Issues and Potential Risks (PDF)
4 pages. Excerpt: "The new law does not include the information and details that plan sponsors and record keepers need in order to make the necessary plan and administrative changes to offer the feature. Regulatory guidance from the Treasury Department . . . is needed before plan sponsors can make in-plan conversions available without creating potential problems for their plans and participants.'
(The SPARK Institute)

[Guidance Overview]
Required Withdrawals from IRAs Are Back in Effect. Here's What You Need to Know.
Excerpt: "[A]s part of the 2009 suspension, people who turned 70 ½ in 2009 were allowed to skip their first mandatory withdrawal -- the one that had to be taken by April 1. That means these individuals have to take only one distribution this year, and the deadline for that is Dec. 31."
(The Wall Street Journal)

[Guidance Overview]
Handout: IRS 401(k) Phone Forum Presentation: Compliance Check Questionnaire (PDF)
17 pages. See the chart titled: IRS 401(k) Fix-It Guide.
(U.S. Internal Revenue Service)

[Guidance Overview]
Waiver of 60-Day Rollover Requirement Denied Due to Lack of Written Document Showing Intention of Transferring Funds to IRA
Excerpt: "[T]he taxpayer's deposit of funds received from one financial institution's IRA into another financial institution's high interest checking account and subsequent investments in nonqualified investment vehicles with the second financial institution was a taxable event under Code Sec. 408(d)(1)."
(Wolters Kluwer)

[Guidance Overview]
DOL's Proposed Fiduciary Definition Regulations
Excerpt: "It should be remembered that these are proposed regulations. With a comment period ending in mid-January, it is unlikely that we will see final regulations prior to late next year at the earliest, with an effective date sometime in 2012."
(JPMorgan Chase & Co.)

[Guidance Overview]
Comparative Analysis: Disclosure Obligations of 408(b)(2) vs. Schedule C (PDF)
5 pages. Excerpt: "This five page comparative analysis, although not comprehensive, is a summary of the similarities and differences between the disclosure obligations required for the 408(b)(2) exemption and similar disclosures required as part of a benefit plan's annual report on Form 5500."
(FRA/Plan Tools via, LLC)

[Guidance Overview]
Educating Participants on Fees, a Win for 401(K) Plan Custodians
Excerpt: "By effectively communicating new required fee disclosures through the utilization of enhanced web based technology and consolidated participant statements, large custodians expect to increase pension assets under management."
(Gerson Lehrman Group)

[Guidance Overview]
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 Services, Inc.)

Cash Balance Plaintiff to Get Attorney's Fees
Excerpt: "[The U.S. District Court] decided that granting Cynthia Young lawyer fees was appropriate even though she had not prevailed in her claim that the plan should not be allowed to escape liability by merely correcting a plan document drafting error . . . ."

What Would Americans Do If the Retirement Age Was Raised?
Excerpt: "Even though medical advances make us feel that 60 is the new 30, there are certain jobs and professions that will be harder for older workers to keep grinding away at if the retirement age keeps creeping up."

Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 10/22/10
Excerpt: "Each Monday, [Fiduciary News gives] you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and [others in the industry]."
(Fiduciary News)

New Regulation Allows You to Track 401(k) Fees
Excerpt: "The rule will require 401(k) plan administrators to: Give workers quarterly statements of plan fees and expenses deducted from their accounts."
(The Dallas Morning News)

CBO's 2010 Long-Term Projections for Social Security: Additional Information
Excerpt: "In calendar year 2010, Social Security's outlays will exceed tax revenues (that is, the trust funds' receipts excluding interest) for the first time since the enactment of the Social Security Amendments of 1983. Over the next few years, the Congressional Budget Office (CBO) projects, the program's tax revenues will be approximately equal to its outlays."
(U.S. Congressional Budget Office)

DC Plan Transitions Grow More Complex
Excerpt: "DC plans are much bigger than they used to be, some have moved from mutual funds to more complex investments, investment managers are keeping a tighter hold on the governance reins, and expectations are such that most expect to be back up and running in just a few days."

Eight Things New Yorkers Should Know About Public Retirement Benefits in New York State (PDF)
10 pages. Excerpt: "Public employees in New York State {outside New York City} join one of three pension systems, depending on their occupation. One pension system is dedicated to teachers, another is for employees of police and fire departments, and the last is for all other public employees."
(Citizens Budget Commission)

Should Public Pensions Be Changed? Eight Economists Reply
Excerpt: "Following the November elections, do you favor action at federal, state and local levels to address the growing problem of public pension finances? What one change would be the most advisable economically for any level of government?"
(The San Diego Union-Tribune, LLC)

Responsible Management and Design Practices for Defined Benefit Pension Plans (PDF)
2 pages. Excerpt: "Recommendation. The Government Finance Officers Association . . . recommends that under no circumstance should state and local government plan sponsors engage in pension contribution holidays or make insufficient contributions."
(Government Finance Officers Association of the United States and (Can.ada))

Labor Department Seeking to Restore the Two-Part Test for Fiduciary Status Found in ERISA
Excerpt: "The proposal seeks to set aside the additional conditions that the advice be rendered 'on a regular basis,' that the advice would serve as a 'primary basis' for investment decisions with respect to plan assets, that the recommendations are individualized for the plan, and that the advice be provided pursuant to a mutual understanding of the parties."

Learn more about the only conference focused on the business aspects of running your TPA company. Held January 15-17, 2011 at the Sanctuary on Camelback Mountain in Scottsdale, Arizona, NIPA’s 2011 Business Management Conference (BMC) specifically addresses the unique needs of TPA business owners and executives by providing top-notch education and opportunities for you to network and share business success stories. For complete details, visit and download a copy of the advance program. Register by December 17 and save $100!
Sponsored by NIPA

Benefits in General; Executive Compensation

[Guidance Overview]
Federal Appeals Court Rules Employers Need Not Reimburse H-2B Workers' Immigration-Related Expenses
Excerpt: "Although this decision is binding precedent in the Fifth Circuit (which has jurisdiction over Louisiana, Mississippi, and Texas), insofar as the decision may conflict with both the Eleventh Circuit (having jurisdiction over Alabama, Florida, and Georgia) and the DOL's recent interpretation, employers outside the Fifth Circuit should tread carefully with respect to reimbursing H-2B workers for visa, travel, and recruitment expenses where their failure to do so would effectively bring employees' wage below the federal minimum."
(Jackson Lewis LLP)

[Guidance Overview]
New Form 5500 FAQs Address Reportable Compensation for Schedule C Purposes
Excerpt: "EBIA Comment: Very few ERISA plans have plan employees or individual trustees (of the sort apparently envisioned by Q28). However, for those multiemployer plans or large single employer plans that do, these new FAQs clarify Schedule C's broad definition of 'compensation,' under which even reimbursements for properly incurred expenses must be included (provided the otherwise applicable thresholds for reporting trustee or employee compensation are met)."
(Employee Benefits Institute of America)

2010 Information Reporting Program Advisory Committee Public Report
Excerpt: "The purpose of IRPAC is to provide recommendations to the IRS for the continued improvement of the tax information reporting program. IRPAC provides a public forum for the IRS to meet on a regular basis with tax professionals engaged in both the production and use of tax information returns to discuss issues and to work in partnership to develop solutions."
(U.S. Internal Revenue Service)

How to Keep Your Star Employees
Excerpt: "Even if money isn't the best motivator, it still talks. To make a smaller bonus pool go further, fine-tune your timing. Rewards handed out at tough times can have a major impact. It's also smart to rethink your selection process. More companies are paying bonuses to those with hard-to-replace skills instead of just top performers, says Hay Group comp expert Tom McMullen."

As Work Force Changes, Many Misclassified Workers Miss Out on Benefits
Excerpt: "Hiring independent contractors instead of employees can save a company about 35 percent in benefits and taxes . . . . But those savings can evaporate if the company is found to have misclassified those workers because of penalties and lawsuits, among other actions."
(Chicago Tribune)

Webcasts and Conferences

2011 Business Management Conference (2011BMC)
in Arizona on January 15, 2011
presented by National Institute of Pension Administrators

HITECH Compliance Check: What Plan Sponsors and TPAs Should Be Doing Now
Nationwide on October 21, 2010
presented by EBIA / Thomson Reuters

Seven Simple Steps You Can Take To Improve Plan Compliance
Nationwide on November 10, 2010
presented by Pension Pundits, LLC

Voluntary Fiduciary Correction Program and Abandoned Plan Program Workshops
in California on December 14, 2010
presented by U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Press Releases

Statement of Labor Secretary Hilda L. Solis on Reported Decline in Workplace Injuries and Illnesses
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Prescription Drug Abuse in the Workplace on the Rise
Florida Society of Interventional Pain Physicians (FSIPP)

Newly Posted Employee Benefits Jobs

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

Pension Plan Services Manager
for Sentry Insurance
in WI

Pension Plan Administrator
for Central New Jersey
in NJ

Sr. Manager- Plan Conversions
for Charles Schwab
in TX

Pension Consultant/Administrator
for PenServ, Inc.
in NY

Retirement Plan Supervisor
for SVA Retirement Plan Services, LLC
in WI

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