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Retirement Plans Newsletter

October 29, 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]
Pension Plan Limits for the Tax Years 2005 - 2011
Excerpt: "The Internal Revenue Service announced on October 28, 2010, cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011."
(, LLC)

[Guidance Overview]
Chart of 2011 Benefit Plan Limitations Including Rollover Eligibility Matrix
Excerpt: "Updated for 2011 cost-of-living adjustments and the new in-plan rollover provisions of the SBJA of 2010."
(Gary S. Lesser, J.D. via

[Guidance Overview]
Converting to a Roth Account in an Employer-Sponsored Retirement Plan
Excerpt: "The new statute leaves many questions unanswered. Although the joint committee report that accompanied the legislation provides some additional insight, the report is not law. The IRS is working on issuing guidance to answer these questions quickly."
(Warner Norcross & Judd LLP)

[Guidance Overview]
DOL Proposed Changes to Definition of a Fiduciary by Reason of Providing Advice
4 pages. Excerpt: "As expected, the proposal significantly narrows the current five-part test, but that change is only one element in the wide-ranging proposal."
(Profit Sharing / 401k Council of America)

[Guidance Overview]
Nationwide Settles Alabama Lawsuit Over §457 Plan Fees
Excerpt: "The Associated Press reports that the settlement will cover civil suits filed over fees that were paid to a lobbying group for state workers. Last year, the Alabama Securities Commission reported that its probe into 'endorsement fee' payments by Nationwide to the Alabama State Employees Association (ASEA) and Public Employees Benefits Corporation (PEBCO), the union's for-profit subsidiary, found the payments began in 2001 and reduced the amount of interest paid on the fixed option of the plan by 20 basis points."

[Guidance Overview]
Some SunTrust Stock Drop Claims Thrown Out
Excerpt: "[The District Court judge] contended that the plaintiffs' stock-drop claims were actually a veiled attempt to impose a duty to diversify on the plan that the Employee Retirement Income Security Act (ERISA) does not include."

[Guidance Overview]
Individual Account Plan Changes for Plan Sponsors to Consider
Excerpt: "Individual account plan administrators should consider amendments to their 401(k) and 403(b) plans and summary plan descriptions (SPDs) in order to implement two recent legislative and regulatory items."
(Gibson, Dunn & Crutcher LLP)

[Guidance Overview]
New Roth Features and Conversions for Governmental §457(b) Plans
Excerpt: "[B]eginning in 2011, sponsors of governmental §457(b) plans can for the first time allow participants to make designated Roth contributions and also can allow in-plan Roth conversions if they wish to do so."
(The Segal Group, Inc.)

[Guidance Overview]
New Roth Conversion Feature Permitted for §401(k) and §403(b) Plans
Excerpt: "Plan sponsors of §401(k) and §403(b) plans need to decide whether to offer in-plan Roth conversions. This is a very complicated issue, and it is not clear that all §401(k) and §403(b) plans that offer Roth contributions will decide to offer in-plan Roth conversions as well."
(The Segal Group, Inc.)

MetLife Whitepaper Focuses on Partial Risk Transfer Approach
Excerpt: "The paper outlines the key features of three major approaches to investment management and risk reduction: traditional asset allocation, Liability-Driven Investing, and Partial Risk Transfer."

Trade Groups Request More Guidance on In-Plan Roth Conversions
Excerpt: "The Investment Company Institute (ICI) and the American Benefits Council (ABC) have requested immediate guidance on section 2112 of the Small Business Jobs Act of 2010 which allows conversions of assets in defined contribution plans into Roth accounts within the plans."

Should I Convert My Pre-Tax Qualified Plan or IRA Money to a Roth?
Excerpt: "Although there are some people who almost certainly should convert and an equal number who almost certainly should not, the majority must weigh a number of factors in order to decide, and in many cases, luck will play as big a role as the other factors."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

Year-End Checklist for Retirement Plans
Excerpt: "As the end of 2010 approaches, there are a number of amendments and other year-end action items that need to be completed by plan sponsors with regard to their retirement plans."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

Text of Notice and Request for Applications for the IRS Advisory Committee on Tax Exempt and Government Entities (PDF)
1 page. Excerpt: "The IRS is requesting applications for membership to serve on the Advisory Committee on Tax Exempt and Government Entities . . . . Applications will be accepted for the following vacancies, which will occur in June 2011: Two (2) employee plans; two (2) exempt organizations; two (2) Indian tribal governments; one (1) tax exempt bonds; and three (3) federal, state and local governments."
(U.S. Internal Revenue Service)

A User's Guide for 401(k) Education v. Advice: What Fits Your Participants?
Excerpt: "We have learned the hard way what types of participant services best fit 401(k) plans based on the participants' stages of accumulation which is largely determined by their account balance."

Private Social Security Accounts: Still a Good Idea?
Excerpt: "{N]o proposal has required workers to invest personal account funds in Wall Street stocks, as opposed to other investments such as corporate or government bonds, bond mutual funds or indexes, or certificates of deposit."
(The Wall Street Journal via Cato Institute)

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]
Taxing Clawbacks (PDF)
21 pages. Excerpt: "This report explores the tax treatment of compensation clawbacks and addresses the tax treatment of clawbacks generally and the tax questions raised by the many special cases likely to arise."
(Rosina B. Barker and Kevin P. O'Brien, Ivins, Phillips & Barker, Chartered)

Stock Compensation Disclosures Under U.S. GAAP: The 2009 Results
Excerpt: "From 2008 to 2009, the percentage of companies disclosing stock option fair values decreased from 72% to 70%. The median increase in stock option fair value (as a percentage of strike price) was 3.6 percentage points over the period, representing more than a 10% increase in value."
(Towers Watson)

Majority of States Have Laws Requiring Employers to Provide Sufficient Time for Workers to Vote
Excerpt: "While there is no federal law requiring employers to provide that time off, there are about 30 states that do have such requirements . . . ."
(Human Resource Executive Online)

Tax Break on Tuition Benefits Remains Up in the Air
Excerpt: "Favorable tax treatment on tuition benefits expires at midnight on Dec. 31, 2010, unless Congress passes legislation aimed at making Section 127 of the Internal Revenue Code permanent."
(Employee Benefit News; free registration required)

Los Angeles, California, Mayor Asks Council to Cut Health and Pension Benefits for New Workers
Excerpt: "If the current system continues, the city estimates that costs for pensions and retiree healthcare could eat up as much as a third of the general fund budget in five years."
(Los Angeles Times)

Webcasts and Conferences

2010 Legislative Update
in Georgia on November 18, 2010
presented by Retirement Fund Management

Press Releases

PBGC Moves to Protect Pensions at Sea Island Company
Pension Benefit Guaranty Corporation (PBGC)

Newly Posted Employee Benefits Jobs

DB/DC Administrator
for Alliance Benefit Group Rocky Mountain
in UT

Deputy Chief Benefits Officer
for District of Columbia Retirement Board
in DC

Compliance Specialist - Retirement Plans
for General Board of Pension and Health Benefits
in IL

Pension Administrator
for Alliance Pension Consultants
in IL

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