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Retirement Plans Newsletter

November 3, 2010

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Many retirement plan administrators and financial institutions are looking for a straight forward and accurate way of calculating federal and state withholding taxes on pension plans. SunGard’s Omni Tax Calculator can help you efficiently perform these tax calculations by accessing current withholding tax tables via data entry or via system-to-system connectivity for numerous distribution transactions. Learn more about SunGard’s Omni Tax Calculator by downloading our free trial version.
Sponsored by SunGard

[Official Guidance]
The IRS Employee Plans FY 2011 Work Plan (PDF)
3 pages. EP's seven operating priorities for FY 2011.
(U.S. Internal Revenue Service)

[Official Guidance]
Critical, Endangered and Worker, Retiree, and Employer Recovery Act (WRERA) of 2008 Status Notices
Excerpt: "Under Federal pension law, if a multiemployer pension plan is determined to be in critical or endangered status, the plan must provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation and the Department of Labor. . . . The Department of Labor has received notice that the plans listed . . . are in critical status . . . ."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
New Automatic 403(b) Toolkit (PDF)
34 pages. Excerpt: "[The toolkit provides] employers with a 403(b) retirement plan step-by-step guidance to implementing automatic features."
(Retirement Made Simpler)

[Guidance Overview]
Elective Deferral Limits for 2011 for Employees of Non-Proft and Governmental Employers (PDF)
2 pages. Excerpt: "Generally, contributions made to 403(b) and 401(k) plans are aggregated when applying the contribution limits . . . ."
(Prudential Retirement)

[Guidance Overview]
DOL's Regulations on Fee Disclosures by Plan Service Providers (PDF)
7 pages. Excerpt: "The regulations impose significant new requirements that are likely to change the way in which plan service providers gather and report fee and compensation information. The new requirements are effective on July 16, 2011, and will apply to both new and existing service contracts or arrangements. [Reprinted with permission from Employee Benefit Plan Review, October 2010.]"
(Winston & Strawn LLP)

[Guidance Overview]
State Wage-Payment Laws, the Pension Protection Act of 2006 and 401(k) Saving Behavior
Excerpt: "Since the passage of the Pension Protection Act of 2006, which clarified the legality of auto-enroll plans and superseded these state laws, 401(k) participation has been higher in states that previously required written permission."
(Center for Retirement Research at Boston College)

[Guidance Overview]
DOL Proposal of Significant Changes to 'Investment Advice' Fiduciary Status Definition (PDF)
9 pages. Excerpt: "The proposal, in its present form, would greatly expand the types of services to be treated as subject to the ERISA fiduciary responsibility rules, potentially increasing the liability exposure for firms that provide these types of services to employee benefit plans."
(Morgan, Lewis & Bockius LLP)

[Guidance Overview]
Does Your Qualified Retirement Plan Need to Be Amended This Year? (PDF)
6 pages. Excerpt: "This advisory is to remind plan sponsors of deadlines for amending qualified retirement plans. Some amendments must be completed by December 31, 2010 (for calendar year plans). Others must be completed by January 31, 2011 (for Cycle E plans). Still others must be completed by the deadline for filing the plan sponsor's 2010 tax return ('interim' amendments). This advisory identifies those plans that must be amended now or in the near future."
(Alston & Bird LLP)

[Guidance Overview]
Is It Time to Add a Roth Feature to Your 401(k) Plan?
Excerpt: "[C]ompanies that believe participants will be interested in the in-plan conversion option may wish to amend their plans to allow Roth 401(k) contributions with the future enhancement of in-plan Roth conversions once the needed guidance is issued."
(Poyner Spruill LLP)

The World's 500 Largest Asset Managers: Year End 2009
Excerpt: "Highlights from this year's report include: Assets managed by the world's largest 500 fund managers rose by 16% in 2009 to US$62 tril.lion at the end of the year. This is in contrast to a 23% loss the year before."
(Towers Watson)

The World's 300 Largest Pension Funds: Year End 2009
Excerpt: "The P&I/Towers Watson global 300 ranking is prepared using joint research by Pensions & Investments and Towers Watson and includes a ranking of sovereign funds."
(Towers Watson)

Designing the Ideal Defined Contribution Plan (PDF)
12 pages. Excerpt: "This study represents the first in an annual series that will examine candid perspectives of leading industry practitioners regarding DC industry challenges and potential solutions."
(Northern Trust)

Beyond the ABCs of ESOP Restatements and Submissions
Excerpt: "What [companies] may not realize is that the ESOP restatement process offers potentially unrealized opportunities for cost efficiency, employer protection and creative re-design. This is the time for ESOP companies to look beyond the ABCs of basic ESOP restatements and maximize whatever opportunities the law allows."
(Chang, Ruthenberg & Long PC)

A 401(k) Funds Popularity Contest
Excerpt: "A look at which actively managed mutual funds shepherd the most retirement assets, how well they do it, and where they are putting your money."
(Bloomberg Businessweek)

Social Security Rules Penalize California Public Employees
Excerpt: "[There are] two little-understood provisions of Social Security. Formally speaking, these are the government pension offset, enacted in 1977, and the windfall elimination provision, enacted in 1983. They're known as GPO/WEP for short."
(Los Angeles Times)

Will the Various California Pension Measures Sink or Swim?
Excerpt: "The measure would roll back retirement benefits for newly hired safety employees to a formula used before the Bakersfield City Council sweetened pensions in 2001. Current employees would not be affected, only police and firefighters hired starting in January and after."
(The Bakersfield Californian)

Trucking Company Stock-Drop Suit Survives Initial Challenge
Excerpt: "[The District Judge] applied the presumption of prudence typically used in stock-drop cases (where fiduciaries in plans with company stock as a 401(k) plan investment option are presumed to have acted prudently), but concluded that the plaintiffs had put forward a strong enough case so far to rebut the presumption."

High Percentage of Corporate Finance Officials Say They Plan No Change to Their 401(k) Match
Excerpt: "[The percentage is] up 10% from six months earlier, while 10% plan cuts and 5% plan to increase their match."

Large U.S. Plan Sponsors Believe Participation in Defined Contribution Plans Should Be Mandatory
Excerpt: "'The study participants describe the ideal DC plan as simple, automatic and cost effective,' . . . ."

SPARK Institute Comment Letter to SEC Re: New 12b-1 Fee Rule (PDF)
15 pages. Excerpt: "[W]e are concerned that the approach taken in the Proposed Rule will impose significant burdens and costs on retirement plan intermediaries who provide important services, will adversely impact plan sponsors and participants, and have unintended consequences that run counter to the SEC's objectives."
(The SPARK Institute)

Pensions and Politics
Excerpt: "[P]ension reform is front and center for more than a few politicians in waiting. Unfortunately, the situation is far from trivial and transcends global borders. A trip around the world illustrates the potential perils . . . ."
(Investment Governance, Inc)

Earn your missing CPE credits for the 2009/2010 cycle. Get the latest on hot regulatory and technical issues all at your convenience with ASPPA’s webcasts. Topics include: hybrid plans, participant fee disclosure, cash balance plan basics, redefining fiduciary status, the 2009 5500 process and much more! Visit for more information and to register.
Sponsored by ASPPA

Benefits in General; Executive Compensation

[Guidance Overview]
How Health Care Reform Adversely Impacts Executive Health Care and COBRA Subsidy Arrangements
Excerpt: "Employer-provided COBRA, other medical subsidies, and perquisites affecting medical care are common components of many executive employment and severance agreements. However, . . . many of these arrangements will not comply with the nondiscrimination requirements under the Patient Protection and Affordable Care Act . . . ."
(Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)

[Guidance Overview]
SEC's Proposed Rules on Say-on-Pay (PDF)
5 pages. Excerpt: "The new votes on executive compensation will be required in proxy statements for shareholder meetings that take place on or after January 21, 2011, regardless of whether the SEC issues final rules by that time, but the vote on golden parachutes will not be required until after the SEC issues final rules.'
(Buck Consultants)

An Analysis of the Accounting Considerations Unique to Nonqualified Plans (PDF)
6 pages. Excerpt: "This article examines a major plan change and the context that is unique to nonqualified plans. With many companies changing their primary company sponsored retirement vehicle from a defined benefit structure to a defined contribution structure, we discuss the tax, accounting, regulatory and design factors that should be considered and evaluated in order to design and implement necessary changes in a nonqualified plan."
(Aon Hewitt)

Crowdsourcing Employee-Benefits Options
Excerpt: "Soliciting employee opinions is one thing, but offering employees actual decision-making power on employee benefits could give employers and their HR leaders the ability to craft more popular programs and, in turn, boost employee-satisfaction levels."
(Human Resource Executive Online)

Employers not More Generous This Holiday Season
Excerpt: "For eight of the past 10 years, gift certificates for food items have been the leading Thanksgiving gift and 2010 is no exception, the survey found. Seven percent of surveyed employers will be giving employees gift certificates this Thanksgiving, "

Webcasts and Conferences

Health Reform for Non-Major Medical Plans: Special Issues for Health FSAs, HRAs, and Others
Nationwide on December 2, 2010
presented by EBIA / Thomson Reuters

Meeting Today's Challenges in Social Security, Health Reform, and Unemployment Insurance
in District of Columbia on January 27, 2011
presented by National Academy of Social Insurance

Press Releases

ASPPA Issues Comment On Rule 12b-2
American Society of Pension Professionals & Actuaries (ASPPA)

RPAG's "Knowledge Center" Gets a Makeover
Retirement Plan Advisory Group

Newly Posted Employee Benefits Jobs

Sr. Retirement Plan Administrator
for First Savings
in PA

Account Manager
for Freedom One Financial Group
in MI

Defined Contribution Plan Administrator
for Third Party/Employee Benefits Administrator
in AL

Benefits Consultant
for Northwestern Benefit Corporation of Georgia
in GA

ERISA Consultant
for Pension-Consultants, Inc.
in MO

Internal Sales-Senior Consultant
for BeneTrends, Inc.
in PA

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