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Retirement Plans Newsletter

November 10, 2010

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[Official Guidance]
Text of SEC Request for Comment on Money Market Funds (PDF)
19 pages. Excerpt: "[SEC] is seeking comment on the options discussed in the report presenting the results of the President's Working Group on Financial Markets' study of possible money market fund reforms. Public comments on the options discussed in this report will help inform consideration of reform proposals addressing money market funds' susceptibility to runs."
(U.S. Securities and Exchange Commission via American Benefits Council)

[Official Guidance]
Text of PBGC Proposed Rule to Revise and Replace the PBGC's Debt Collection Regulations (PDF)
11 pages. Excerpt: "This proposed rule would add salary offset and administrative wage garnishment to the collection methods allowed under the current regulation and make other changes to strengthen PBGC's debt collection program.'
(Pension Benefit Guaranty Corporation)

[Guidance Overview]
DOL's Proposed Expansion of Definition of Fiduciary and Investment Advice
Excerpt: "If the DOL adopts the proposed regulation in its current form, many financial institutions and other service providers, such as appraisers and other valuation firms and broker-dealers that are typically not now fiduciaries under ERISA, are more likely to become fiduciaries and, as such, will be subject to the fiduciary duties, prohibited transaction rules, and potential liability imposed by ERISA."
(K&L Gates LLP)

[Guidance Overview]
DOL Proposal to Amend Definition of Fiduciary Under ERISA (PDF)
Excerpt: "On October 22, 2010, the Department of Labor . . . published proposed regulations that, upon adoption, would amend the definition of 'fiduciary' under section 3(21)(A)(ii) of [ERISA]."
(Transamerica Center for Retirement Studies)

[Guidance Overview]
Proposed Regulations Would Expand ERISA Fiduciary Exposure
Excerpt: "In the preamble to the Proposed Regulations (the 'Preamble'), the DOL expresses its view that the foregoing rules are too narrow to appropriately protect employee benefit plans in light of current market practices that could give rise to conflicts of interests for the numerous consultants, advisers and appraisers who significantly influence benefit plan investment decisions but may not be treated as ERISA fiduciaries under current law."
(James Morphy, Sullivan & Cromwell LLP via The President and Fellows of Harvard College)

Americans Want More Financial Education, According to Survey
Excerpt: " When asked to rank the importance of understanding their own personal finances, nearly 8 in 10 respondents (79%) gave it a 7 or above on a scale of one ('what I don't know won't hurt me') to 10 ('I feel the need to know all I can about my financial situation'), according to a press release."

University of California System to Consider Pension Reduction
Excerpt: "Under [the] proposal, current employees and the university would begin to contribute more money to the retirement plan, but there would be no reduction in benefits . . . . Employees hired after July 1, 2013, would be offered a plan with slightly reduced benefits, a step that would cut costs by 20% . . . ."

HR's Role in New ERISA Regulation Related to Fiduciary Requirements for Fee Disclosures in Retirement Accounts
Excerpt: "While an employer's legal and financial experts -- whether in-house or external -- will be most responsible for how these new DOL regulations are met, human resources also can play a key role in ensuring the new regulations are followed, say employment lawyers familiar with the changes."
(Human Resource Executive Online)

Social Security Provides Economic Security to Women
2 pages. Excerpt: "Social Security benefits, while modest, are a substantial source of income for older Americans, providing annual benefits of roughly $12,000 for women 65 and over."
(U.S. Congress, Joint Economic Committee)

Palm Beach, Florida, Police Union Offers to Revert Back to 1999 Pension, Benefits
Excerpt: "Fraternal Order of Police representatives to the town's police department say department members will revert back to the pension and benefits plan of 1999 under the offer."
(Palm Beach Daily News)

Why Target-Date Funds Can Miss Marks
Excerpt: "[One expert] said TDF managers have 'high-jacked participant's accounts' by not reducing equity exposures and risk as the target date approaches. In effect, the TDF managers are doing a 'bait-and-switch' because the fund is being sold as an increasingly conservative portfolio as the retirement date approaches, but then the risk is increased as the managers unilaterally pursue longevity risk."
(InvestorPlace Media, LLC)

Understanding 401(k) Fees
Excerpt: "Critics share a common complaint: 401(k) fees are too high.* I've been asked this question in this way: Why aren't 401(k) plans as cheap as a low-cost Vanguard index fund?"
(The Vanguard Group, Inc.)

Valued by every practitioner and recommended for every ERPA candidate, The ERISA Outline Book, 2010 Edition by Sal L. Tripodi, J.D., L.L.M. offers six volumes of vital information on everything you need to know, including over 100 new rulings, guidances and regulations affecting retirement plans. Subscribe to the online version and access new updates the moment they are available!

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Sponsored by ASPPA

Benefits in General; Executive Compensation

[Official Guidance]
IRS Revenue Ruling 2010-27: Addressing Qualifying 'Unforeseeable Emergencies' for Distributions (PDF)
Excerpt: "The revenue ruling provides guidance, in the form of examples, on what constitutes an unforeseeable emergency distribution under section 457(b) of the Code and section 1.457-6(c) of the regulations. The revenue ruling also applies the same standards to distributions from a nonqualified deferred compensation plan subject to section 409A."
(U.S. Internal Revenue Service via American Benefits Council)

[Guidance Overview]
Section 409A Compliance: Deadline for Taking Advantage of Correction Program Is December 31, 2010
Excerpt: "Companies should review all of their non-qualified deferred compensation arrangements to ensure that they comply with Section 409A and, if they do not comply, act now to take advantage of the Notice 2010-6 document correction program, as the relief available under Notice 2010-6 expires at the end of this year."
(Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.)

[Guidance Overview]
Retirement Plan Status Affecting Options: No ERISA Claim
Excerpt: "Specifically, the Second Circuit rejected a former employee's argument that it was an ERISA breach of fiduciary duty for a stock plan administrator to assure the former employee that she could exercise her options following retirement under an ERISA-covered retirement plan."
(Utz, Miller & Eickman, LLC)

Webcasts and Conferences

ASPPA EduCast: Cash Balance Plan Basics
Nationwide on December 2, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Did You Survive the 2009 5500 Process?
Nationwide on December 16, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Engagement Letters Under Final DOL Fee Disclosure Regulations
Nationwide on December 14, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Hybrid Retirement Plans Regulations - New Final and Proposed Rules
Nationwide on November 11, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Participant Fee Disclosure What You Need to Know Under the Final Rules
Nationwide on November 18, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Redefining Fiduciary Status Under DOL Proposed Regulations
Nationwide on December 10, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

ASPPA Webcast: Small Business Jobs Act: Roth Opportunities and Challenges
Nationwide on December 7, 2010
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Los Angeles Benefits Conference
in California on January 12, 2011
presented by ASPPA (American Society of Pension Professionals & Actuaries)

in Nevada on March 6, 2011
presented by ASPPA (American Society of Pension Professionals & Actuaries)

Press Releases

Virginia Woman Sentenced to Prison and Ordered to Repay Approximately $57,000 in Restitution to Plan Participants
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Newly Posted Employee Benefits Jobs

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Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

Pension Administrator
for Cornerstone Group

Project Manager, Defined Contributions
for The Newport Group
in NC

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