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Retirement Plans Newsletter

November 18, 2010

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[Official Guidance]
Text of Proposed DOL Regs on Annual Funding Notice for Defined Benefit Plans (PDF)
29 pages. Excerpt: "FAB 2009-01 provides question and answer guidance on a number of issues under section 101(f) of ERISA. It also includes model funding notices. Much of the guidance in FAB 2009-01 has been incorporated into the proposed regulation contained in this document. That guidance remains in effect until the Department adopts final regulations under section 101(f) of ERISA (or if the Department were to publish any other guidance under section 101(f) other than final regulations)."
(U.S. Employee Benefits Security Administration)

[Guidance Overview]
EBSA's Defined Benefit Funding Notice Proposed Rule
Excerpt: "[EBSA] said the proposed rule . . . contains a model notice and other guidance necessary to carry out the requirements of the amendments in the Pension Protection Act . . . and the Worker, Retiree, and Employer Recovery Act . . . ."

[Guidance Overview]
New Rules Regarding Fee Disclosures to Participants in 401(k) and 403(b) Plans
Excerpt: "A plan administrator is likely to rely on one or more vendors to compile information for these new required disclosures. If a plan administrator relies on information from a service provider, the plan administrator is protected from liability regarding the completeness and accuracy of the information if the plan administrator is acting reasonably and in good faith."
(Miller, Johnson, Snell & Cumminsky, P.L.C.)

[Guidance Overview]
'Beyond the Control of the Participant' Is Key in Emergency Distribution Requests
Excerpt: "An unforeseeable emergency is not the purchase of a home or payment of college tuition, the IRS noted. However, the distribution can include amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution."
(Wolters Kluwer)

[Guidance Overview]
DOL Disputes Adopting Moench Presumption for Fiduciaries of ERISA-Governed Plans
Excerpt: "The U.S. Department of Labor recently argued that a three-judge panel of the Ninth Circuit got it wrong when it adopted the 'Moench presumption' for assessing whether fiduciaries invested imprudently in employer stock in Quan v. Computer Sciences Corp. . . . ."
(Ballard Spahr LLP)

[Guidance Overview]
2011 Sample Retirement Plan Compliance Calendar
Excerpt: "This calendar provides general key retirement plan compliance requirements common to most calendar year plans."
(ERISAdiagnostics Inc.)

[Guidance Overview]
Participant Fee Disclosure Regulations
Excerpt: "This Technical Update provides background regarding the issuance of the regulations and related fiduciary responsibility requirements."
(SunGard Relius)

Are You Due for a Provider Check-up?
Excerpt: "Asked how often they formally evaluated their DC provider, larger programs were again this year noticeably less likely to say they did so on an annual basis."

Report: A Look at Private-Sector Retirement Plan Income After ERISA (PDF)
40 pages. Excerpt: "Retirement income generated by private-sector retirement plans has become more prevalent -- not less prevalent -- since the passage of ERISA in 1974, and this is true across all income groups."
(Investment Company Institute)

Appendix: 'A Look at Private-Sector Retirement Plan Income After ERISA' (PDF)
20 pages. Excerpt: "[The study] examines how the pension income generated by employer-provided pensions and other retirement-income sources changed since the passage of [ERISA]. This appendix provides some additional background information as well as additional detailed tabulations of the incidence and the amount of pension income among retirees."
(Investment Company Institute)

Report Says Florida's State Pension Fund Has Recovered from Recession
Excerpt: "Despite the recent investment gains, Florida's pension system, the fourth-largest in the United States, still can afford to cover only 87.9 percent of its benefit obligation to 1 mil.lion current and future retirees."
(St. Petersburg Times)

Retirement Plan Participation: Survey of Income and Program Participation Data, 2009 (PDF)
Pages 2-12 of 20 pages. Excerpt: "The latest SIPP data show 59 percent of all workers over age 16 had an employer that sponsored a pension or retirement plan for any of its employees in 2009, down from previous levels (60 percent 1998 and 63 percent 2003), and the same as in 2006."
(Employee Benefit Research Institute)

IRS Employee Plans Division 2011 Work Plan Priorities Include 401(k), 403(b) Plan Compliance, International Issues
Excerpt: "EP Examinations is looking at abusive and potentially abusive transactions and is developing proactive strategies for identifying and addressing emerging issues."
(Wolters Kluwer)

Immediate Annuities and Qualified Retirement Plans: Helping Workers with Their Post-Retirement Income
Excerpt: "[One financial planner] likes the idea of giving workers the choice of getting lifetime guaranteed income from defined contribution plans. In the past, he says, many employees failed to manage their retirement savings to get the income they needed in retirement."
(Registered Rep)

The Role of Roth in Defined Contribution Plans
Excerpt: "With recent legislative enhancements and proven success among participants, Roth is expected to be a standard part of defined contribution plans in the coming years, including among 457(b) plans."
(National Association of Government Defined Contribution Administrators, Inc.)

Making the Case for Unbiased Retirement Education
Excerpt: "CFOs . . . are not convinced they should pay a financial education provider to deliver education when the fee they are already paying includes regular retirement workshops and on-site 1x1 consultations. Is there a case that unbiased education is worth paying for?"
(Financial Finesse via, LLC)

Plan Sponsors Misunderstand Target Date Funds
Excerpt: "Sponsors of 401(k) and other defined contribution (DC) retirement plans are unaware of or unsure about many key aspects of target date funds, despite the fact that more plans are offering these funds as an investment option, according to a survey by Janus Capital Group, a global investment firm."
(Human Resource Executive Online)

Despite New Pennsylvania Law, Public Pension Costs Will Still Skyrocket
Excerpt: "'People have to realize that HB 2497 is not simply about re-amortizing the unfunded liability; it also changes benefits. The savings incurred because of the rollback of benefits will offset the costs incurred by the re-amortization.'"
(Calkins Media Incorporated)

Politicians Helped Bring Chicago's Public Pension Funds to Brink of Insolvency
Excerpt: "Chicago's public pension funds are teetering on the brink of insolvency in large part because city officials and union leaders repeatedly exploited the system, draining away billions of dollars in the last decade to serve short-term political needs, a Tribune investigation has found."
(Chicago Tribune)

What Employers Should Consider As They Look at Allowing In-Plan Roth 401(k) Conversions
Excerpt: "Sponsors who already have a Roth feature and are figuring out whether to allow in-plan conversions first have to decide whether they want to liberalize distribution rules, because the new law allows withdrawals to be contingent upon Roth conversions."

Private Pensions: Changes Needed to Better Protect Multiemployer Pension Benefits
Excerpt: "Recommendation: To provide greater transparency of the current status of multiemployer plans, assist federal monitoring efforts, and help plans address their funding deficiencies, Congress may wish to consider consolidating the annual funding notices and the PPA notices of critical or endangered status to eliminate duplicative reporting requirements."
(U.S. Government Accountability Office)

Putnam's Reynolds Calls for Fiscal Sanity, Not Austerity
Excerpt: "On the private side, Reynolds said, Congress should act on the proposal to institute a universal individual retirement account system. Also, asset managers are in a race to develop products that provide guaranteed retirement income, effectively duplicating annuities. One idea involves creating a national insurance charter and create an industry-funded capital pool, similar to the Federal Deposit Insurance Corp., and get workers to participate via automatic enrollment and automatic increases."
(On Wall Street)

ASPPA's Retirement Plan Fundamentals (RPF) program is designed to convey the broad base of knowledge necessary for every retirement plan professional to master. RPF webcourses, texts and exams aid in establishing groundwork in terminology, issues, and requirements for anyone beginning a career, re-entering the retirement field, or starting the credential process. Whether working toward a QKA, QPA, CPC, QPFC, TGPC or other credential, or simply growing your knowledge, every professional starts with ASPPA's RPF-1 and RPF-2.
Learn more and register now to take your exam by December 15. Visit
Sponsored by ASPPA

Benefits in General; Executive Compensation

[Guidance Overview]
SEC Proposal of Rules on Say-on-Pay and Golden Parachutes
Excerpt: "Pending the adoption of final rules, the SEC has stated it will not object if issuers do not file proxy material in preliminary form if the only matters that would otherwise require a preliminary proxy statement are the say-on-pay vote and frequency of say-on-pay vote."
(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview]
Reporting Under IRS §6039 Coming (PDF)
Excerpt: "After several waivers by the [IRS], regulations under §6039 of the Internal Revenue Code are now effective for 2010 Incentive Stock Option . . . and Employee Stock Purchase Plan . . . transactions."
(Kelly, Hannaford & Battles P.A.)

Feds Probe 2007 Chicago Tribune Employee Stock Plan
Excerpt: "Federal authorities are taking a closer look at the stock transfer at the heart of billionaire Sam Zell's disastrous leveraged buyout of Tribune Co., after a U.S. District Court last week determined a portion of the 2007 deal was a 'prohibited transaction' under federal law."
(Chicago Tribune)

Company-Sponsored Holiday Events Stage a Comeback
Excerpt: "After two years of cutbacks, layoffs, bailouts and outright bankruptcies, the return of this annual ritual signals that corporate managers are more confident about business prospects and feel a need to invest again in morale, reward and recognition."
(Workforce Management; free registration required)

Majority of Executives Say Holiday Office Party Worth the Cost, According to Survey
Excerpt: "Nearly one-quarter (24%) of respondents disagreed, and an equal number said their firms don't have holiday celebrations."

Restoring America's Future (PDF)
140 pages. Excerpt: "We offer this plan as proof that a group of Republicans, Democrats, and Independents can work together to create a balanced package of spending cuts and revenue increases that solves the debt crisis. Other groups might prefer other combinations of policies to reach the same ends. We created this plan to show that it can be done - and thereby encourage others from both political parties to bring their ideas to a constructive, respectful, and ultimately successful dialogue. [The executive summary document is at and the presentation slides are at]"
(Bipartisan Policy Center / The Debt Reduction Task Force via American Benefits Council)

The 'Big Three' VEBAs and Other Stand-Alone Welfare Benefit Trusts: What Is and Is Not Novel about Them
Excerpt: "The article emphasizes that what is innovative about the Big Three retiree benefit trusts is not the fact that they are VEBAs - a form of tax-exempt trust that has been routinely used to pre-fund benefit obligations for many decades - but rather that in these cases the trusts have assumed, from the employer, the legal liability for benefit obligations to plan participants."
(Social Science Research Network)

Webcasts and Conferences

DOL Fee Disclosure Rules: What Plan Fiduciaries Must Hear from Service Providers and What They Must Tell Participants
Nationwide on November 30, 2010
presented by ABA Joint Committee on Employee Benefits

P&I East Coast Defined Contribution Conference
in Florida on March 13, 2011
presented by Pensions & Investments

Press Releases

Newly Posted Employee Benefits Jobs

Director of Daily Valuation Operations
for Associates in Excellence
in CA

Retirement Plan Administrator
for A Leading National TPA in the Mid-Atlantic Region
in PA

Health Benefits Analyst
for The Segal Co.
in AZ

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