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Retirement Plans Newsletter

November 23, 2010

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[Guidance Overview]
2010 End of Year Plan Sponsor 'To Do' Lists
Excerpt: "In this issue [Snell & Wilmer] provide seven 'to do' lists that may require you to take action before the end of 2010 or in early 2011. Many of the action items are a result of the Pension Protection Act of 2006 . . . and may require plan amendments."
(Snell & Wilmer LLP)

[Guidance Overview]
IRS Cash Balance Plan Guidance
Excerpt: "The Final Regulations are generally applicable for plan years beginning on or after January 1, 2011. The rules that would be implemented under the Proposed Regulations would generally apply for plan years beginning on or after January 1, 2012. However, plans may currently rely upon both the Final Regulations and the Proposed Regulations for the market rate of interest provisions."
(Proskauer Rose LLP)

[Guidance Overview]
IRS Guidance on 457 Plan Emergency Distributions
Excerpt: "The key element is that the circumstance must be 'beyond the control of the participant,' CCH notes in a summary of the guidance."

[Guidance Overview]
New ERISA Rule on Participant-Level Fee Disclosure
Excerpt: "The Participant Disclosure Rule clearly places responsibility for providing the required disclosures on the plan administrator (usually the employer sponsoring the plan), and plan administrators that do not comply with the Participant Disclosure Rule risk claims of breach of their fiduciary duties of prudence and loyalty under ERISA."
(K&L Gates LLP)

Retirement Plans for Nonprofits Get Makeover
Excerpt: "Sponsors have responded by trying to rein in the number of plans and providers offered to employees. For many, as few as five different plans, and as many as two dozen, have been commonplace, each with 20 to 30 times as many in-plan investment options."

Earn Too Much Money to Maximize Your 401(k) Plan?
Excerpt: "When lower-paid workers cut back or stop making 401(k) contributions -- as many have done since the recession began, according to industry experts -- companies that don't meet certain requirements are forced to reduce or refund the retirement-plan contributions of the higher earners."
(The Wall Street Journal)

IRS Says No Mandatory Withholding for In-Plan Roth Rollovers
Excerpt: "According to a notice posted by the Internal Revenue Service on its website, mandatory 20% withholding does not apply to in-plan Roth direct rollovers."

How to Nudge 401k Participation Higher
Excerpt: "Thaler and Sunstein demonstrate the power of a well structured default or no-action-required option to nudge people towards making the wiser choice. They suggest setting up automatic enrollment in a 401k plan or what would be considered an opt-out policy."
(Fiduciary News)

It's Time to Focus on What Really Drives 401(k) Success
Excerpt: "Now is the time for plan providers, plan sponsors and consultants to focus not only on fiduciary considerations, fees and unnecessary plan customization but also on what has proven to make a real difference - independent professional advice on saving and investing."
(Employee Benefit News; free registration required)

Plan Terminations: Annuity Market Quarterly Update (PDF)
Excerpt: "Despite the rebound in the third quarter, many pension plans remain underfunded. On top of that, annuity interest rates are falling to all-time lows, making this among the worst times to purchase annuities. In this article, we focus on preparing for the annuity purchase aspect of a plan termination. We begin with a review of market activity during 2010, provide an update on interest rates and continue with an update of the 'buyin' concept very popular in the UK that US insurance companies are beginning to explore."
(Aon Investment Consulting)

Taxpayer Support Continues for Retired or Defeated Congressmen in the Form of Federal Pensions
Excerpt: "The Congressional Research Service report states that lawmakers also contribute a larger share of their salary than other federal employees do. Because of the 'uncertain tenure of congressional services,' both defined benefit plans were designed to give a larger benefit for each year of service to lawmakers than other federal employees, the report states."
(Chattanooga Times Free Press)

Debating Social Security's Cost of Living Adjustment
Excerpt: "[W]hat retirees may find even more irksome is the fact that the measure that determines whether they'll get a raise isn't even based on the spending patterns of retirees -- it's based on the buying habits of working people."
(The New York Times; free registration required)

401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2009 (PDF)
68 pages. Excerpt: "The average 401(k) retirement account balance rose 31.9 percent in 2009, according to a report released [November 22, 2010.]"
(Employee Benefit Research Institute)

Raise the Retirement Bar, Not the Age?
Excerpt: "Because so many Americans are unable to work well into their sixth decade, one unintended consequence of raising the Social Security retirement age could be that more Americans will draw on other public assistance services, such as Old Age, Survivors, and Disability Insurance . . . programs."
(National Institute on Retirement Security)

American Benefits Council/CIEBA Request for Prompt Guidance on FBAR Reporting for Retirement Plans (PDF)
2 pages. Excerpt: "We write to request that the Financial Crimes Enforcement Network promptly announce whether it expects its upcoming final regulations (1) will require tax-exempt retirement plans to file a Report of Foreign Bank and Financial Accounts (commonly referred to as 'FBAR'), and (2) will clarify whether the persons responsible for the investment affairs of these tax-exempt retirement plans have 'signature authority' that requires them to provide information about company pension plan foreign investments on their individual tax returns ('Form 1040')."
(American Benefits Council)

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!

Order yours today by visiting!

Sponsored by ASPPA

Webcasts and Conferences

Need to Know Updates About Recent Retirement Regulations
Nationwide on December 8, 2010
presented by International Foundation of Employee Benefit Plans

Public Fund Plan Sponsors: Valuable Insight into Possible Solutions to Rising Pension Costs
Nationwide on December 2, 2010
presented by International Foundation of Employee Benefit Plans

Press Releases

Newly Posted Employee Benefits Jobs

Participant Education Platform Manager
for SEI Investments
in PA

Participant Counselor - Alabama
for Diversified Investment Advisors
in AL

401K/Qualified Plan Sales Consultant
for Brown & Brown of Detroit, Inc.
in MI

Employee Benefits Producer
for Brown & Brown of Detroit, Inc.
in MI

Product Services Supervisor
for Sentry Insurance
in WI

Pension Administrator
for Associated Pension Consultants
in CA

Actuarial Consultant
for Swerdlin & Company
in GA

Retirement Solutions Proposal Manager
for CUNA Mutual Group
in WI

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