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Retirement Plans Newsletter

November 29, 2010

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[Official Guidance]
Text of IRS Employee Plans News, November 26, 2010 (PDF)
10 pages. Articles include Funding Relief for Multiemployer Defined Benefit Plans, Governmental Retirement Plans -- Determination Letters, Pre-Approved IRAs, and Form 5500 Notices Sent in Error Need a Response.
(U.S. Internal Revenue Service)

[Official Guidance]
Text of IRS Notice 2010-84: Guidance on In-Plan Roth Rollovers; Extended Deadline for Amendments (PDF)
12 pages; Q&A format, including examples. Excerpt: "[T]o give [401(k)] plan sponsors sufficient time to adopt plan amendments and thereby enable plan participants to make in-plan Roth rollovers before the end of the 2010 plan year, the Service is extending the deadline for adopting a plan amendment described in Q&A-17 . . . . to the later of the last day of the plan year in which the amendment is effective or December 31, 2011, provided that the amendment is effective as of the date the plan first operates in accordance with the amendment. . . . . [Q&A 17:] The extension of time . . . . applies to any plan amendment that is adopted pursuant to § 2112 of SBJA. Thus, for example, if a . . . . plan is amended to permit in-plan Roth rollovers, the [extension] applies to a plan amendment that permits elective deferrals under the plan to be designated as Roth contributions, a plan amendment that provides for the acceptance of rollover contributions by the designated Roth account, and the plan amendment that permits in-plan Roth rollovers . . . . ."
(Internal Revenue Service)

[Official Guidance]
Text of IRS Notice 2010-83 on Multiemployer Pension Plan Funding Rules Under PRA 2010: Special Amortization Rule, Special Asset Valuation Rule (PDF)
24 pages. Excerpt: "The following questions and answers address issues relating to the special amortization rule and special asset valuation rule under § 431(b)(8) . . . . Extended Amortization Period for Eligible Net Investment Losses . . . . Asset Valuation Rules . . . . Solvency Test . . . . Restrictions on Plan Amendments Increasing Benefits . . . . Decision to Apply the Special Funding Rules . . . . Notification to Participants, Beneficiaries, and the PBGC . . . . Certification of Status under § 432 . . . . Form 5500 Requirements. "
(Internal Revenue Service)

[Guidance Overview]
2011 Retirement Funds Rollover Chart (PDF)
1 page. Excerpt: "This is a chart of what the Internal Revenue Service regards as permissible when rolling funds over from one type of retirement account to another."

[Guidance Overview]
Are You an ERISA Fiduciary? It May Become More Likely if You Give Investment Advice
Excerpt: "Under the DOL's proposal: More Activities Will Be Covered: Under the new rules, the type of advice potentially leading to fiduciary status would be expanded. Appraisers of plan assets, including real estate, and those who give fairness opinions, would be fiduciaries, as would advisers on proxy voting or other aspects of securities management and those who advise about the selection of investment options from available menus."
(Osler, Hoskin & Harcourt LLP)

[Guidance Overview]
First Round of Guidance on Roth 'In-Plan' Conversions (PDF)
2 pages. Excerpt: "[T]he guidance provides rules for when the converted funds are distributed from the plan. As with any designated Roth account, a separate Form 1099-R is used to report the distribution and all of the same rules apply as with any designated Roth account distribution. However, in the blank box to the left of box 10, the amount of the distribution allocable to the in-plan Roth conversion must be entered."
(Groom Law Group)

[Guidance Overview]
Child Loses Battle over 401(k) Distribution Taxes
Excerpt: "A federal court has upheld a lower court ruling that the minor child of a woman who pleaded guilty to killing the child's father is liable for federal income tax on a 401(k) distribution from his father's account."

[Guidance Overview]
IRS Offers Roth 401(k), 403(b) Guidance About In-Plan Roth Rollovers
Excerpt: "The IRS notes that 401(k) and 403(b) plans have extended deadlines to amend to allow 2010 in-plan Roth rollovers if the amendment's effective date is the date the plan first operated in accordance with that amendment."

[Guidance Overview]
IRS Provides Multiemployer Plan Funding Relief
Excerpt: "In Notice 2010-83 the IRS offered guidance on funding relief for multiemployer plans under new Code § 431(b)(8), as added by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), § 211(a)(2)."

Pros and Cons of Raising Retirement Age
Excerpt: "A look at the arguments for and against raising the Social Security retirement age."
(AOL Inc.)

Here Is What Retirement with a Seven-Figure Portfolio Looks Like
Excerpt: "[S]aving $1 mil.lion doesn't necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. Here's what it takes to save that amount over a working career and how much income you can expect a $1 mil.lion nest egg to provide in retirement."
(U.S. News & World Report)

Think Tank Wants to Cut Tax-Deferred Plan Contributions
Excerpt: "Under the proposal -- included in the [Bipartisan Policy Center's] 'Restoring America's Future' report -- the total combined tax-deferred contributions that employees and employers could make would be limited to 20% of an employee's annual earnings, or $20,000, whichever is smaller. The current combined employer/employee cap is $49,000 a year."
(Pensions & Investments)

For Many Companies, Major Benefits from ESOPs (PDF)
3 pages. Excerpt: "This article will describe some of the more interesting characteristics and uses of an incentive compensation tool known as an ESOP, specifically in the context of a privately-held corporation."
(Executive Counsel via Holland & Hart LLP)

Deficit Commission Co-Chair Calls U.S. Seniors the 'Greediest Generation'
Excerpt: "The co-chair of President Barack Obama's bipartisan deficit commission lashed out at seniors Wednesday because they are unhappy with his ideas for reducing the deficit by cutting Social Security benefits while reducing corporate taxes."
(The Raw Story)

Pennsylvania Governor Signs Pension Reform Bill
Excerpt: "The bill (House Bill 2497, now known as Act 120 of 2010), essentially rolls back pension enhancements approved in 2001. It increases from five to 10 years the time it takes for newly hired employees to become vested and delays the retirement age to 65 from 60 for state employees and 62 for school employees. It rolls back the multiplier used to calculate pension benefits to 2% from 2.5%, according to"

Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 11/26/10
Excerpt: "Each Monday, [Fiduciary News gives] you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks."
(Fiduciary News)

While There's a Lot to Criticize About the U.S. Retirement System, There Are 10 Reasons to Be Thankful
Excerpt: "Much of what we have to be thankful for revolves around new 401(k) features, including automatic enrollment, matching contributions and investment advice."
(MarketWatch, Inc.)

Fixing Social Security Could Be Painless, Given Enough Time
Excerpt: "Retirement-finance experts say a gradual shift in benefits -- less to well-off retirees, more to those of modest means -- plus a small tax increase for upper-income Americans would keep the program afloat for generations. While those may not be popular choices, the challenge is far less daunting than cutting government spending or containing the costs of Medicare and Medicaid."
(The Seattle Times)

Talking Turkey About Privatizing Social Security
Excerpt: "Why is privatizing Social Security such a turkey? Because retirees shouldn't have to depend on the market's vagaries for survival money."
(The Washington Post; free registration required)

Good Reasons to Be Uneasy About Retirement Security
Excerpt: "The late 20th century saw a great shift in risk, in which uncertainty that had been borne by employers and the government was shunted onto individuals. And in our efforts to solve our deficit and economic problems, we must be careful not to make our retirement problem worse."
(The Washington Post; free registration required)

It's a whole new world at the 2011 NTSAA Annual Conference, the premier 403(b) and 457 forum for educating producers, providers, agents, broker/dealers, sales and marketing managers, office staff, plan sponsors and other business officials. Register now and join your colleagues in Orlando February 2-5, 2011.

For more information and a brochure, go to

Sponsored by NTSAA

Benefits in General; Executive Compensation

DOL Online Database of Form 5500 Filings
Excerpt: "Now that many plan sponsors have completed their 2009 Form 5500 filings for their retirement and welfare plans, they may be wondering about the status of the proposed online posting of these filings. We hadn't heard much about this requirement lately, but buried in the new proposed DOL Annual Funding Notice regulations is a reference that the system is now live."
(Van Iwaarden Associates)

Webcasts and Conferences

Holiday/Member Appreciation Luncheon
in Georgia on December 9, 2010
presented by WEB (Worldwide Employee Benefit Network) Atlanta Chapter

PBGC Reporting, Monitoring and Enforcement: Dealing with "Downsizing Liability" and More
Nationwide on December 9, 2010
presented by ABA Joint Committee on Employee Benefits

Press Releases

US Labor Department Proposes Rule to Enhance Target Date Retirement Fund Disclosures
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ASPPA Welcomes IRS Guidance on Roth Conversion
American Society of Pension Professionals & Actuaries (ASPPA)

Newly Posted Employee Benefits Jobs

Director, Pension Administration
for Third Party Administrator
in CT

Client Relationship Manager
for Alliance Benefit Group of Michigan, Inc.
in MI

DC/DB Administrator
for Nicholas & Hicks, Inc.
in CA

Retirement Counselor
for Diversified Investment Advisors, Inc.
in UT

Manager, Prudential Retirement
for Prudential
in IA

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