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Retirement Plans Newsletter

December 6, 2010

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[Official Guidance]
PBGC Technical Update 10-4: Reportable Events; Funding-Related Determinations; Missed Quarterly Contributions; Guidance for 2011 Plan Years
Excerpt: "This Technical Update addresses two topics: Funding-related determinations for purposes of waivers, extensions, and the advance reporting threshold test. Missed quarterly contributions."
(Pension Benefit Guaranty Corporation)

[Guidance Overview]
Retirement Plan Compliance Calendar for 2011
2 pages. Excerpt: "Deadlines for IRS Forms are extended to the next business day if the due date falls on a weekend or holiday."
(J.P. Morgan Retirement Plan Services LLC)

[Guidance Overview]
401(k), 403(b), and 457(b) Plans: Key Features and Contribution Limits for 2011 (PDF)
1 page. The chart offers a comparison of the plans.
(Milliman, Inc.)

[Guidance Overview]
IRS Guidance on In-Plan Roth Rollovers (PDF)
Excerpt: "On November 26, 2010, the IRS issued Notice 2010-84, providing guidance, in the form of 20 questions and answers, regarding in-plan Roth rollovers. The Notice answers certain questions regarding eligible distributions, plan amendments and tax recognition rules."
(Sutherland Asbill & Brennan LLP)

IRS Advisory Committee Invites Service-Providers to Small Business Retirement Plans to Answer Survey by Year-End
Excerpt: "This [anonymous] survey is not being carried out or conducted by the IRS, but by the volunteer members of the ACT who advise the IRS on employee benefits issues. It is for informational purposes only and will assist the ACT in making recommendations to the IRS about how it may enhance its relationship with small employers and the compliance efforts of their retirement plans."
(IRS Advisory Committee on Tax Exempt and Government Entities)

IRS Advisory Committee Invites Small Business Retirement Plan Sponsors to Answer Survey by Year-End
Excerpt: "This [anonymous] survey is not being carried out or conducted by the IRS, but by the volunteer members of the [Advisory Committee] who advise the IRS on employee benefits issues. It is for informational purposes only and will assist the ACT in making recommendations to the IRS about how it may enhance its relationship with smalls that maintain employer retirement plans."
(IRS Advisory Committee on Tax Exempt and Government Entities)

Emerging Market Equities as a Defined Contribution Plan Option
2 pages. Excerpt: "There are numerous factors to consider when evaluating the role of an Emerging Market Equity option in a DC lineup, which merit due diligence beyond product-specific features. From an asset class perspective, does your DC plan already offer indirect exposure to an EME via an existing equity manager, or through a brokerage window? From a plan demographic standpoint, do participants have a sufficient understanding of this asset class, its risk-reward profile, and how it fits within their total asset allocation framework?"
(J.P. Morgan Retirement Plan Services LLC)

What Happens When Our 'Stretch IRAs' Run Into Creditor Issues? (PDF)
6 pages. Excerpt: "Planning for the twenty-first century revolves around deferral of receipt and therefore taxation of IRAs or other tax-favored-investment. As planners, we must think about the possibility of creditors of the beneficiary. The courts have obfuscated whether an 'inherited IRA' is protected from the claims of the beneficiary's creditors."
(Michigan Tax Lawyer via Miller, Canfield, Paddock and Stone, PLC)

Trending Topics for ERISA Plan Sponsors: Week Ending 12/3/10
Excerpt: "Each Monday, [Fiduciary News gives] you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and [others in the business.]"
(Fiduciary News)

Proposed New Rules for Target-Date Funds
Excerpt: "For starters, the Labor Department's proposed rule would require employers to provide a description of how the fund's asset allocation -- among stocks, bonds and cash -- will change over time, and when it will reach its most conservative position. That's an important change, since not everyone will have the same tolerance for risk as retirement nears. Not only must this information be explained, it must also be presented graphically."
(The New York Times; one-time registration required)

PBGC Helped Preserve Pensions for 360,000, As Deficit Widened in FY 2010
Excerpt: "In the past year, the Pension Benefit Guaranty Corporation . . . took over failed pension plans covering nearly 109,000 workers and retirees, and helped prevent the termination of plans covering about 250,000 others, according to the Agency's fiscal year 2010 annual report. At the same time, the PBGC's deficit widened to $23 bil.lion during the fiscal year, an increase from $22 bil.lion in fiscal year 2009."
(Wolters Kluwer)

Think Tank Urges Cutting Contributions to Tax-Deferred Plans
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 were smaller."
(Investment News; one-time registration required)

Illinois Senate Approves Reduced Pensions for New Police and Firefighters
Excerpt: "The Chicago Sun-Times reports that municipalities won pension cutbacks for incoming cops and firefighters, including bumping up the retirement age with full benefits from 50 to 55, limiting retirement cost-of-living increases, and capping the final salary upon which pensions are based. In exchange, the unions got a pledge by the cities to have their police and fire pension systems 90% funded by 2041."

Congressional Proposals Seek Greater Disclosure from Public Pension Funds
Excerpt: "The Public Employee Pension Transparency Act, introduced by incoming budget committee chairman Congressman Paul Ryan, would demand that state and local government pension plans report to the Secretary of the Treasury the funded status of those plans, and that the information be made publicly available via a searchable website."
(Global Pensions)

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Sponsored by NTSAA

Benefits in General; Executive Compensation

[Guidance Overview]
U.S. Supreme Court Mulls ERISA Claim Against Insurer Cigna
Excerpt: "A class-action pension-benefits claim by present and former Cigna employees under [ERISA] could have an unsettling effect on plan sponsors if the Supreme Court does not overturn two lower-court rulings in the nine-year-old case."

[Guidance Overview]
U.S. Supreme Court to Rule on Remedies for Deficient Employee Communications
Excerpt: "Deficient SPDs have now moved to the front burner, as the U.S. Supreme Court heard oral argument on November 30 in CIGNA v. Amara. In this case the Supreme Court will rule on the correct remedies when an SPD does not describe a material limitation on pension benefits (i.e., that participants might not accrue any new benefits for a period of time) contained in the plan document."
(Osler, Hoskin & Harcourt LLP)

[Guidance Overview]
IRS's Additional 409A Correction Relief (PDF)
2 pages. Excerpt: "On November 30, the [IRS] issued Notice 2010-80 . . ., which provides additional relief for certain corrections of Code section 409A documentation and operational errors. Some of the relief in the Notice expires at the end of 2010, so an employer needs to act very quickly to take advantage of this relief."
(Groom Law Group)

Business Mileage Rate Up One Cent for 2011
Excerpt: "Beginning on January 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 51 cents per mile for business miles driven, 19 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations."

Employers Showing Bit More Largesse This Holiday Season
Excerpt: "After a downturn in 2008 and 2009, employers appear to be 'in a more expansive mood,' according to an annual holiday practices survey by BNA, a business research organization."
(The Kansas City Star)

Webcasts and Conferences

Global Investment Markets: Looking Ahead to 2011
Nationwide on January 11, 2011
presented by Buck Consultants

Press Releases

Newly Posted Employee Benefits Jobs

Senior Plan Consultant
for Scholz, Klein & Friends Enlightened Retirement Group, Inc.
in TX

Pension Administrator
for Small employee benefits consulting/TPA firm
in PA

Retirement Education Specialist
for The Newport Group
in NC

Director of Benefits
for Metro Transit - St. Louis
in MO

Director, Financial Reporting
for Transamerica Retirement Services
in CA

IT&C Relationship Manager 4
for U.S. Bank
in MO

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