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Retirement Plans Newsletter

December 14, 2010

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Fees have captured the attention of the DOL in earnest with three sets of major regulations. Our agenda reflects the latest updates, including: service provider fee disclosure regulations, participant fee disclosure rules, designing service agreements, DB and cash balance plans for DC practitioners, EFAST2, plan correction, new PTIN rules, Washington update, and more. Earn up to 950 minutes of CE credits including 1 ethics hour. Register by January 10 and save $150.

[Official Guidance]
Text of IRS Notice 2010-90: 2010 Cumulative List of Changes in Plan Qualification Requirements (PDF)
15 pages. Excerpt: "This notice contains the 2010 Cumulative List of Changes in Plan Qualification Requirements . . . to be used by plan sponsors and practitioners submitting determination, opinion, or advisory letter applications for plans during the period beginning February 1, 2011 and ending January 31, 2012. These plans will primarily be (1) single employer individually designed defined contribution plans, including employee stock ownership plans (ESOPs), and single employer individually designed defined benefit plans that are in Cycle A and (2) defined contribution pre-approved plans (that is, defined contribution plans that are master and prototype (M&P) or volume submitter (VS) plans) for the second submission under the remedial amendment cycle under Rev. Proc. 2007-44. Generally, an individually designed plan is in Cycle A if the last digit of the employer identification number of the plan sponsor is 1 or 6."
(U.S. Internal Revenue Service)

[Guidance Overview]
Final and Proposed Regulations Affecting Cash Balance Plans (PDF)
5 pages. Excerpt: "The final regulations include safe-harbor rules for the age discrimination requirements. They are consistent with earlier PPA guidance that was issued in the form of IRS Notice 2007-6 . . . and proposed regulations issued in 2007."
(The Vanguard Group)

[Guidance Overview]
IRS Extension of Deadline for Adopting Certain Retirement Plan Amendments (PDF)
3 pages. Excerpt: "This IRS Notice extends the deadline for amending qualified defined benefit pension plans to meet the requirements of: The funding-based limits on benefits and benefit accruals under Sections 401(a) (29) and 436 of the Internal Revenue Code of 1986, as amended (the Code); and The vesting and other special rules under Sections 411(a)(13) (other than Section 411(a)(13)(A)) and 411(b)(5) of the Code that apply to certain hybrid defined benefit plans."
(Drinker Biddle & Reath LLP)

[Guidance Overview]
Tribune Corporation's ESOP Trustee Violated Its Fiduciary Duties
Excerpt: "In the stock purchase at issue in this case, the ESOP did not acquire any QES; it was not, therefore, designed to invest primarily in QES. The ESOP's purchase of unregistered stock subject to a trading restriction did not meet the definition of employer security found in Section 409(l). Therefore, in the court's view, the purchase was a transaction expressly prohibited by ERISA."

[Guidance Overview]
Deadline for Amending Defined Benefit Plans Extended to Plans Years Beginning on or After Jan. 1, 2011
Excerpt: "Prior to this extension, the deadline for adopting certain defined benefit plan amendments was the last day of the first plan year beginning on or after Jan. 1, 2010 . . . ."
(Wolters Kluwer)

[Guidance Overview]
Court Dismisses Remaining State Street Stock Drop Claim
Excerpt: "[The District Court judge] dismissed a charge that the company had breached its [ERISA] fiduciary duty by negligently misrepresenting the quality of its investment portfolio in a Securities and Exchange Commission regulatory filing and an October 2008 news release."

Legislation Aimed to Protect the Privacy of Social Security Numbers Cleared Congress
Excerpt: "On December 8, 2010, the House of Representative approved without amendment, the Social Security Number Protection Act, aimed at reducing identity theft through protecting the privacy of social security numbers."
(Nixon Peabody LLP)

Pension Funding Index as of November 2010
Excerpt: "The funded status of the largest 100 U.S. corporate defined benefit pension plans fell by $22 bil.lion in November 2010, bringing the deficit to $335 bil.lion. The decline was a reflection of poor financial market performance overall in November, and specifically a drop in corporate bond interest rates."
(Milliman, Inc.)

U.S. Senate Launches Investigation Into Securities Lending
Excerpt: "The US Senate's Special Committee on Aging has launched an investigation into the securities lending practices of pension funds and is considering an official hearing on the matter, according to a new report."

Effect of Informal Care on Work, Wages, and Wealth
Excerpt: "[T]his project identifies the relationship between informal care and labor force participation in the United States, both on the intensive and extensive margins, and whether there are wage penalties from informal care. We use our results to examine retirement wealth effects, in particular, changes in Social Security benefits . . . ."
(Center for Retirement Research at Boston College)

Half of Maryland's Teacher Pension Costs Would Shift to Counties Under Plan
Excerpt: "Maryland counties would begin paying 50 percent of all teacher pension costs -- now paid for entirely by the state -- to the tune of $500 mil.lion in fiscal 2012 under a proposal the state's pension commission is reviewing this week."
(Washington Examiner)

Investment Firm Ordered to Restore $1M to Union Pension Fund
Excerpt: "The U.S. Department of Labor has gotten a court order requiring C.S. Capital Management Inc. of Atlanta, Georgia, and owner Paul H. Saylor to restore just over $1 mil.lion to the Plumbers and Pipefitters National Pension Plan."

Accounting Proposals Present Obstacles for Multiemployer Plan Sponsors
Excerpt: "There is concern that, if finalized in their present form, the proposed rules would have significant adverse consequences to those contributing employers, the unions that represent their employees, the multiemployer plans that provide benefits to their employees, and the users of the financial statements who may be misled by the information presented."
(Groom Law Group)

Earn your missing CPE credits for the 2009/2010 cycle. Get the latest on hot regulatory and technical issues all at your convenience with ASPPA's webcasts. Topics include: hybrid plans, participant fee disclosure, cash balance plan basics, redefining fiduciary status, the 2009 5500 process and much more! Visit for more information and to register.
Sponsored by ASPPA

Benefits in General; Executive Compensation

Business Owner Market Study: Priorities vs. Plans (PDF)
14 pages. Excerpt: "The survey found that business owners' stated priorities often don't match the benefits they actually possess for the business or themselves, or those they offer to their employees."
(Principal Financial Services, Inc.)

Alternatives to Company Holiday Parties This Season
Excerpt: "[One organization] compiled a Top Ten list of budget-friendly activities that HR professionals can use to acknowledge staff productivity and promote employee satisfaction this holiday season. The list includes events such as providing free, in-house flu shots, organizing a food drive for a local charity and instituting something called 'holiday half-days.'"
(Human Resource Executive Online)

University of California Regents Seek to Cut Retirees' Pension Eligibility and Health Benefits
Excerpt: "Under the proposals, employees hired after July 2013 would see the minimum age for early retirement rise from 50 to 55 and the age to receive maximum benefits increase from 60 to 65. In addition, all employees would pay higher premiums for post-retirement health plans."
(Los Angeles Times)

Employee Tenure Trend Lines, 1983-2010 (PDF)
Pages 2-12 of 20 pages. Excerpt: "The tenure results presented in this report indicate that, historically, most workers have repeatedly changed jobs during their working careers, and all evidence suggests that they will continue to do so in the future. This has major implications for pensions (which do not reward short-tenure workers), lump-sum distributions from 401(k) plans (which can put workers' retirement savings at risk), and public policy[.]"
(Employee Benefit Research Institute)

The Moral Case for Unions-Protecting Working Families from Exploitation-Does Not Apply to Public Employment
Excerpt: "Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector. And across the country, at every level of government, the pattern is the same: Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt."
(Tim Pawlenty via The Wall Street Journal)

Webcasts and Conferences

In-Plan Roth Rollover Free Phone Forum
Nationwide on December 20, 2010
presented by Internal Revenue Service (IRS)

The CFDD's 2011 Advisor Conference
in Illinois on October 17, 2011
presented by Center for Due Diligence

Press Releases

Interest in Behavior-Changing Financial Incentives Declines in 2010
Employee Benefit Research Institute (EBRI)

Newly Posted Employee Benefits Jobs

Compliance Specialist - Retirement Plans
for General Board of Pension and Health Benefits
in IL

Senior Plan Analyst - Defined Contribution
for National Life Group

Retirement Plan Account Manager
for Johnson & Dugan
in CA

Director, Plan Conversions
for Sentinel Benefits and Financial Group
in MA

Enrolled Actuary
for ExpertPlan, Inc.
in NJ

Group Supervisor, Benefits & Employee Records
for Jet Propulsion Laboratory
in CA

Pension Administrator
for Mercer Advisors
in AZ

Voluntary Benefits Sales Specialist
for Northwestern Benefit Corporation of Georgia
in GA

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