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Retirement Plans Newsletter

December 20, 2010

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[Official Guidance]
The IRS Employee Plans News, December 17, 2010
In this edition of the EP News: Proposed Extension of Qualified Charitable Distributions; Extended Deadline to Adopt Certain Amendments for Defined Benefit Plans; Unforeseeable Emergency Distributions from 457(b) Plans; Amortization Period Extensions for Multiemployer Plans; Modification of Group Trust Rules; EP Compliance Unit Projects; DOL Corner; and PBGC Insights.
(U.S. Internal Revenue Service)

[Official Guidance]
Text of IRS Notice 2011-3: Funding Relief for Single-Employer Pension Plans Under PRA 2010 (PDF)
46 pages. Excerpt: "Notice 2010-55 (2010-33 I.R.B. 253) states that the Service expects to issue future guidance on the special funding rules under PRA 2010 for single-employer plans. Notice 2010-55 also states that, in the case of a plan year that ends before the guidance is issued, the plan sponsor will be permitted to elect to use an alternative amortization schedule under PRA 2010 without regard to whether the Form 5500 (and Schedule SB) has been filed for that plan year. This notice constitutes the guidance anticipated in Notice 2010-55."
(U.S. Internal Revenue Service)

[Official Guidance]
Text of IRS Notice 1036: Early Release Copies of 2011 Percentage Method Tables for Income Tax Withholding (PDF)
4 pages. Excerpt: "Employers should implement the 2011 withholding tables as soon as possible, but not later than January 31, 2011."
(U.S. Internal Revenue Service)

[Guidance Overview]
IRS Expands Group Trusts
Excerpt: "The Ruling also provides two model amendments that may be used in different circumstances to amend group trusts that comply with current rules (i.e., Revenue Ruling 81-100) so that they may accept contributions from the newly-authorized categories of group trust retiree benefit plans."
(Ford & Harrison LLP)

[Guidance Overview]
Participant Fee Disclosure Regulations: Scope
Excerpt: "The regulations apply to participant-directed defined contribution plans subject to ERISA, which are not otherwise exempt."
(SunGard Relius)

[Guidance Overview]
IRS Guidance on Special Funding Rules for Multiemployer Defined Benefit Plans
Excerpt: "Code Sec. 431(b)(8), as added by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (P.L. 111-192), provides two special funding relief rules available to multiemployer plans: (1) a special amortization rule and (2) a special asset valuation rule."
(Wolters Kluwer)

[Guidance Overview]
The Six Year Submission Cycle Begins Again
Excerpt: "For anyone who writes prototype and volume submitter defined contribution plan documents . . . Notice 2010-90 contains crucial information needed to create the next generation of plan documents. With Notice 2010-90, the next generation of defined contribution plans can finally move from speculation to creation."
(The Pension Protection Act Blog)

Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 12/17/10
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)

Virginia Government Workers Asked to Pay into State Retirement Plan
Excerpt: "[The Virginia governor] will recommend to legislative budget writers that employees covered by the Virginia Retirement System . . . contribute 5% of their pretax salaries toward their pensions beginning next year. At the same time, the state will increase its contribution into the pension plans by about 2%, or about $122 mil.lion . . . ."

DB Discount Rate Reductions May Be in Order for 2010
Excerpt: "The range of discount rates being used by defined benefit plan sponsors continues to widen compared with past years with a 2009 range for pension disclosure that is 20 basis points wider than the previous year."

IRS Releases Pay Withholding Change Guidance
Excerpt: "Notice 1036 contains the percentage method income tax withholding tables, the lower Social Security withholding rate, and related information that most employers need to implement these changes."

Upcoming IRS In-Plan Roth Rollover Phone Forum on December 20, 2010
Excerpt: "[Two Tax Law Specialists] will discuss recent guidance (Notice 2010-84) on in-plan Roth rollovers for 401(k) and 403(b) plans. If you have a specific matter that you would like the speakers to address, please let us know via e-mail at on or before December 16, 2010. [The handout for the 'In-Plan Roth Rollover Phone Forum Presentation' is available at]"
(U.S. Internal Revenue Service)

CalPERS Adopts New Investment Plan
Excerpt: "California Public Employees' Retirement System has adopted a new asset-allocation strategy in order to better prepare for risk-adjusted performance in the investment world."
(American City Business Journals, Inc.)

California Pension Fund Should Restrict Revolving Door, Lawyers Recommend
Excerpt: "Calpers staff and board members who leave should be prohibited for two years from taking a job with any company that was awarded $10 mil.lion or more in business during the previous five years, said a report today from Steptoe & Johnson LLP, the law firm hired to examine practices of the fund, which has $218 bil.lion in assets."
(Bloomberg L.P.)

Annual 401(k) Survey: Retirement Readiness Main Issue (PDF)
66 pages. Excerpt: "Only 15% of surveyed employers believe most employees are or will be prepared for retirement, leaving an astounding 85% that believe some or very few will be prepared for retirement (Exhibit 7.7)."
(Deloitte Development LLC / International Society of Certified Employee Benefit Specialists / International Foundation of Employee Benefit Plans)

Towers Watson-Forbes Insights 2010 Pension Risk Survey
Excerpt: "There is no sign that the decline in the sponsorship of active defined benefit (DB) plans has reversed. Neither is the extinction of DB plans imminent. Instead, the survey shows that most sponsors of active plans will continue to provide retirement benefits, although many will cut back on benefits, and some are indeed seeking to close or freeze. The task for pension plan sponsors, according to respondents, is to take action to manage risk and reduce liabilities."
(Towers Watson)

401(k) and Profit Sharing Plans' Responses to Current Conditions
15 pages. Excerpt: "The majority of plan sponsors and participants [responding to the survey] continued making contributions to their defined contribution plan. Most companies maintained contribution rates during the past three years and some companies increased contributions. Seventy percent of companies maintained matching contributions, and 70.2 percent maintained non-matching company contributions, while just 14.8 percent of companies suspended the match and 10.6 percent suspended the non-matching contribution."
(Profit Sharing / 401k Council of America)

Cultivating a Culture of Fiduciary Responsibility (PDF)
3 pages. Excerpt: "Based on a recently released Randstad Work Watch Survey, Eileen Habelow, PhD., Randstad's senior vice president of organizational development, stated: 'Going forward, companies can't ignore culture. Rather, it should be addressed as a critical component of their overall business strategy.'"
(Pentegra Retirement Services)

Is Not Offering Participant Investment Advice a Fiduciary Decision?
Excerpt: "If the decision to hire an investment adviser is a fiduciary act, then it's arguable that the decision NOT to hire an investment adviser is also a fiduciary decision. I've heard people call this 'two sides of the same fiduciary coin.'"

Its 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

[Guidance Overview]
Temporary Payroll and Benefit Relief Under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (PDF)
3 pages. Excerpt: "The Act extends various tax benefits that were to expire. For example, (i) An adoption credit under EGTRRA is extended through 2012; (ii) Child care credit is extended for 2011 and 2012; (iii) EGTRRA employer provided education assistance exclusion is extended through 2011 and 2012; (iv) Coverdell Educational IRAs continue the EGTRRA $2000 maximum and the availability of for elementary and secondary school expenses through 2011 and 2012; (v) Tax-free distributions from IRAs for charity are extended through 2011."
(Charles C. Shulman, Esq.)

Obama Signs Bill Extending Benefits Tax Breaks
Excerpt: "[The tax-favored status of several employer-provided benefits was passed: 1. allowing] employers to reimburse employees for up to $5,250 in annual undergraduate and graduate educational costs without the reimbursement being included in employees' taxable income . . . . [2. E]mployers are eligible to receive a tax credit equal to 25% of expenses for developing and operating child care centers as well as a tax credit of 10% on expenses for child care and referral services. [3. allowing] employers to provide tax-free reimbursement to employees of about $13,000 of adoption-related expenses[; and, allowing] employees to reduce their salaries and make pretax contributions of up to $230 a month to pay for mass transit expenses."
(Business Insurance)

Top 100 Employment Law Blogs
Excerpt: "[This year's list only includes] blogs written by lawyers, legal professionals, or from a legal perspective. Non-lawyer consultants account for less than 10 of the blogs on this year's list and each of those write consistently on legal issues."
(The Delaware Employment Law Blog)

Federal Work-Life Programs Require Additional OPM Guidance
Excerpt: "The Office of Personnel Management is missing opportunities to help federal agencies develop, implement and improve work-life programs, according to the Government Accountability Office."
(National Journal Group, Inc.)

What Does Tax Cut Deal Mean for Medicare, Social Security and Health Care Reform?
Excerpt: "The larger the deficit, the more compelling the conservative case for shrinking entitlements such as Medicare, Medicaid, Social Security and Health Care reform in 2012."
(The Century Foundation)

Webcasts and Conferences

"Plan Fees: Navigating the Maze Workshop" - Atlanta
in Georgia on January 21, 2011
presented by SunGard Relius

"Plan Fees: Navigating the Maze Workshop" - Charlotte
in North Carolina on January 20, 2011
presented by SunGard Relius

"Plan Fees: Navigating the Maze Workshop" - Houston
in Texas on January 20, 2011
presented by SunGard Relius

"Plan Fees: Navigating the Maze Workshop" - Kansas City
in Kansas on January 21, 2011
presented by SunGard Relius

401(k) Rekon Advisor Symposium- Boca Raton
in Florida on January 27, 2011
presented by 401(k) Rekon

401(k) Rekon Advisor Symposium- Larchmont, NY
in New York on January 27, 2011
presented by 401(k) Rekon

Fiduciary Issues for Internal ESOP Trustees
in Georgia on June 14, 2011
presented by National Center for Employee Ownership

Press Releases

Newly Posted Employee Benefits Jobs

Manager of Benefit Operations
for Arnold & Porter LLP
in DC

Pension Plan Administrator
for DATAIR Employee Benefit Systems, Inc.
in IL

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