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Retirement Plans Newsletter

December 22, 2010

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DB Administration, Discrimination Testing and Proposal software with Multiple Plan and Cash Balance Plan handling. PPA'06 Pension Funding.
* Funding Target and Target Normal Cost with 3-rate segments
* 404(o) Cushion; 430 minimum and 404(o) maximum contributions
* Funding Target Attainment Percentages (FTAPs)
Schedule SB reports and links to our 5500/PBGC System, and our FAS 158 and Termination Calculation reporting systems. or call 1-888-328-2474

[Guidance Overview]
In-Plan Roth Rollovers: New Tax Planning Opportunities (PDF)
6 pages. Excerpt: "In-plan Roth rollovers under a 401(k) or 403(b) plan are reported on IRS Form 1099-R."
(Patterson Belknap Webb & Tyler LLP)

[Guidance Overview]
DOL's Proposed New Disclosure Requirements for QDIAs and Target Date Funds (PDF)
3 pages. Excerpt: "The DOL has issued proposed regulations that would require plan fiduciaries to make additional disclosures to participants and beneficiaries with respect to all QDIAs as well as with respect to target date funds (whether or not they are a plan's QDIA)."
(Buck Consultants)

[Guidance Overview]
Court Approves $8.5M Settlement for Schering-Plough Participants in Stock Drop Suit
Excerpt: "[A U.S. District Judge] approved the settlement for 'all persons (excluding defendants) who were participants in or beneficiaries (including alternate payees) of the [Schering-Plough Employees' Savings Plan] at any time between July 29, 1998, and April 18, 2007, and whose accounts included investment in the company stock fund at any point during that time period.'"

[Guidance Overview]
IRS's 2010 Cumulative List of Changes for Cycle A and Pre-Approved Plans
Excerpt: "Sponsors of Cycle A plans, pre-approved plan submitters, and their advisors, should carefully review the 2010 Cumulative List to ensure that their submissions address the issues the IRS has specifically identified for review. Of course, to be qualified, plans must comply with all relevant qualification requirements, even those that are not on the list."
(Employee Benefits Institute of America)

The Big Financial Stretch: Preparing for Those Later Decades
Excerpt: "Americans don't think enough about retirement in general -- from how they will afford it to how they plan to pass the time when regular work ends. A survey . . . found that fewer than half of those polled have tried to calculate how much they will need to live on in retirement."
(Wharton School of the University of Pennsylvania)

Understanding 401(k) Fees and Making Every Basis Point Count
Excerpt: "In this article reprinted with permission from the Fourth Quarter 2010 issue of Benefits Quarterly, Aon Hewitt retirement expert Pam Hess and her co-author Valerie M. Kupferschmidt discuss the components of Total Plan Cost in DC plans, along with methods to reduce them."
(Aon Hewitt)

Responding to the Downturn: How Does Information Change Behavior?
Excerpt: "After answering basic questions about financial well-being and reactions to the stock market downturn, the respondents were told, 'If the financial decline is not reversed, the loss in retirement savings means households must: save more; work longer (retire later or work in retirement); and/or have less in retirement (spending less or leaving less as an inheritance). Indicate what you think those changes would be.'"
(Center for Retirement Research at Boston College)

2011 Pension Preview: Challenges and Changes (PDF)
24 pages. Excerpt: "To put [the Challenges and Changes] themes into context, aggregate funded status for the US plans of S&P 500 companies remains depressed. We estimate funded status as of late November 2010 to be approximately 82%, in-line with where it was at the end of 2009 despite the notable rise in share prices in recent months and significant contributions made by some plan sponsors this year . . . ."
(The Goldman Sachs Group, Inc.)

Maryland Panel Recommends Sweeping Retirement Benefit Changes for Public Employees
Excerpt: "Maryland state workers would have to work for 15 years instead of the current five to become eligible for pension or retiree health care benefits, according to new recommendations from a study panel. An Associated Press news report said the Public Employees' & Retirees' Benefit Sustainability Commission is also recommending that state employees would have to spend 25 years working for the state, instead of 16 years, to receive the maximum retiree health care premium subsidy and put in 10 years instead of five to become pension vested."

BrightScope 2010 Top 30 401k Plans
Excerpt: "BrightScope's Top 30 list comprises large 401k plans with high overall quality, as measured by the BrightScope Rating. The BrightScope Rating measures how effective a 401k plan is at getting its participants to retirement."
(BrightScope Inc.)

IRS Extends Deadline for Puerto Rico Retirement Plan Spinoffs
Excerpt: "A new one-year extension gives retirement plan sponsors until Dec. 31, 2011, to transfer Puerto Rico (PR) residents to a separate PR plan. PR spinoffs may offer advantages under Rev. Rul. 2008-40 but may not be cost-effective unless PR trusts can invest in US group trusts or similar vehicles."
(Mercer LLC)

Regulators Consider Broadening Benefit Plans' Exemption from Swaps Restrictions
Excerpt: "[T]he SEC and Commodity Futures Trading Commission are seeking input on whether to interpret this exclusion broadly enough to cover plans using swaps for portfolio rebalancing or to gain exposure to other asset classes, or cover entities such as VEBAs, group trusts or bank collective trusts."
(Mercer LLC)

DOL's New Performance Reporting Requirements: A Boon or a Risk to the 401k Fiduciary?
Excerpt: "The 401k fiduciary just might find these new disclosure rules could increase fiduciary liability . . . ."
(Fiduciary News)

Itís 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]
Employers Face New ISO, ESPP Reporting Responsibilities in Early 2011
Excerpt: "Many employers maintaining incentive stock option (ISO) arrangements or Section 423 employee stock purchase plans (ESPPs) must begin using new IRS forms in early 2011 for transactions occurring in 2010."
(Mercer LLC)

[Guidance Overview]
Impact of the 2010 Tax Relief Act on Stock Compensation and Year-End Financial Planning
Excerpt: "[This article addresses eight key points related to equity compensation and year-end planning]. Also included are the long-awaited AMT income exemption amounts for 2010 (and 2011), which were part of in the tax bill passed by Congress on Dec. 16."
(, Inc.)

[Guidance Overview]
ISS FAQs on Shareholder Say on Parachute Payments
Excerpt: "[M]any companies have decided not to include the golden parachute vote in their 2011 annual meeting proxy statements because of the unnecessary attention that vote could draw from ISS. ISS confirms its position on this matter in its [FAQs that were updated on December 14.]"
(Michael S. Melbinger via Winston & Strawn LLP)

[Guidance Overview]
ISS FAQs on 2011 SSOP Voting and Other Executive Compensation Issues
Excerpt: "[One of the FAQs is:] In the event that a company's board decides not to adopt the say on pay vote frequency supported by a plurality of the votes cast, what are the implications in terms of ISS' voting recommendations at subsequent meetings? [The ISS answer is:] This policy has not been determined. The policy will be decided after review of the first year of voting results and after consultation with ISS's clients, and will be included in the policy updates for 2012."
(Michael S. Melbinger via Winston & Strawn LLP)

[Guidance Overview]
Transit Pass Requirements Postponed Until 2012
Excerpt: "As with the prior extensions the Notice states that, notwithstanding the new January 1, 2012 effective date, employers and employees may rely on Revenue Ruling 2006-57 for transactions that occur before that date."
(Deloitte via

[Guidance Overview]
IRS Delays Effective Date of Electronic Payment Card Guidance for Transit Expenses Until 2012
Excerpt: "This delayed effective date is good news for third-party administrators and employers offering qualified transportation fringe benefit plans where local transit systems are still not in compliance with the technological requirements for vouchers (presumably, the need for single-purpose cards or cards with separate 'purses' for transit versus parking expenses)."
(Employee Benefits Institute of America)

Text of the Report, 'Estimates of Federal Tax Expenditures for Fiscal Years 2010-2014'
Excerpt: "Each report contains a discussion of the concept of tax expenditures, identification of new tax expenditures enacted into law, a general explanation on how the Staff measures tax expenditures, estimates of tax expenditures, and distributions of selected individual tax expenditures by income class."
(U.S. Congress Joint Committee on Taxation)

Summary of 2011 Payroll Tax and Rates Limits and Filing Deadlines (PDF)
2 pages. Excerpt: "Maximum Social Security Employee Withholding: $6,621.60 (2010); $4,485.60 (2011)"
(Lindquist LLP)

Webcasts and Conferences

Changing the Definition: Who is a Fiduciary Webcast
Nationwide on January 13, 2011
presented by BNA, Inc.

HIPAA Privacy and Security Training: Basic Rules for Handling Group Health Plan PHI
Nationwide on January 27, 2011
presented by EBIA / Thomson Reuters

New IRS Guidance on Multiemployer Pension Plan Funding Relief
Nationwide on January 4, 2011
presented by International Foundation of Employee Benefit Plans

Press Releases

US Secretary Of Labor Hilda L. Solis Announces New Appointments And Leadership For 2011 ERISA Advisory Council
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

US Department Of Labor Agencies To Host Live Web Chats, Conference Call On Regulatory Agendas Between Jan. 4 And 7
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

US Department Of Labor Announces A Public Hearing On Proposed Definition Of Fiduciary Regulation
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

NIRS Selects Executive Director
National Institute on Retirement Security

Newly Posted Employee Benefits Jobs

Internal Sales Consultant
for John Hancock Financial Services
in IL

Client Relationship Manager
for PensionTrend, Inc.
in MI

Pension Administrator and Installation
for Los Angeles Area Firm
in CA

for Weaver Partners, Inc.
in IL

Benefits Manager
for Genuine Parts Company
in GA

Sr. Counsel
for Dominion
in VA

Compliance Consulting Representative
for National Rural Electric Cooperative Association (NRECA)
in VA

Associate Actuary
for Prudential
in CT

Associate Manager, Actuarial
for Prudential
in CT

Sr Actuarial Associate
for Prudential
in CT

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