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Retirement Plans Newsletter

December 23, 2010

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[Official Guidance]
Text of IRS Employee Plans News - December 22, 2010 (PDF)
2 pages. In this edition of the Employee Plans News: Funding Relief for Single-Employer Defined Benefit Plans - Alternative funding shortfall amortization schedules for single-employer DB plans under Notice 2011-3.
(U.S. Internal Revenue Service)

[Guidance Overview]
2010 Year End Update on Maintaining Benefit Plan Documents
Excerpt: "What are the deadlines for the EGTRRA Restatement of qualified plans? Current IRS procedures impose different deadlines depending on the types of plans."
(SunGard Relius)

[Guidance Overview]
Participant Fee Disclosure Regulations: General Plan Disclosures
Excerpt: "This technical update begins discussion of specific disclosures the plan administrator must provide to participants, and includes a discussion of the timing and method of annual disclosures."
(SunGard Relius)

[Guidance Overview]
IRS Expansion of Availability of Rev. Rul. 81-100 Group Trusts, and Extension of Time to Spin Off Puerto Rican Participants from U.S. Plans (PDF)
4 pages. Excerpt: "In Rev. Rul. 2011-1, released in advance form on December 16, 2010, the Internal Revenue Service (the Service) expanded the types of employee benefit plans that may participate in Rev. Rul. 81-100 group trusts, effective January 11, 2011, and extended until December 31, 2011, the time to spin off the assets related to Puerto Rican participants in a U.S. qualified retirement plan to a separate Puerto Rico plan."
(Sutherland Asbill & Brennan LLP)

[Guidance Overview]
Will DOL's New Mutual Fund Fee Disclosures Mislead 401k Investors?
Excerpt: "[Ary Rosenbaum, Managing Partner at The Rosenbaum Law Firm P.C.] sums up the thinking of many experienced professionals when he says 'The DOL fee disclosures are good for the industry. However, how long and how much will it cost plan providers to provide this information and will plan sponsors actually take the time to read these disclosures? It's been my view that fee disclosure will actually create more fiduciary liability because plan sponsors who ignore fees in breaching their fiduciary role now have no excuse not to know about fees since the information will be provided.'"
(Fiduciary News)

[Guidance Overview]
What to Do if You Receive a CP 213 Notice
Excerpt: "If you receive a CP 213 Notice, you probably filed an incomplete Form 5500 -- or didn't file on time. The IRS sends the notice to notify filers of a 'proposed' IRS penalty due to a late or incomplete Form 5500, 5500-SF or Form 5500-EZ return."
(Thompson Publishing Group Inc.)

[Guidance Overview]
DOL Proposal of Enhanced Target Date Retirement Fund and Default Investment Disclosures (PDF)
2 pages. The proposed rules would apply to plans covered by ERISA.
(Milliman, Inc.)

EBSA Sets 2011 Hearing on Fiduciary Definition Change
Excerpt: "An EBSA news release said the session will be March 1 and, if necessary, March 2 in Washington. According to the announcement, the department expects to issue a formal notice with details on the public hearing and the submission of requests to testify in early January 2011."

Post-Retirement Adjustments in Defined Benefit Pensions (PDF)
22 pages. Excerpt: "In analyzing changes in pension benefits reported by HRS respondents between 1994 and 2008, I find annual increases that are about one third of the increase in the CPI. The increases are concentrated among respondents who report that their benefits are adjusted for inflation. They are larger for workers in public administration than in other industries; perhaps surprisingly, they are not larger in jobs covered by union contracts than those in the non-union sector."
(University of Michigan Retirement Research Center)

401(k) Participants Shun Company Stock
Excerpt: "The share of 401(k) assets allocated to company stock fell in 2009 for the 11th consecutive year, according to a new study by the Employee Benefits Research Institute (EBRI)."

IRS Releases Its Priority Guidance Plan
Excerpt: "As explained in the release, the Priority Guidance Plan is flexible and is expected to be updated and republished as this year (i.e., the period from July 2010 through June 2011) progresses, in order to incorporate additional items that may become a priority."
(Deloitte via

ETFs In 401(k)s
Excerpt: "The only reason ETFs haven't kicked funds to the curb in 401(k)s is really record-keeping. 401(k) accounting systems are designed for end-of-day batch transactions and fractional shares. That way, employees can know that $500 goes to their favorite fund, without worrying about how many shares that gets them. It's kind of the whole point of regular investing -- fire and forget. ETFs confound this: They trade intraday, and they trade in whole shares."

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Sponsored by NTSAA

Benefits in General; Executive Compensation

[Official Guidance]
Text of IRS Notice 2011-02: Deduction Guidance on Payments to Insurance Providers by Highly Compensated (PDF)
8 pages. Excerpt: "This notice provides guidance on the application of section 162(m)(6) of the Internal Revenue Code . . . . Section 162(m)(6) limits the allowable deduction for remuneration for services provided by individuals to certain health insurance providers. Section 162(m)(6) was added to the Code by section 9014 of the Patient Protection and Affordable Care Act (Public Law 111-148, 124 Stat. 119, 868 (2010))."
(U.S. Internal Revenue Service)

[Guidance Overview]
IRS Expansion of Scope of Section 409A Relief Under Notice 2010-80
Excerpt: "This additional guidance is helpful, but areas of uncertainty remain. In particular, relief would be helpful with respect to linked nonqualified and qualified plans where linked time and form of payment issues may not have been recognized."
(Dorsey & Whitney LLP)

[Guidance Overview]
Distribution of Top-Hat Plan Funds to Participants Was Not Permitted Until Determination of Employer's Solvency
Excerpt: "The appellate court found that its interpretation of the plan did not conflict with any other provision of the plan. Just because plan assets became 'payable' upon plan termination did not mean the employer could actually pay the participants if the employer was insolvent at the time of payment. The court explained that the plan provided that the employer could not distribute plan assets to the participants under those circumstances."
(Wolters Kluwer)

[Guidance Overview]
Treasury's 2010-2011 Priority Guidance Plan (PDF)
6 pages. Excerpt: "The Treasury and the IRS have issued their 2010-2011 priority guidance plan. The plan is released annually and reflects the guidance that IRS and Treasury have issued or intend to issue between July 1, 2010 and June 30, 2011. Treasury has already released some of the employee benefit-related items."
(Buck Consultants)

Webcasts and Conferences

Release Us! --- Section 409A and Releases
Nationwide on February 2, 2011
presented by BNA, Inc.

Press Releases

Newly Posted Employee Benefits Jobs

401K/Qualified Plan Sales Consultant
for Brown & Brown of Detroit, Inc.
in MI

Employee Benefits Producer
for Brown & Brown of Detroit, Inc.
in MI

401 (k) Plan Administrator
for TravisWolff, LLP
in TX

Retirement Plan Consultant
for Mountjoy Chilton Medley LLP
in KY

Enrolled Actuary
for Continental Benefits Group, Inc.

Implementation Manager
for The Standard

VP, E-Marketing
for Prudential
in CT, NJ

Manager, Prudential Retirement
for Prudential
in IA

Benefits Manager
for Ambrose
in NY

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