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Retirement Plans Newsletter

December 30, 2010

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[Official Guidance]
Text of IRS Notice 2011-6: Form 5500 Declared Exempt from PTIN Requirement (PDF)
14 pages. Excerpt: "An individual must obtain a PTIN to prepare for compensation all or substantially all of any form except those specifically identified by the IRS as not subject to the requirements of §1.6109-2. At this time, the IRS identifies the following forms as not subject to the requirements of §1.6109-2: . . . . Form 5300, Application for Determination for Employee Benefit Plan; Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans; Form 5310, Application for Determination for Terminating Plan; Form 5500 series; . . . . Form 8717 User Fee for Employee Plan Determination, Opinion, and Advisory Letter Request; . . . ."
(U.S. Internal Revenue Service)

[Guidance Overview]
Supermarket Stock Drop Case Remains Alive
Excerpt: "[The District Court held that the plaintiff] can move forward with claims the fiduciaries acted imprudently by not liquidating company real estate holdings when market conditions were more favorable as well as by not properly monitoring the impact of the value of those real estate holdings on the value of the plan's company stock."

The Federal Employee Retirement Annuity: High Five vs. High Three
Excerpt: "The deficit commission has proposed changing federal retirement to use the highest five years of earnings to calculate civil service pension benefits for new retirees (CSRS and FERS), rather than the highest three years prescribed under current law. The purpose is to bring the benefit calculation in line with the private sector standard."
(FedSmith Inc.)

New York and Ohio State Pension Funds Named As BP Oil Spill Suit Lead Plaintiffs
Excerpt: "The state pension funds 'argue more generally that BP made fraudulent statements between 2005 and 2010 about its safety precautions in the Gulf of Mexico and elsewhere,' . . . ."

Report from 2010 National Tax Sheltered Accounts Association 403(b) Compliance Resolution Summit, May 10 - 12, 2010
Excerpt: "More than 100 third party administrators, consultants, product providers and financial advisors met in Chicago for the 2010 NTSAA 403(b) Compliance Resolution Summit. Individuals from The SPARK Institute, the Internal Revenue Service, the Association of School Business Officials and law firms were also on hand to lend their expertise during the course of in-depth discussions of current compliance issues for 403(b) plans in an effort to establish best practices for the resolution of those issues."
(American Society of Pension Professionals & Actuaries)

Lehman Sued by Its Retirement Plan Participants
Excerpt: "Lehman Brothers' 401(k) retirement plan and its participants sued in September ex-Chief Executive Officer Richard Fuld and other former executives of the defunct firm for failing to disclose Repo 105, a financing method allegedly used to conceal billions of dollars of debt."

Lawyer Entitled to 401(k) Distribution
Excerpt: "A lawyer accused of financial wrongdoing should receive a 401(k) distribution of his plan savings from his old law firm, but not the employer's contributions, a federal judge in California has ruled."

ASPPA Comments on Form 8955-SSA, Annual Registration Statement Identifying Participants with Deferred Vested Benefits and the Accompanying Instructions
8 pages. Excerpt: "The Form 8955-SSA replaces the Schedule SSA to the Form 5500. The comments provide recommendations as to how to clarify the instructions and improve the filing process."
(American Society of Pension Professionals & Actuaries)

The Cost of Retirement Security in America
Excerpt: "One way to distill the debate over the sustainability of retirement security in the United States is to evaluate the absolute amount of money that will be paid out each year for public sector pensions vs. social security. Doing this removes the necessity to debate what rate at which public employee pension funds can earn investment returns in the market, which presumably diminishes the amount taxpayers have to contribute to fund these pensions. Instead of evaluating how much money has to go in to fund retirement benefits, this post evaluates how much will come out in actual retirement payments."

It's 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]
Cash-Settled Restricted Stock Units: Section 409A Leads to Valuation Disagreement
Excerpt: "How does one value a cash-settled RSU where payment is delayed for six months under the Section 409A rules? Does one use the value of the stock on the date of distribution, following the six month delay? Or is it instead proper to value the stock at the time of the executive's retirement that triggered the payment, ignoring the six month delay?"
(Utz, Miller & Eickman, LLC)

[Guidance Overview]
IRS Guidance on the Deduction Limitation for Executive Compensation of Code Section 162(m)(6) (PDF)
4 pages. Excerpt: "Even with the guidance under Notice 2011-02, several significant questions remain regarding the application of Code section 162(m)(6). Accordingly, the Treasury Department and the IRS have requested comments on the application of the Notice, as well as all aspects of the application of Code section 162(m)(6). The agencies have specifically requested guidance on the application of the deduction limit to captive insurance companies, reinsurers that do not operate in the indemnity market, and certain stop loss insurance arrangements that may constitute direct insurance because the attachment point is so low."
(Sutherland Asbill & Brennan LLP)

Tax Legislation Affects Employee Benefits, Social Security Taxes and Individual Retirement Accounts
Excerpt: "Section 127 of the Internal Revenue Code of 1986 . . . permits an employee to exclude from income up to $5,250 annually for educational assistance benefits (such as tuition, fees, books and supplies) incurred by the employer on behalf of the employee."
(McGuireWoods LLP)

Top 11 Regulatory Changes for Small Business in 2011
Excerpt: "The start of the New Year ushers in a series of new regulatory, compliance and legislative changes that could potentially affect every small business. Payroll processor Paychex has released a list of the top 11 regulatory issues facing small businesses in 2011."
(Employee Benefit News; one-time free registration required)

A 2011 Human Resources Forecast
Excerpt: "I am not really big on making 'lists' so you will not see from me lists of the good or bad or best or whatever. However, I am big on forecasts and I thought this one was good. It is from the Herman Trend Alert and is reproduced with permission."
(Omega HR Solutions, Inc.)

Press Releases

Newly Posted Employee Benefits Jobs

Benefits Consultant
for Corporate Synergies Group
in MD, PA

Regional Sales Manager
for Corporate Synergies Group
in MD

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