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January 14, 2011 Health & Welfare Plans Newsletter  |  Advertise  |  Unsubscribe

[Official Guidance]
Text of Final Rule Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits (PDF) – 2 pages. "This final rule amends [PBGC's] regulation on Benefits Payable in Terminated Single-Employer Plans to prescribe interest assumptions under the regulation for valuation dates in February 2011." (Pension Benefit Guaranty Corporation)

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[Official Guidance]
Cancellation of Notice of Public Hearing on Proposed Rulemaking on User Fees Relating to Enrolled Agents and Enrolled Retirement Plan Agents (PDF) – "The public hearing, originally scheduled for January 14, 2011, at 10 a.m., is cancelled." (U.S. Internal Revenue Service)

[Guidance Overview]
Participant Fee Disclosure Regulations: Investment Disclosures – "This Technical Update discusses [various] disclosures which apply in specified situations, and the timing and method of investment disclosure." (SunGard Relius)

Designating a QDIA – "Ultimately, when it comes to choosing a default investment, plan sponsors should understand that all fiduciary decisions involve some level of risk and the best they can do is seek to balance that risk against potential benefits to participants. The safe-harbor fiduciary protections afforded by using a QDIA as a plan default can help balance the risks in a way that's beneficial to both participants and plan sponsors." (The Vanguard Group)

A Retirement Contribution Rate Calculator – "Are you maximizing the value of your employer-sponsored retirement plan? Try using this contribution rate calculator to see the long-term financial impact of small increases in your contribution rates." (ING North America Insurance Corporation)

AT&T Changes Benefit Accounting Procedures for Recognizing Actuarial Gains and Losses for Pension and Other Postretirement Benefits – "An AT&T news release said the gains and losses will now be recognized in the year in which they are incurred, rather than amortized over a period of many years, and recorded on the income statement in the fourth quarter each year." (PLANSPONSOR.COM)

Mercer Suggests 2011 New Year's Resolutions for Defined Contribution Sponsors – "The resolutions include: Participant Fee Disclosure. New rules are coming in 2012. Determine what's required, who's responsible and how to integrate the new requirements with other plan communications." (PLANSPONSOR.COM)

Industry Group Says Hybrid Plan Rules Should Encourage Plan Creation – "The ERISA Industry Committee . . . has submitted to the Treasury Department and Internal Revenue Service . . . a series of six comment letters on proposed and final regulations about cash balance and other hybrid plans." (PLANSPONSOR.COM)

Oregon Public Employees Retirement System Proposals Target Employee Benefits – "The state House of Representatives had first readings on nearly 20 bills related to PERS by Tuesday. Nearly all of the bills seek to cut public employees' retirement benefits in order to rein in the cost of PERS." (Statesman Journal)

NCPERS Response to WSJ Essay on Teacher Pensions (PDF) – 1 page. "Joel Klein's critique of defined benefit pensions ('Why Teacher Pensions Don't Work') offers a biased and incomplete review of the state of public pensions." (National Conference on Public Employee Retirement Systems)

SPARK Institute Comment Letter Re: Target Date Fund Disclosure Rule (PDF) – 7 pages. "The Proposed Regulation requires the plan administrator to provide an explanation of the fund's asset allocation, how the asset allocation will change over time, and the point in time that the fund will reach its most conservative asset allocation. The Proposed Regulation also requires the plan administrator to include a chart, table or other graphical representation that illustrates the change in asset allocation over time and 'does not obscure or impede a participant's or beneficiary's understanding of the information explained pursuant to the [applicable section].' (Emphasis added.)" (The SPARK Institute)

ERIC Comment Letters on Regulations Implementing the Cash Balance and Pension Equity Plan Provisions of PPA '06 – "The ERISA Industry Committee . . . on January 12 submitted to the Treasury Department and Internal Revenue Service a series of six comment letters on proposed and final regulations implementing the cash balance and pension equity plan provisions of the Pension Protection Act of 2006 . . ., as amended by the Worker, Retiree, and Employer Recovery Act of 2008 . . . . ERIC's comment letters can be accessed by clicking on [links in the target page]." (The ERISA Industry Committee)

Target Date Funds: What's in a Name? – "Unfortunately, there is no standard across the various TDFs as to the significance of the date used in the fund name. For example, the 'target date' which is incorporated in the fund's name could refer to the date by which the fund has liquidated the entire equity portion of its investment portfolio. It could, on the other hand, refer to the date at which the equity portion of the investment portfolio is at its lowest point in the entire life of the fund." (The Bureau of National Affairs)

ASPPA Comments on Proposed Additional Rules Regarding Hybrid Retirement Plans – 13 pages. "The following is a summary of ASPPA COPA's recommendations which are described in greater detail in the Discussion of Issue section. [There are fifteen recommendations.]" (American Society of Pension Professionals & Actuaries)

American Academy of Actuaries Comments Regarding Proposed Regulations for Hybrid Retirement Plans (PDF) – 14 pages. "The Committee appreciates the opportunity to comment on the proposed regulations as well as the series of thoughtful questions posed to respondents. Also included in this letter are some items of concern for which we believe the proposed regulations may lead to undesirable consequences or unintended results." (American Academy of Actuaries)

American Benefits Council Comment Letter to DOL Regarding Target Date Fund Amendments (PDF) – 4 pages. "The American Benefits Council (Council) appreciates the opportunity to comment on the Department of Labor's proposed regulatory amendments of earlier regulations on (1) qualified default investment alternatives (QDIA) under participant directed individual account plans and (2) participant fee disclosure." (American Benefits Council)

American Benefits Council Letter Regarding Additional IRS Rules on Hybrid Plans (PDF) – 14 pages. "We have the following four overarching comments on the proposed regulations, as well as numerous important technical points discussed [in the target document]." (American Benefits Council)

Target Date Funds and Truth In Labeling – "My biggest problem with target date funds is that they had no labeling requirements so participants were led to believe that a 2015 or 2020 had little or no equity exposure in 2008, only to suffer huge investment losses. A 2020 fund from Vanguard could have a totally different glide path or equity mix than a 2020 fund from Fidelity." (The Rosenbaum Law Firm P.C. Blog)

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Benefits in General; Executive Compensation

EBSA Publishes Regulatory Agenda – "Listed [here] are the items in the most recent agenda, arranged by their completion status." (Wolters Kluwer)

IRS Semiannual Regulatory Agenda Includes Additional Guidance on Funding Rules – "The IRS has released its semiannual regulatory agenda for Fall 2010, which includes pension and benefit regulations that are currently under development or review." (Wolters Kluwer)

Coalition of Federal Employee Organizations' Letter Opposing Cuts in Benefits Carries Risk – "[A coalition] has asked President Obama to reject proposals to cut health and retirement benefits, reduce the federal workforce by 10 percent and freeze pay for three years. The recommendations were made in December by the bipartisan National Commission on Fiscal Responsibility and Reform." (The Washington Post; one-time registration required)

Press Releases

US Labor Department Obtains Court-Appointed Independent Fiduciary For 401(k) Plan Of Defunct Canton, Mass., Company U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

ERIC Urges Treasury to Develop Workable Set of Rules in Implementing Hybrid Retirement Plan Regulations ERIC (ERISA Industry Committee)

ASPPA Issues Comments to DOL on Target Date Funds American Society of Pension Professionals & Actuaries (ASPPA)

Financial Research Corporation Adds Retirement Income Practice Leader Financial Research Corporation

Aon Hewitt Analysis Shows Modest Gains in Global Pension Funding Levels in 2010 Aon Corporation

Vince Giovinazzo to Open 401(k) Rekon Elite Advisor Series (EAS) 401k Rekon

Constangy, Brooks & Smith Expands Employee Benefits Practice With New Partner in its Fairfax Office Constangy, Brooks & Smith, LLP

SmartMoney Recommends Retiree Inc.'s Advice in Making Savings Last Longer Retiree Inc.

Financial Planners Are Key to Retirement Success, Regardless of Age

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Who Is a Tax Dependent Now? Compliance for Employer Plans After Health Care Reform
in California on January 13, 2011 EBIA / Thomson Reuters

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