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January 25, 2011 Health & Welfare Plans Newsletter  |  Advertise  |  Unsubscribe

[Guidance Overview]
Court OKs Class Actions for ERISA Cases – "With two excessive fee cases to consider, [the court] concluded that situations in which the plan as a whole is injured at the same time as the individual employee can arise when the entity responsible for investing the plan's assets charges fees that are too high or when the plan has been reckless in its selection of investment options for participants." (PLANSPONSOR.COM)


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[Official Guidance]
Text of Correction for Rule on Hybrid Retirement Plans (PDF) – "In rule document 2010-25941 beginning on page 64123 in the issue of Tuesday, October 19, 2010, make the following correction . . . ." (U.S. Internal Revenue Service)

[Guidance Overview]
IRS Further Extends Deadline for Certain PPA Amendments (PDF) – "Sponsors of defined benefit plans, including cash balance plans, should carefully read the guidance described in this newsletter to determine how it applies to their plans." (Prudential Retirement)

[Guidance Overview]
New Jersey Court Dismisses Union Challenges to New Employee Pension Changes Enacted in 2010 – "A news story . . . said the 2010 law required new employees to pay 1.5% of their salaries toward current health benefits and 1.5% of their pensions after they retire. The laws also limited pensions to full-time employees and capped payments of unused sick time to $15,000." (PLANSPONSOR.COM)

Get a Tax-Smart Plan for In-Retirement Withdrawals – "[A] key focus when developing your withdrawal strategy should be preserving the tax-saving benefits of your tax-sheltered investments for as long as you possibly can." (Morningstar, Inc.)

Distributional Effects of Accelerating and Extending the Increase in the Full Retirement Age (PDF) – "This brief compares the effects of two FRA options studied by the Social Security Advisory Board." (U.S. Social Security Administration)

State Government Pension Funds: Case Studies – "This series of case studies focuses on a sample of states [Delaware, Illinois, Iowa, and North Carolina] and what they have done to maintain a funding ratio of over 80 percent in their defined benefit plans, even after the economic downturn of 2008. [States are linked individually at bottom of page.]" (Center for State and Local Government Excellence)

Why Plan Sponsors Fail – "Research in the past several years has illuminated how behavioral economics affects participants, but employers understand a lot less about how it has an impact on employers themselves." (PLANSPONSOR.COM)

The Duty to Understand Mutual Fund Costs – "[Plan sponsors have a duty to select, and continue to use, the appropriate -- or prudent -- share class, b]ecause the wrong share class can cost more money and, as a result, reduce your employees' retirement benefits -- and, ultimately, lower their standard of living in retirement." (Reish & Reicher)

Governors Step Up Rhetoric on Pension Reform – "Among the latest to have publicly endorsed pension reforms, including in their State of the State addresses to legislators this month, are the governors of New Jersey, California, Washington, Virginia and Massachusetts." (Pensions & Investments; registration may be required)

Outcome of ERISA Fiduciary, Fee Disputes Could Mean Changes for Plan Sponsors – "Lawyers involved in specific cases and those watching from the sidelines say a mixture of key recent decisions and settlements plus some expected 2011 rulings will influence sponsors and providers on how they offer investment options and will provide more insight into how to avoid losing a court case based on [ERISA]." (Pensions & Investments; registration may be required)

Obama Won't Endorse Raising Retirement Age or Reducing Social Security Benefits – "Administration officials said Obama is unlikely to specifically endorse any of the deficit commission's recommendations in the speech, but cautioned that he is unlikely to rule them off the table, either." (The Washington Post; one-time registration required)

Maryland Governor's Pension Plan No Promise of Solvency – "The governor has avoided the most radical fixes for Maryland's troubled pension and retiree health care programs. Even so, the proposed reforms are a substantial attempt at addressing one of the state's most alarming financial challenges." (The Baltimore Sun)

Fiduciary News Trending Topics for ERISA Plan Sponsors: Week Ending 1/21/11 – "Each Monday, we'll give you a quick synopsis of the major news events and trends impacting ERISA plan sponsors, 401k fiduciaries and those in the business of supporting these fine folks." (Fiduciary News)

Judge Says Bear Stearns Investor Case Can Proceed – "'We are pleased that the court dismissed the plaintiffs' ERISA . . . and derivative complaints. We believe that the Bear Stearns-related securities law claims that survived the motion to dismiss are entirely without merit and we intend to seek their dismissal at an appropriate juncture,' JPMorgan said in a statement." (Reuters)

Final Retirement Savings Amount May Depend on Final Years of Investment Returns – "The problem is that even if you do everything right and save at a respectable rate, you're still relying on the market to push you to the finish line in the last decade before retirement." (The New York Times; one-time registration required)

Survey Shows Hint of Financial Optimism in the New Year – "While there was some good news, in one important area of personal finance -- personal savings -- there are still far more people uncomfortable with their savings situations." (Bankrate, Inc.)

[Opinion]
Regulatory Agenda Moves Retirement Plans Forward – "[DOL] had a busy year in 2010, handing down a number of significant new and proposed regulations that impact retirement plans. In this video, [an ERISA attorney] summarizes these regulations and offers her thoughts on how they're likely to affect plan sponsors going forward." (The Vanguard Group)

[Opinion]
State Bankrup.tcy Is a Bad Idea – "As states struggle with enormous deficits and exploding pension costs, some analysts are urging Congress to enact a law enabling states to declare bankrup.tcy the way municipalities can under Chapter 9 of the federal bankrup.tcy code." (The Wall Street Journal)


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Benefits in General; Executive Compensation

[Guidance Overview]
New Tax Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans – "Failure to file the appropriate forms with the IRS may result in . . . penalties . . . . In addition, a failure to distribute information statements to employees may give rise to an additional penalty of $50 per statement (maximum of $100,000 per year)." (K&L Gates LLP)

SEC Prepares to Finalize Say on Pay Rules Next Week – "The say on pay requirements of the Dodd-Frank Act took effect January 21, 2011, but the SEC will not approve final rules implementing those requirements nor the golden parachute vote requirements until January 25 at its next open meeting." (HR Policy Association)

New Editions of NCEO Books on Equity Compensation – The NCEO has just released new editions of Accounting for Equity Compensation, Advanced Topics in Equity Compensation Accounting, Beyond Stock Options, Selected Issues in Equity Compensation, and The Stock Options Book. (National Center for Employee Ownership)

Press Releases

US Labor Department Sues Janesville, Wis.-Based Premier Vending Inc. And President To Recover More Than $26,000 In Employee 401(k) Contributions U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Nearly Half of Americans Believe Their Savings Are Insufficient Bankrate, Inc.

RPAG Appoints New SVP of Client Service Retirement Plan Advisory Group

ING Reaches Over One Million 403(b) Retirement Investors with Planwithease.com® ING Retirement Services

McGraw Wentworth Launches Survey to Benchmark Benefits Trends and Impact of Health Care Reform in SE Michigan McGraw Wentworth

Section 409A Handbook BNA Books

Employee Benefits Law, Second Edition, 2010 Cumulative Supplement BNA Books

ERISA Class Exemptions, Third Edition, 2010 Cumulative Supplement BNA Books

ERISA Litigation, Third Edition, 2010 Cumulative Supplement BNA Books

CBGH Releases Report on Consumer Ratings of Colorado Health Plans Colorado Business Group on Health


Employee Benefits Jobs

Internal Sales Consultant
for John Hancock Financial Services in IL


Webcasts and Conferences

2nd Annual HCC Best Practices for Proactive Medical Management
in Florida on April 11, 2011 Opal Events

2nd Annual Medical Management in Medicare Advantage: Payer/Provider Collaborative Care Summit
in California on August 25, 2011 Opal Events

ICD-10 Transition Guide & HCC Best Practices
in Puerto Rico on April 4, 2011 Opal Events

Legal Update on Fiduciary Responsibility in Employee Benefit Plans Webinar
Nationwide on February 10, 2011 FutureOffice Network

Medicare Advantage Compliance Symposium
in Virginia on July 11, 2011 Opal Events

Work/Life Balance
in Georgia on February 17, 2011 WEB (Worldwide Employee Benefit Network) Atlanta Chapter


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