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[Guidance Overview]
Peabody v. Davis Exposes Potential Risks for Fiduciaries of Eligible Individual Account Plans
"The Court acknowledged that EIAP's are exempt from the duty to diversify, but nevertheless concluded that the fiduciaries had a duty to reduce exposure to company stock in an orderly way, as company profitability abruptly and openly dropped. Although the facts of the case are unique, the ruling may expose potential risks for the fiduciaries of EIAPs.'
(Proskauer Rose LLP)
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[Guidance Overview]
DOL Clarification of Effective Dates for Fee Disclosure Rules
"It appears unlikely that the DOL will extend these effective dates any further. Consequently, covered service providers, plan fiduciaries and plan administrators should take active steps to familiarize themselves with these rules and be prepared to meet the newly announced compliance deadlines."
(McGuireWoods LLP)
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Retirement Plan Sponsors Value their Advisers, Study Finds
"Plan sponsors say that they 'find comfort' in their advisers and the services they deliver, according to preliminary results from a comprehensive study to research the benefits that plan sponsors gain from working with professional retirement plan advisers."
(Insurance Networking News and SourceMedia, Inc.)
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Fiduciaries and the Attorney-Client Privilege
"Courts have carved out a very broad exception to the attorney-client privilege in the context of fiduciary litigation. When an attorney advises a fiduciary about the administration of a benefit plan, courts have found that the attorney's client is actually the beneficiaries of the plan and not the fiduciary personally."
(Employee Benefit News; free registration required)
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Equity Indexed Annuity Alert
"One reason for the widespread interest in equity indexed annuities is that these products are often touted as a vehicle for investors to realize stock-market-like gains without the risk, a 'best of both worlds' marketing strategy that has proven appealing to risk-averse seniors. However, the expectation of a return that mirrors that of a stock market index is unrealistic with equity indexed annuities."
(Florida Department of Financial Services)
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How to Effectively Educate Baby Boomers to Prepare for Retirement
"Educating Baby Boomers is a process, not an event. There are emotional issues-such as learned helplessness and defeatism that require multiple interactions to overcome. There are also plenty of Baby Boomers that don't have a solid financial foundation and can't begin to increase their retirement savings or even think about more effective retirement planning strategies until they take care of more pressing problems."
(Liz Davidson via 401khelpcenter.com)
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Opponents of New PBGC Premium Authority Take It to Congress
"In a letter to all congressional members . . ., the U.S. Chamber of Congress, the ERISA Industry Committee and other employer groups argue that allowing the Pension Benefit Guaranty Corp. to raise premiums 'amounts to a tax on employers that have voluntarily decided to maintain defined benefit plans.'"
(Pensions & Investments; free registration required)
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Court Grants Class Certification in First Horizon 401(k) Suit
"The suit seeks to recover monies that were lost by employees of First Horizon National Corporation due to their investing in First Horizon stock and/or the First Funds, a family of First Horizon mutual funds, when it was no longer prudent to do so."
(PLANSPONSOR.COM)
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PBGC Fighting Harry & David Holdings Inc. Move to Terminate Pensions
"In its filing for bankrup.tcy, the gift basket retailer asked for court approval to shed its pension plans . . . . However, PBGC said its financial analysis shows that the company will be able to emerge from bankrup.tcy without cutting off its workers' pensions."
(PLANSPONSOR.COM)
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Loans from 401(k)s Are on the Rise As Investors Tap Their Inner Banker
"In 2010, about one in seven workers borrowed from a 401(k) plan, according to new data from human-resources consulting group AON Hewitt. Companies that run the plans report double-digit increases in borrowing from 2009: up 14% in Vanguard Group Inc.-run plans; up 11% in plans run by T. Rowe Price Group Inc. Today, almost 30% of 401(k) savers have a loan outstanding, the highest in recent history."
(The Wall Street Journal)
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Pension Plan Terminations: Minimizing Cost and Risk
"This paper discusses the financial preparation and strategies that need to be considered as part of terminating a pension plan. Most sponsors with fully frozen plans should begin thinking about these issues as soon as possible, even if terminating the plan is not imminent."
(The Vanguard Group, Inc.)
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New Hampshire Negotiators Agree on Pension Reform Bill
"Negotiators settled the last two issues holding up the compromise that lawmakers could vote on Wednesday. One would limit part-time workers to 32 hours a week before they would have to contribute to the pension system. An exception was made for retired police officers hired by communities seasonally for events such as motorcycle week in Laconia."
(Bloomberg LLP)
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[Opinion]
All Americans Need 401(k) Loan Insurance
"Many of these millions of borrowers are unaware that in the event of death or disability, the loan is considered to be in default if not repaid within 60 days. This might seem a negligible risk, but the Social Security Administration reports three in 10 workers will eventually suffer such a setback."
(Elaine Chao via CQ-Roll Call, Inc.)
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Benefits in General; Executive Compensation
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U.S. Funding for Future Obligations Lags by Trillions
"The government added $5.3 tril.lion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 tril.lion the total of financial promises not paid for."
(USA TODAY)
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Press Releases
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