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Compliance Analyst
for Trinity Pension Consultants, Inc. in OH

Retirement Benefits Analyst
for DIRECTV in CA

Business Development Consultant
for National Automobile Dealers Association in ANY STATE, CO, OR

Plan Design and Taxation Associate
for Boutique Benefits Law Firm in DC

Associate Actuary
for GuideStone Financial Resources in TX

401(k) Plan Administrator/Consultant
for Applied Plan Administrators LLC in MI

Manager, Retirement Plan Services Analyst Team
for Prudential in CT, IL

Retirement Plan Administrator
for Bates & Company, P.A. in FL

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401k Quarterly Legal & Compliance Update FREE Webinar
Nationwide on October 25, 2011 presented by Cambridge Investment Research, Inc.

Forfeitures in Safe Harbor Plans
"Nothing would prevent an employer from prospectively amending a plan so that it not offset ADP safe harbor contributions by forfeitures. However, there does not appear to be a need for such an amendment at this time." (SunGard Relius)

DATAIR! More Choices – Better Guidance – Less Cost   [Advert.]

Documents, SPDs, Amendments, Administrative Forms
401(k)/Profit Sharing, 403(b), DB and Cash Balance Plans
(888) 328-2474    Sales@DATAIR.com    www.DATAIR.com

Pension Accounting for Governments
"Reforming pension accounting has been on the agenda of [GASB] for some time. Recently, the GASB issued two exposure drafts proposing improvements to financial reporting of pensions by state and local governments and the financial reporting by pension plans." (PricewaterhouseCoopers LLP)

Model Participant-Directed Defined Contribution Plan Investment/Expense Disclosure Package (PDF)
"The new disclosures are required for plan years beginning on or after November 1, 2011. However, the initial/annual notice does not have to be distributed before the later of (i) 60 days after the beginning of the plan year, or (ii) May 31, 2012. Thus, for calendar year plans, the deadline for first providing the initial/annual notice would be May 31, 2012." (Paul Hastings LLP)

IRS Delays Deadline for 'Market Rate of Return,' Other Rules
"These final and proposed regulations, both published in October 2010, include rules to establish a regulatory 'market rate of return' and have been roundly criticized by sponsors of cash balance plans and their advisors." (Milliman, Inc.)

IRS Postpones Effective Date of Interest Crediting Rules for Cash Balance and Hybrid Plans
"The Notice also provides an extended deadline for certain related interim and discretionary plan amendments, including amendments eliminating or reducing plan benefits under Section 411(d)(6) of the IRC, and a special timing rule for a notice of a reduction in future benefits, or 204(h) notice." (Practical Law Company)

The ERISA Outline Book, 2011 Edition Available Now!   [Advert.]

Industry bestseller! Valued by every practitioner. The ERISA Outline Book by Sal L. Tripodi, J.D., LL.M. provides everything you need to know affecting retirement plans. Subscribe online and get automatic updates!

IRS Delays Effective Date of Certain Hybrid Plan Rules and Postpones Amendment Deadline
"Regulations governing market rates of return in cash balance and other hybrid plans will take effect no earlier than 2013, the IRS has announced. The precise effective date will be set in final regulations." (Mercer LLC)

Another Question is Answered in the "Who's the Employer?" Q&A Column
A father and his adult son (over age 21) each own 50% of the company 'Together.' The son also owns 100% of the company 'Alone.' The son has no children or grandchildren. The companies don't do business together, but the son works and is paid wages from both companies (mostly from 'Together'). If either the father or the son were to own more than 50%, then it would create a controlled group, but a precisely 50/50 split means there is no controlled group! How can that be? Am I missing something here? (BenefitsLink.com)

More 401(k) Retirement Plans Are Offering 'Socially Responsible' Funds
"A recent survey by human resources consulting group Mercer found that 14% of 401(k) plans now offer a socially responsible option; the number is expected to double within the next three years." (Dow Jones & Company, Inc.)

Listings of Required Modifications Updated to Reflect Changes in 2010 Cumulative List
"In terms of applicable defined benefit plans and the changes under Code §§ 411(a)(13) and 411(b)(5), this week the IRS released Notice 2011–85 which modifies the 2010 Cumulative List and postpones the deadline for adopting certain of the plan amendments." (Deloitte via BenefitsLink.com)

How Prepared Are State and Local Workers for Retirement?
"This brief summarizes the results of a paper that uses the Health and Retirement Study (HRS) and actuarial reports published by state and local pension systems to test the hypothesis that state-local workers have more than enough money for retirement." (Center for Retirement Research at Boston College)

Critics Fear Government Isn't Promoting Annuities Enough
"The department's proposal will specify how to calculate monthly-income equivalents for 401(k) statements, such as whether those values will be based on the current account balance or whether the estimate will be based on projected asset growth and additional contributions . . . ." (Investment News; free registration required)

Use of Tax Incentives for Retirement Saving in 2006
"In 2006, just over half (52 percent) of all workers who filed tax returns participated in some form of tax-favored retirement plan." (U.S. Congressional Budget Office)

Lifecycle Portfolio Choice with Systematic Longevity Risk and Variable Investment-Linked Deferred Annuities
"This paper assesses the impact of variable investment-linked deferred annuities (VILDAs) on lifecycle consumption, saving, and portfolio allocation patterns given stochastic and systematic mortality." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve full text)

The Fiduciary Safe Harbor for Investment Managers
"There appears to be an increasing interest by plan sponsors in using 401(k) investment managers, sometimes called 3(38) managers. Unlike an adviser, an investment manager actually selects, monitors, removes, and replaces the 401(k) investments." (PLANSPONSOR.COM)

Knox County, TN, Pension Plan Meant Only for Uniformed Officers Keeps Growing Every Year
"[T]he Uniformed Officers Pension Plan, or UOPP, costs taxpayers $8.2 mil.lion a year — almost three times what was first projected, figures show. Funding costs are expected to rise even more — millions more — just to ensure pensioners get their money." (The E.W. Scripps Co.)

Threat to State Workers' Pension Perk Causes Rush at CalPERS
"More than 12,000 members of the California Public Employees' Retirement System asked for price estimates to buy additional retirement service credit — sometimes called 'airtime' — during the fiscal year that ended June 30. That was up 23 percent from 2009-10." (The Sacramento Bee)

Early-Retirement Plan for Kalamazoo City Employees Called 'Prudent and Reasonable'
"Officials say the $12.7 mil.lion program will eventually pay for itself and will reduce operating costs by an estimated $60 mil.lion over 40 years. The early retirement plan, in conjunction with a pay reduction of 5 percent for new hires, would help — but not totally balance — the 2013 budget, if approved." (Michigan Live LLC)

Financial Services Company Has Its Menu of Mutual Funds Exposed and Accused of Poor Performance and High Fees
"Ameriprise Financial, the largest employer of certified financial planners in the United States, finds itself [facing a lawsuit as] six people, including one current employee, sued the company, accusing it of stuffing its 401(k) plan with expensive, underperforming mutual funds that came from the company's own investment management arm." (The New York Times; free registration required)

Unrealistic Accounting for Public Employee Pension Systems
"Over the past 20 years, reports The Wall Street Journal, the Teachers Retirement Association of Minnesota has gotten yearly returns averaging 8.8 percent. The Texas teachers' fund has earned 8.9 percent. So they, like other states, assume they'll do the same in the next 20 years. . . . Joshua Rauh, a public pension expert at Northwestern University's Kellogg School of Management, says 2 or 3 percent would be more appropriate rates to use." (Chicago Tribune)

Pension Plan Funding Rules Perfect Example of Need to Find Middle Ground Between Two Extremes
"Employers should be required to contribute enough money to their pension plans to honor benefit commitments. If employers feel they are putting in far more than is required, some will freeze their plans. Lawmakers need to examine if something is wrong here and, if so, redesign the rules to ensure adequate contributions without unfairly burdening employers." (Business Insurance)

Borrowing from Retirement Plan May Avert Foreclosure, but Be Aware of Risks
"[C]onsider the pension plan alternative that may already be buried away in your plan documents: a save-the-house loan to yourself. If the numbers work and you have a reasonable chance of avoiding foreclosure and repaying the loan, check it out." (The Washington Post; free registration required)

ERISA's Duty of Loyalty Requires Certain Disclosures, but Discovery Requests Do Not Trigger Statutory Penalties
"While these facts sound particularly egregious, the case reminds us all to take disclosure seriously — whether distributing SPDs or responding to individual document requests. And, although the court declined to penalize inaction on a discovery request, its recognition of an affirmative disclosure obligation within ERISA's duty of loyalty may prove more onerous for fiduciary compliance." (Thomson Reuters/EBIA)

Lawmakers Push Extended Pay Freeze and Increased Pension Contributions for Federal Plan Participants
"[A] Senate letter also recommends that the super committee consider moving to high-five pension calculations without forcing early retirements, streamlining pharmacy benefits under the Federal Employees Health Benefits Program, capping contractor pay and reforming the federal workers' compensation program." (Government Executive)

Flexibility in Workplace Still Matters to Workers
"More than three in five working adults (62 percent) said that flexibility is one of the most important factors they consider when looking for a new job or deciding on an employer . . . . Of the 1,071 working adults polled, 42 percent said that they were willing to give up some salary to achieve more flexibility at work." (The Atlanta Journal-Constitution)

Employee Ownership Update for October 17, 2011
NCEO Executive Director Loren Rodgers discusses a proposed accounting body for private companies; stock purchase plans under scrutiny by the European Commission; an IRS conference call to discuss ESOP determination letters; the no-layoff policy at ESOP-owned AGM; and a TV spot for employee-owned Miller's Health Systems. (National Center for Employee Ownership (NCEO))

Key Issues in ERISA Fiduciary Insurance
Legal challenges by plan participants and the U.S. Department of Labor have made it more difficult for companies that sponsor ESOPs to create effective indemnification agreements to protect plan fiduciaries. This shift in the legal environment has made insurance more important for ESOP companies and fiduciaries, but seemingly minor wording differences in an insurance policy can have a substantial impact on the outcome should you ever face a participant suit or action by the DOL or IRS. (National Center for Employee Ownership)

Dickerson, Md., Company to Restore $100,000 to Employee Savings Plan, Resolving US Labor Department Lawsuit
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

US Labor Department Sues Wisconsin-based B & K Builders, Co-owners to Recover More than $114,000 for Company’s Employee Benefit Plans
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

US Labor Department Sues to Restore Employee Contributions to 401(k) Plan of 2 Pittsburgh Companies
(U.S. Department of Labor, Employee Benefits Security Administration (EBSA))

Flexible Plan Investments, Ltd. Announces Launch of Turnkey, Managed 401(k) Solution
(Flexible Plan Investments, Ltd.)