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October 26, 2011 Get Health & Welfare News  |  Advertise  |  Unsubscribe  |  Past Issues  |  Search

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[Guidance Overview]
Second Circuit Joins Five Other Circuits in Ruling Company Stock Investments in 401(k) Plans Presumptively Prudent (PDF)
"Two different groups of plaintiffs filed suit against Citigroup and against McGraw Hill alleging the 401(k) plan's fiduciaries violated ERISA by continuing to offer company stock as a plan investment option. Plaintiffs alleged the 401(k) plan fiduciaries 'knew or should have known' each company's subprime mortgage exposure made company stock a poor retirement plan investment." (Winston & Strawn LLP)

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[Guidance Overview]
IRS Postponement of Effective Date of Hybrid Plan Regs and Extension of PPA Amendment Adoption Deadline (PDF)
"On October 12, 2011, in Notice 2011–85, the IRS postpones the effective date for final hybrid plan regulations, extends the deadline set in PPA for adopting interim and discretionary hybrid plan amendments, and formalizes the 204(h) notice special timing rule in IRS Announcement 2009-82." (Buck Consultants, LLC)

[Guidance Overview]
Second Circuit Holds that 'Presumption of Prudence' Applies in ERISA Stock Drop Litigation
"Because the Citigroup plan expressly mandated that Citigroup stock be maintained as an investment option under all circumstances, the Second Circuit was not squarely confronted with the issue of what standard of review applies when the plan authorizes an employer stock fund, but does not require it." (The Mayer Brown Practices)

[Guidance Overview]
EBSA Final Rule on Statutory Exemption for Fiduciary Advisors Offering Eligible Investment Advice Arrangements
"The statutory exemption allows fiduciary investment advisers to receive compensation from investment vehicles they recommend to plan participants if they provide advice under an eligible investment advice arrangement." (Practical Law Company)

[Guidance Overview]
New Notice Requirements for Retirement Plans Seeking IRS Approval of Church Plan Status
"The guidance provides rules regarding the timing and method for providing the notice as well as a Model Notice that applicants can modify as required." (McDermott Will & Emery)

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Retirement Fiduciary Re-Proposal Out Early Next Year, According to DOL's Borzi
"The DOL's timeline falls close to when the Securities and Exchange Commission (SEC) is expected to release its fiduciary proposal." (AdvisorOne)

PBGC Offers Reporting Relief for Small Pension Plans
"[The PBGC Director yesterday] said the PBGC will extend through 2012 a rule implemented this year that granted small plans relief for reporting missed contributions. Small plans generally are considered to be those with 500 participants or less, although the definition can vary." (Pensions & Investments; free registration required)

A Reasonable Approach to Fee Reasonableness
"The Strategic Retirement Consulting group recently published a Vanguard commentary, Determining reasonableness of retirement plan fees, which looks at the steps and tools available to plan sponsors to help them understand and compare recordkeeping and investment management fees." (The Vanguard Group, Inc.)

Working Paper: Evaluating Workplace Education for New Hires (PDF)
"This project examines how employer-provided financial education for newly hired workers affects participation in retirement savings plans. [View slides and video at]" (Financial Literacy Center via Retirement Made Simpler)

'Leakage' from 401(k) Plans
"Close to one-fifth of plan participants have a loan outstanding against their accounts, with a mean value borrowed of about $7,200, or 16 percent of the average account balance. Such loans are defined by some as 'leakage' in that they allow people to access their tax-qualified savings in advance of retirement." (ProManage, LLC)

Workers Come Out Winners Even After Losing 401(k) Lawsuits
"The cases typically hinge on the way 401(k)s are packaged and marketed. In many plans, companies hire an outside investment firm to run the plan. Instead of being paid directly, those firms take a cut of the fees associated with the investments. Critics charge that those arrangements obscure—and ultimately inflate—costs for workers." (The Wall Street Journal)

Milwaukee Archdiocese Pension Fund Liabilities Total $41.8 Mil.lion, According to Bankrup.tcy Filing
"The gap between current assets and future payouts for the priest and lay workers' pensions—at 9.6% and 16.9%, respectively—fall within reasonable ranges given the economic conditions of the last few years, according to pension experts." (Journal Sentinel Inc.)

Sun Life's 2011 Unretirement Index: Insights into Americans' Changing Views of Retirement
"Americans aren't just reassessing their retirement. Many are moving into unretirement—continuing to work after becoming eligible for full Social Security Benefits. Sun Life's ongoing research shows that even though the recession officially ended over two years ago, American workers feel increasingly unconfident about retirement." (Sun Life Assurance Company of Can.ada (U.S.))

Base PBGC Premium Unchanged for 2012
"The base annual premium will remain at $35 per plan participant next year, the same as this year, the PBGC announced Tuesday." (Business Insurance)

Procter & Gamble Plans Restructure Partly Through Voluntary, Early Retirement Program
"Employees in Cincinnati and around the world received a letter last week outlining the terms of the offer, which P&G says will result in 'a modest number of voluntary separations.'" (

Some Small Employers' Retirement Plans Exempted from Determination Letter User Fees
"Small employers with recently established retirement plans may qualify for a user-fee exemption when filing for a determination letter under the IRS's staggered program." (Mercer LLC)

The Challenges of Being an ERISA Fiduciary
"[It was the] 2nd Circuit that, just a few years ago, called to mind the notion that ERISA's fiduciary standards of conduct are 'the highest known to the law.'" (PLANSPONSOR.COM)

Revisiting Portfolio Optimization
"Let's get one thing straight from the start: This is about unsystematic risk, not systematic risk. Systematic risk affects all investments. Diversification does not address systematic risk. Unsystematic risk is limited to very specific investments. That's why they also call it 'specific' risk." (Fiduciary News)

Investment Guidance for Employees Long Overdue
"People need specific guidance. Without it, they often guess at what they should do. Or they copy the investment choices of a co-worker, friend or family member. The result is that their retirement plans aren't right for them." (The Washington Post; free registration required)

Benefits in General; Executive Compensation

Trends in the Distribution of Household Income Between 1979 and 2007
"CBO finds that, between 1979 and 2007, income grew by: 275 percent for the top 1 percent of households, 65 percent for the next 19 percent, Just under 40 percent for the next 60 percent, and 18 percent for the bottom 20 percent." (U.S. Congressional Budget Office)

10 States with the Highest Debt Per Person, According to Report
"The total of U.S. state debt, including pension liabilities, could surpass $4 tril.lion, with California owing the most and Vermont owing the least, according to an analysis released on Monday." (, Inc.)

Press Releases, Inc.
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Jeanette Hull, News Editor
David Rhett Baker, J.D., Editor and Publisher
Lois Baker, J.D., President
Holly Horton, Business Manager

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