[Guidance Overview]
IRS Gives Tips for Fixing Problems with Electronic Signatures for Form 5500s
"Starting January 1, 2012, Forms 5500 and 5500-SF that have no electronic signature will receive a filing status of 'unprocessable' and Forms 5500 and 5500-SF that have an invalid electronic signature will receive a filing status of 'processing stopped.'"
(Wolters Kluwer Law & Business / CCH)
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NIPA’s Annual Forum & Expo provides the most up-to-date information to expand your industry knowledge. Join us April 29-May 2 at The Cosmopolitan of Las Vegas to take advantage of 25 sessions focused on the most pressing issues you face each day.
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6 Critical Trends for Retirement Plans in 2012
"The six megatrends Lincoln Trust sees in 2012: New 401(k) Fee Disclosure Rules by DOL . . . 'C Suite Sticker Shock' . . . A Refined Fiduciary Standard . . . Models vs. Target-Date Funds . . . The Rise of 401(k) Evaluation Services . . . A Call for Investment Expense Transparency."
(AdvisorOne)
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Budget Puts Military Pension Plan in Cross Hairs
"Right now, the system's 20-year vesting rule means many members of the military walk away with nothing, while those who put in 20 years or more can retire with at least half their salary and other lifetime benefits. In 2010, those payments cost the Department of Defense $50 bil.lion. By 2034, it could balloon to $108 bil.lion . . . ."
(Pensions & Investments)
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New Fee Disclosure Rules Help Make Costs More Transparent
"The regulations for calendar-year plans take effect 60 days after April 1, 2012, so most participants won't start receiving the new information until May 31, 2012. The DOL will now require your employer and any other provider to the plan (such as the plan's financial adviser and recordkeeper) to ensure the distribution of the following information to you: . . ."
(The Smarter Investor (usnews.com))
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Study Reveals Wide Range of 401(k) Plan Fees
"The average total plan cost for a small retirement plan (100 participants) for all expenses bundled together, including investment fees deducted from participants' assets and administrative/recordkeeping expenses and trustee fees, paid by the plan sponsor or passed along to participants, was 1.3 percent of assets under management in 2011."
(Society for Human Resource Management)
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Multiple Employer Plans: Qualified Retirement Plans (PDF)
"[As an alternative to single employer plans, the 'MultipleEmployer Plan' or MEP is] being increasingly promoted by service providers as the panacea for eliminating fiduciary liability and administrative costs. The value proposition of a MEP can vary by operational design and type of plan at issue, but the common benefits of a MEP to an employer include the elimination of most plan sponsor functions such as an annual plan audit and Form 5500 filing, and some plan fiduciary functions such as choosing which investment options will be available to plan participants."
(The Bureau of National Affairs, Inc. via K&L Gates LLP)
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Benchmarking: The Key to a 401(k) Plan Sponsor's Fiduciary Compliance Review
"Knowing how one's 401k plan stacks up against one's peer certainly places the plan sponsor on the road to fiduciary diligence. Unfortunately, far too few 401k plan sponsors conduct these fiduciary self-assessments. And that's a shame because, once the first review is completed, the others follow more easily after that."
(Fiduciary News)
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To Maximize Social Security Retirement Benefits, Know the Rules
"Social Security offers another important incentive to forestall filing until at least 66. Benefits are reduced permanently for every year that is filed before the FRA, and increased for every year that is waited to file beyond it, up till the age of 70."
(Thomson Reuters via Employee Benefit News)
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The Replacement 'Window' in Retirement Planning
"[T]he replacement rate approach represents, at best, an indirect approach to evaluating whether retired workers can maintain their standard of living in retirement — because what matters is not how much you have to spend, but how much you need to spend."
(Employee Benefit Research Institute)
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The Backdoor Roth IRA, Advanced Version
"You get a backdoor Roth IRA by opening up a nondeductible IRA and converting it to a Roth. You can contribute $5,000 a year — $6,000 if you're 50 or older. You want a Roth because it grows tax-free — as opposed to tax-deferred — and when you take money out — you don't ever have to — it comes out tax-free."
(Forbes.com LLC)
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Federal Retirees Face Confusion, Possibly Payment Delay
"'With OPM's current backlog and the expected significant rise in retirement processing workload, the time frame for OPM to place an annuitant in interim pay may increase to 6-8 weeks after their retirement date,' according to the Army."
(The Washington Post; free registration required)
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Connecticut Will Step Up Pension Payments to Save $5.8 Bil.lion
"The stepped-up payment rate is intended to avoid a one-time obligation estimated at $4.5 bil.lion in fiscal 2032, Malloy said yesterday in a statement. The sum, about four times the state's annual contribution in recent years, was projected based on continuing along that path."
(Bloomberg L.P.)
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Federal Thrift Savings Plan Administrative Expenses Stay Steady
"Net administrative expenses charged to each participating federal employee's Thrift Savings Plan account were about 20 cents per $1,000 of investment in 2011, roughly the same as the figure for 2010, TSP officials said Monday."
(Government Executive)
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408(b)(2) and the 401(k) Group Annuity/Insurance Company General Account, in More Detail
"[R]egardless of what you may think about 408b2 and the requirements now imposed by the rules, this reg has been craftfully drafted. The pieces fit together nicely, and complex issues with regard to investment products have been meaningfully addressed in as simple and direct manner as possible. There may be a few interpretative issues that need to be resolved (which is to be expected), and 403(b) issues continue to be a serious challenge, but this is a fine piece of technical writing."
(Robert J. Toth, Jr., Business of Benefits)
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Firefighters Pension Fund Challenges Benefit Changes
"The Board of Trustees of the City of Hollywood (Florida) Firefighters' Pension System filed a complaint challenging changes to system benefits. The trustees are asking a court in Broward County to find that the ordinance making the changes is invalid because it was not approved by the City Commission or submitted to city voters in compliance with governing law."
(PLANSPONSOR.COM)
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[Opinion]
California Unions Clueless on Pension Costs
"The irony is that the hundreds of thousands of teachers, firefighters, police officers, clerks, janitors, garbage collectors and other public employees whose futures depend on the systems have the most to lose if they are not reformed."
(The Orange County Register)
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[Opinion]
Taxing Seniors' Pensions 'Tough But Necessary' in Michigan
"Many people may not realize that Michigan was one of only a handful of states that exempted pensions from taxation in the first place. Our plan treats the income of retirees just like that of working seniors."
([Saline, MI] Patch)
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[Opinion]
Early Retirement Provisions of West Virginia Local Government Pension Plans Warrant a Review
"To see why, consider the pension plans for Huntington's police officers and firefighters. An analysis by [a Herald-Dispatch reporter] found that at least one-sixth, or $1.21 mil.lion, of the $7.3 mil.lion total payout to the city's police and fire retirees this year will go to people who are still collecting a paycheck — and sometimes a second pension — for other jobs in city, county, state or federal governments."
(Herald-Dispatch.com)
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[Opinion]
NTSAA and ASPPA Letter Advocating Inclusion of 403(b) Plans in the Prototype Program
"On January 23, 2012, NTSAA and ASPPA submitted comments to [IRS] in support of the inclusion of 403(b) plans in the prototype program for pre-approved plan documents. IRS officials have recently indicated that budget concerns may result in a reexamination of whether to include 403(b) plan documents in the pre-approved plan program. NTSAA and ASPPA believe that a prototype program for 403(b) plans is essential for the proper administration of the tax laws and that it would be a mistake to abandon this integral component of 403(b) compliance."
(American Society of Pension Professionals & Actuaries/National Tax Sheltered Accounts Association)
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Benefits in General; Executive Compensation
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Seniors Decide Retirement Doesn't Suit Them, Keep Working
"Baby Boomers are starting to . . . work past conventional retirement age, a trend fueled by an uncertain economy, improved health in older life and an understanding that staying engaged leads to a better sense of well-being. . . . The percentage of people who work and people who want to work . . . for 65 and older was 17.9% [in 2011] compared with 10.8% in 1985. For 75 and older, the rate jumped from 4.3% in 1990 to 7.5% in 2011.
(USATODAY.com)
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Which Governments Pay Public Employees the Most? (PDF)
"New Jersey and Michigan had the narrowest range of salaries for top salaries for public officials. . . . In New Jersey, top salaries range from $180 thousand a year to $275 thousand a year. For Michigan employees, high earners made between $120 thousand a year and $235 thousand a year."
(Sunshine Review)
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Press Releases
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