Retirement Plan Administration

GASB Preliminary Views Employers'Tool Kit
Excerpt:"[The tool kit] consists of a number of items specifically drafted (and reviewed by actuaries and others) to help employer representatives understand the basics of what GASB is proposing, and appreciate the drastic consequences if GASB's PV becomes the new accounting and disclosure standard for governmental employers. These items have been designed to simplify as best as possible the complicated issues in the PV, and focus on one of the most potentially dangerous, namely, the elimination of the'Annual Required Contribution'. . . and the inclusion of a new'Net Pension Liability,'. . . on the face of the employer's balance sheet, thereby de-linking pension accounting from pension funding."(National Council on Teacher Retirement)

[Guidance Overview] Proposed DOL Update to Regs for Prohibited Transaction Exemption Requests
Excerpt:"The proposed regulation contains a number of'important substantive amendments,'according to the preamble to the regulations. Many of the changes involve the information that must accompany the exemption request. Several changes improve the notification to interested parties that the request has been made."(Wolters Kluwer)

[Opinion] Group Letter Stating Concerns with IASB Proposed Amendments to IAS 19 (PDF)
3 pages. The letter was sent by the American Benefits Council, the European Paritarian Institutions of Social Protection, the European Federation for Retirement Provision, and the National Coordinating Committee for Multiemployer Plans. (American Benefits Council)

[Opinion] Group Comment Letter to IASB on Proposed Amendments to IAS 19 (PDF)
8 pages. The letter was sent by the American Benefits Council, the European Paritarian Institutions of Social Protection, and the National Coordinating Committee for Multiemployer Plans. (American Benefits Council)

[Official Guidance] Submission of PBGC Information Collections for OMB Review; Comment Request; Payment of Premiums; Termination Premium
Excerpt:"Pension Benefit Guaranty Corporation . . . is requesting that the Office of Management and Budget . . . extend approval, under the Paperwork Reduction Act, of the collection of information for the termination premium under its regulation on Payment of Premiums . . . without change. This notice informs the public of PBGC's request and solicits public comment on the collection of information."(govpulse)

[Guidance Overview] Upcoming Compliance Deadlines for Qualified Retirement Plans
The newsletter also includes a brief description of certain plan amendments that plan sponsors might be required, or might wish, to make before the end of the 2010 plan year. (The Segal Group, Inc.)

[Guidance Overview] 401(k) Participant at Fault in Account Withdrawal Dispute
Excerpt:"A federal judge in Oklahoma has cleared a 401(k) plan administrator of wrongdoing in a dispute over whether the employer should be forced to repay the participant for funds his ex-wife took out of his account."(PLANSPONSOR.com)

[Opinion] Statement on Behalf of Profit Sharing/401k Council of America before Working Group on Employee Benefit Plan Auditing and Financial Financial Reporting Models
2 pages. (Profit Sharing / 401k Council of America)

[Guidance Overview] Funding Relief for Single Employer Pension Plans (PDF)
Pages 1-3 of 6 pages. (Trucker Huss)

[Guidance Overview] GASB's Proposed Changes to Pension Accounting and Financial Reporting by Employers (PDF)
Pages 1, 3 of 4 pages. (National Council on Teacher Retirement)

Time to Prepare for 2011: Issues You May Need to Address Before the End of 2010 (PDF)
3 pages. (Holland&Hart LLP)

Avoid the Added Cost of Top-Heavy Retirement Plans
Excerpt:"A plan that tests as top heavy on the last day of the 2010 plan year will be subject to the top-heavy rules for the 2011 plan year."(KraftCPAs PLLC)

[Guidance Overview] GASB Moving Towards Radical Overhaul of Public Pension Accounting (PDF)
12 pages. Excerpt:"'Preliminary Views'issued by GASB on pension accounting would, if adopted, represent a radical departure from past practice and bring governmental employers much closer to the FASB standards governing private employers. Public employers should anticipate that the accounting rules under consideration would have a significant impact on their balance sheet and income statements."(CHEIRON, Inc.)

[Guidance Overview] DOL Releases Interim Final Service Provider Disclosure Regulation
Excerpt:"In the attached article, the authors provide below an overview of the Regulation, and then discuss how it may be expected to affect plan service providers and plan fiduciaries, noting some of the topics that remain unclear or could be the subject of comments."(Groom Law Group)

[Guidance Overview] Hodgson Russ LLP - Employee Benefits Developments August 2010
Nice summaries of important recent ERISA cases. (Hodgson Russ)

Disparities in Automatic Enrollment Plan Availability
Excerpt:"Savings and thrift plans have become a popular retirement savings alternative to traditional pension plans; the inclusion of an automatic enrollment feature is gaining traction and is especially prevalent in certain worker and establishment groups."(U.S. Bureau of Labor Statistics)

[Opinion] Comments by SPARK Institute About Interim DOL Regs on Disclosure to Fiduciaries of Fees by Service-Providers (PDF)
13 pages. Excerpt:"[The interim regulation] appears to shift Investment Fund Information disclosure responsibility from investment fiduciary service providers with respect to investments they issue and manage to an unaffiliated, non-fiduciary record keeper. [Further,] we are concerned that record keepers will be obligated to provide record keeping services and, in turn, provide Investment Fund Information for investment options demanded by plan sponsors that do not have materials that are regulated by a State or federal agency."(The SPARK Institute, Inc.)

[Official Guidance] Text of Proposed DOL Regs Restating and Amending Procedures for Prohibited Transaction Exemptions (PDF)
22 pages. Excerpt:"[T]he Department would require the disclosure of the following information from a qualified independent fiduciary: A copy of such fiduciary's engagement letter with the plan describing the duties the fiduciary will undertake on behalf of the plan; a detailed explanation of why the proposed transaction is in the interests of the participants and beneficiaries; a statement that, in instances where the transaction is ongoing, the fiduciary agrees to monitor the proposed transaction throughout its duration on behalf of the plan, taking any appropriate action to safeguard the interests of the plan; what qualifications the fiduciary has to perform these duties on behalf of the plan and the level of ERISA experience the person has; and a representation to the effect that such fiduciary understands and acknowledges his or her ERISA duties and responsibilities in acting as a fiduciary on behalf of the plan. . . . As a general matter, an independent fiduciary retained in connection with an exemption transaction must receiveno more than a de minimis amount of compensation from the parties in interest to the transaction or their affiliates."(Employee Benefits Security Administration, U.S. Department of Labor)

That Pension? You Might Have to Pay It Back
Excerpt:"[P]ensions paid by single employers fall into a murky area of federal law governed under Treasury and Department of Labor regulations. It is clear that, when administrators make a mistake, the plans are supposed to recoup the money, but nothing specifies from whom."(Orange County Register)

[Opinion] Only Thing Worse Than Not Telling 401(k) Participants How Much to Save Is Offering Reckless Target Date Funds
Excerpt:"[T]he biggest problem with target date funds is that they mislead 401(k) participants into thinking that the most important component of retirement adequacy is the investments you choose when it's the actually the size of the contribution to retirement savings relative to income along with the investment time horizon."(Jane White of Retirement Solutions)

FASB Proposed Accounting Standards Update Re: DC Plan Loans (PDF)
16 pages. Comments due by September 7, 2010. (FASB via The SPARK Institute)

19% Decline in U.S. Retirement Benefits Seen Over 10 Years
Excerpt:"According to Towers Watson's industry-specific analysis -- including defined benefit (DB) and defined contribution (DC) plans, as well as retiree medical and life insurance plans -- the value, as measured by percentage of pay, of total retirement benefits for U.S. workers dropped 19% between 1998 and 2008."(Towers Watson)

IRS Handout on Abusive Tax Avoidance Transactions and Emerging Issues Presentation (PDF)
17 pages. Excerpt:"The [August 27, 2010 phone] Forum will focus on potential abusive schemes and new emerging issues including insurance funded plans, schemes involving defined benefit pension plans, S Corporation ESOP abuses, ROBS compliance issues, reversion and distribution schemes, management company promotions, abuses involving union plans and other issues of concern. IRS EP will also discuss strategies to proactively detect and deter abuse, including the use of Promoter Investigations."(U.S. Internal Revenue Service)

Retirement Industry Acronyms and Abbreviations
Excerpt:"Like many industries, the retirement profession is acronym and abbreviation crazy. [401khelpcenter.com] compiled this list of the more common acronyms and abbreviations to help those who are not familiar with their meaning."(401khelpcenter.com, LLC)

[Guidance Overview] September Deadline Set for Refiling Pension Overpayment Suit
Excerpt:"[The U.S. District Court] ordered that if a new suit against [the defendant] is not filed under [ERISA] by that date, [the court's] order throwing out ING's original case filed under Illinois state law will become permanent. The court ruled that the state law claims against Barrington in the original suit would be pre-empted by ERISA."(PLANSPONSOR.com)

[Guidance Overview] Court Orders Rehired Lucent Technologies Employee Readmitted to DB Plan
Excerpt:"[A U.S. District] ruled that committee members had ignored a section of the plan documents for the Lucent Retirement Income Plan . . . allowing such re-entry to the service-based DB program if Lucent rehired a temporarily laid-off employee within three years."(PLANSPONSOR.com)

[Guidance Overview] Technical Questions and Answers Regarding 403(b) Plans Information Sharing: Minimum and Comprehensive Data Elements, Updated August 25, 2010
Excerpt:"The SPARK Institute created a standing panel, made up of representatives from various member companies that played a significant role in developing the Data Elements. The SPARK Institute and the panel review questions that are submitted and develop answers which are posted . . . . Answers are made widely available in order to assist all organizations that are adhering to the Data Elements Best Practices and to the Remittance and Census Data Elements."(The SPARK Institute)

IRS Official Clarifies When Forfeitures Can Be Used as Plan QNECs
Excerpt:"Employers will no longer be permitted to use forfeitures, or nonvested amounts left in employee accounts, for correcting certain kinds of retirement plan qualification errors, an IRS official says. Forfeitures can be a source of qualified nonelective contributions for some corrections but not others . . . ."(Tax Management Inc.)

Comment Period Extended on FASB Proposal Affecting Multiemployer Plan Withdrawal Liability Disclosure
Excerpt:"For employers contributing to multiemployer pension plans, the proposal would require disclosure of potential liability on withdrawing from such plans ? even if withdrawing is only a remote possibility ? if that liability would severely impact the employer."(Mercer LLC)

DOL Answers More EFAST2 Questions for Form 5500 Filers
Excerpt:"DOL explains how filers can meet the requirement to submit separate attachments for actuarial information when the plan's actuary sends a single electronic file. Similar procedures apply if the accountant sends a single file combining the auditor's report with other financial information."(Mercer LLC)

[Guidance Overview] EBSA Updates EFAST2 FAQs
Excerpt:"Additionally, Question 11 has been updated to clarify the definition of'Filing Signer'and Question 29 has been updated to address a potential issue with'optimizing'PDF files. These updated FAQs may be found on the Department of Labor's Web site, at www.dol.gov/ebsa."(Deloitte via BenefitsLink.com)

New White Paper Reveals Three Greatest Fiduciary Liability Threats to 401(k) Plan Sponsors
Excerpt:"The Chubb Group of Insurance Companies and Morgan, Lewis&Bockius LLP recently released a special report on the risk of fiduciary liability lawsuits that may just scare the you-know-what out of the average 401k plan sponsor."(Fiduciary News)

Who May Sue You and Why: How to Reduce Your ERISA Risks and the Role of Fiduciary Liability Insurance (PDF)
32 pages. Excerpt:"In a press release dated August 12th, Chubb states'The U.S. Labor Department reported 910 corrected violations resulting from the 1,042 investigations of violations of the Employee Retirement Income Security Act (ERISA) it conducted in 2009.'"(Chubb Group of Insurance Companes)

[Opinion] What Plan Sponsors Don't Know May Hurt You
Excerpt:"[I]t's what plan sponsors don't know that worries them. Three out of four respondents confessed that they lacked significant knowledge of ERISA fiduciary requirements, and little over half felt that they had adequate knowledge of the administrative and investment fees associated with their plan."(Briskin Consulting)

FASB Would Drop Fair Value for Pension Plan Loans
Excerpt:"FASB [has] issued a Proposed Accounting Standards Update . . . that is intended to clarify how defined contribution pension plans should classify and measure loans to participants."(American Institute of Certified Public Accountants)

Best Practices for Multiple Vendor 403(b) Plans Form 5500 Data Aggregation. August 2010 Draft Version (PDF)
30 pages. (The SPARK Institute)

Text of Retirement News for Employers, Summer 2010 Edition (PDF)
Excerpt:"The Retirement News for Employers is a periodic newsletter with retirement plan information for employers and business owners ? and their tax advisors from Employee Plans (Tax Exempt and Government Entities (TE/GE) at the IRS)."(U.S. Internal Revenue Service)

More Than Half of U.S. Public Pension Funds Could Disappear
Excerpt:"In a new research paper titled: Policy Options for State Pensions Systems and Their Impact on Pension Liabilities,'[an associate finance professor] explains that the large and daunting group of troubled states pension funds'are headed for run outs and financial disaster,'an Aug. 19 announcement said."(Financial Planning)

CalPERS Loan Sought by California Governor Likely'Very Expensive,'Analysts Say
Excerpt:"The governor's plan represents an apparent about-face ? and raises questions about the long-term costs. The last time the state borrowed from CalPERS, it had to pay the pension fund $400 million in interest. More borrowing would surely bring more interest expense, experts said Friday."(The Sacramento Bee)

Retirement Plans: Former Employees Can Be Current Problems
Excerpt:"Plan sponsors are obligated to maintain communication with ex-employee participants but run the risk of becoming disconnected, making it difficult to meet fiduciary obligations. In addition, it puts the organization at risk for problems with unclaimed property reporting."(Society for Human Resource Management)

5500 Filed Timely but Processed Late
Excerpt:"Some preparers have filed a 5500 shortly before the deadline but because the filing was not processed by midnight or initially was not processed at all, the DOL considers the filing late. In discussing the matter with the DOL, the DOL has confirmed that it considers the filing late and that the government may generate an automatic penalty letter."(SunGard Relius)

DC Plans Shouldn't Classify Participant Loans As Investments, According to FASB
Excerpt:"According to the proposal,'If a participant were to default, the participant's account would be reduced by the unpaid balance of the loan, and there would be no effect on the plan's investment returns or any other participant's account balance.'"(Pensions&Investments; registration may be required)

The Next Pension Crisis: Taft-Hartley Multiemployer Plans
Excerpt:"[A post by'The Lid'on the underfunding of multiemployer pension plans includes the following:]'Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.'"(Workplace Prof Blog)

[Guidance Overview] Legislative Glitch Could Affect Pension Contributions for Eligible Charity Plans
Excerpt:"Under a provision in the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (the 2010 Act) passed earlier this year, funding requirements and benefit restrictions enacted by the Pension Protection Act of 2006 (PPA) do not apply to eligible charity plans until 2017."(Towers Watson)

FASB Extends Comment Period on Loss Contingencies Exposure Draft which Includes Employer Reporting for Multiemployer Withdrawal Liability
Excerpt:"The proposed amendments would lower and broaden the current disclosure threshold. Current U.S. GAAP requirements would be enhanced with additional information required. Included in the subtopics to be amended is multiemployer plan withdrawal liability disclosure information."(International Foundation of Employee Benefit Plans)

[Opinion] SEC's 12(b)-1 Proposal: Does It Actually Increase 401k Fiduciary Liability?
Excerpt:"Under the current SEC proposal, the migration from the 12b-1 distribution model to the fee-based model may become the predominant strategy for this simple reason: Even if some distribution system incorporating the new 12b-2 model emerges, 401k plans will have to change their recordkeeping systems to account for individual lots. This accounting method ? which may represent a costly change ? is currently not done for retirement plans."(Fiduciary News)

Employee Benefits Update, August 2010 (PDF)
The eight-page newsletter presents select compliance deadlines and reminders; retirement plan developments; health and welfare plan developments, and, general developments. (Reinhart Boerner Van Deuren s.c.)

[Guidance Overview] Ohio District Court Rejects Negligence and ERISA Claims Against Milliman (PDF)
2 pages. Excerpt:"[T]he Court concluded that the actuarial services Milliman provided to the Excavating, Building Material and Construction Drivers Union Local No. 436 Pension Fund did not violate professional standards, the parties'contract or ERISA."(Groom Law Group)

DOL Will Not Provide Blanket Extension for 2009 Form 5500 Filings
Excerpt:"In a letter to the American Benefits Council, the DOL stated that such an extension was'neither necessary nor appropriate.'The American Benefits Council had requested a blanket extension for the 2009 plan year filings to the later of (1) 9 1/2 months after the end of the plan year or (2) December 31, 2010."(Wolters Kluwer)

[Guidance Overview] PBGC Proposes Rule Clarifying When'Substantial Cessation of Operations'Occurs for Single Employer Plans
Excerpt:"The regulations are not yet effective. They will apply to cessation dates that occur on or after the effective date of the final regulations, and will displace and supersede all of the PBGC's prior opinion letter pronouncements regarding ERISA ? 4062(e). Comments are requested on or before October 12, 2010."(Deloitte via BenefitsLink.com)

PBGC Proposes Clarifying Downsizing Liability Rule
Excerpt:"The PBGC proposed a clarification to a rule determining the liability when an employer shuts down a facility that leads to layoffs of more than 20% of the active participants in a defined benefit plan."(Pensions&Investments; registration may be required)

[Guidance Overview] The Impact of Mergers, Acquisitions and Dispositions on Your Retirement Plan
20 pages. Excerpt:"A slight variation in details surrounding a purchase or sale transaction may present different legal and regulatory issues for your retirement plan(s). Use this white paper to guide and enhance discussions about your retirement plan(s)."(The Principal Financial Group)

[Guidance Overview] Service Provider Fee Disclosure Regulations: The Context
Excerpt:"This Technical Update explains the basis for the DOL's issuance of the regulations and the overall purpose of the regulations."(SunGard Relius)

[Guidance Overview] IRS Memo Explains How Agency May Serve Tax Levies on Retirement Plans
Excerpt:"The IRS can serve two types of tax levies on a delinquent taxpayer's vested retirement benefits, an internal agency memo explains."(Mercer)

[Guidance Overview] PBGC Proposes Notice, Liability and Recordkeeping Rules for Certain Facility Closings
Excerpt:"Employers would have less wiggle room in assessing whether a facility closure causing termination of more than 20% of active participants ('4062(e) event') has occurred, under an Aug. 9 PBGC proposal."(Mercer)

[Guidance Overview] Ninth Circuit: State Court Has Jurisdiction to Determine Whether Domestic Relations Order Was Qualified
Excerpt:"EBIA Comment: In a footnote citing a lengthy list of court decisions, the Ninth Circuit observed that every court that has considered the question has concluded that state courts have jurisdiction to decide whether a DRO is qualified."(Employee Benefits Institute of America)

[Guidance Overview] PBGC Proposal to Regulate Funding of Ongoing Plans Sponsored by Companies That Restructure Their Operations (PDF)
6 pages. Excerpt:"On August 10, 2010, the Pension Benefit Guaranty Corporation . . . proposed a regulation under which PBGC . . . would require a significant subset of employers that sponsor defined benefit pension plans to, in practice, fund their plans above the level required by the Pension Protection Act of 2006 . . . ."(Groom Law Group)

The Deal Lawyer's Guide to Hidden Employee Benefit Issues (PDF)
5 pages. (Executive Press, Inc. via Dechert LLP)

[Official Guidance] Text of PBGC Final Rule: Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits (PDF)
2 pages. (Pension Benefit Guaranty Corporation)

Milwaukee Company Pays Back Reduced Wages and Retirement Plan Match
Excerpt:"In announcing financial results for its fourth quarter and fiscal year ended June 27, 2010, Briggs&Stratton Corporation said it has paid back wages and 401(k) match previously reduced."(PLANSPONSOR.com)