[Guidance Overview]
In-Plan Roth Conversion Issues Excerpt: "[W]e believe it is best to wait for formal IRS guidance before amending the plan to add in-plan Roth conversions. However, we have received numerous calls that represent the plan sponsors concerns about the tax consequences of not permitting the conversion in 2010. This coupled with the fact that the end of the year is so administratively close has reinforced the urgency to provide answers to our clients' questions of how to make in-plan Roth conversions happen this year. This article is our response to those questions and some additional outstanding issues."
(McKay Hochman Co.)

[Guidance Overview]
Chart: Amendments to EGTRRA Defined Contribution Plan Documents The chart is revised as of October 15, 2010.
(McKay Hochman Co.)

[Guidance Overview]
Social Security Benefits Will Not Increase in 2011 (PDF) 1 page. Excerpt: "The Social Security Administration has announced key Social Security numbers for 2011."
(Buck Consultants)

[Guidance Overview]
DOL's Long-Awaited Disclosure Regulations for Plans that Permit Participant-Directed Investment Features Excerpt: "Given the breadth of the disclosure changes, employers, plan administrators, and fiduciaries should start to consider how they will comply well in advance of the effective date (which, for most plans, will be January 1, 2012). In addition to the new types of disclosures that will be required, most plans will need to accelerate the frequency with which disclosures are made."
(Ballard Spahr LLP)

Retirement Income Adequacy for Today's Workers: How Certain, How Much Will It Cost, and How Does Eligibility for Participation in a Defined Contribution Plan Help? (PDF)
Pages 13-20 of 24 pages. Excerpt: "This analysis builds on EBRI's Retirement Security Projection Model (RSPM) to determine how much households need to save each year until retirement to maintain a probability level they will be able to afford simulated retirement expenses for the remainder of the lifetime of the family unit."
(Employee Benefit Research Institute)

Pension Plan Distributions: The Importance of Financial Literacy
Excerpt: "This chapter examines workers' plans to take lump sum distributions versus life annuities from employer retirement plans. The analysis is based on before and after surveys of retirement eligible workers who attended employer-provided retirement planning seminars."
(The Pension Research Council; registration required to download papers)

Implications for Retirement Wellbeing of Financial Literacy and Planning
Excerpt: "We show that financial illiteracy is widespread among older Americans, particularly women, minorities, and the least educated. We also find that the financially savvy are more likely to plan and to succeed in their planning, and they rely on formal methods such as retirement calculators, retirement seminars, and financial experts, instead of family/relatives or co-workers. These results have implications for targeted financial education efforts."
(The Pension Research Council; registration required to download papers)

The Outlook for Financial Literacy
Excerpt: "[T]he global financial crisis suggests that poor financial decision-making can have substantial costs not only for individuals but also society at large. This volume focuses on key lessons for financial decision-making in the wake of that crisis, exploring how financial literacy can enhance peoples' skills and abilities to make more informed economic choices."
(The Pension Research Council; registration required to download papers)

Why No Social Security COLA for 2011?
Excerpt: "For a COLA to have been triggered for 2011, the CPI-W would have had to not only increase, but increase beyond the highest point it had reached at the end of a previous third quarter, i.e. that of 2008. Although the CPI-W has rebounded modestly over the past year, increasing by 1.4 percent, it has not surpassed its September 2008 level, and hence there will be no COLA for 2011."
(National Academy of Social Insurance)

The Joint Labor Supply Decision of Married Couples and the Social Security Pension System
Excerpt: "The current U.S. Social Security program redistributes resources from high wage workers to low wage workers and from two-earner couples to one-earner couples. The present paper extends a standard general-equilibrium overlapping-generations model with uninsurable wage shocks to analyze the effect of spousal and survivors benefits on the labor supply of married couples."
(University of Michigan Retirement Research Center)

Changes in Final Participant-Level Defined Contribution Plan Fee Disclosure Regulations (PDF)
6 pages. This document highlights the changes found in the final rule at http://www.americanbenefitscouncil.org/documents/dol_401k-participant_finalreg101410.pdf.
(American Benefits Council)

An Actuarial Perspective on the 2010 Social Security Trustees' Report (PDF)
8 pages. This is an annually updated issue brief.
(American Academy of Actuaries)

How Would You Fix America's Retirement System?
Excerpt: "Retirement USA a year ago asked that question in advance of a conference on ''Re-Envisioning Retirement Security' in seeking proposals for an alternate retirement system to replace what its membership says is a failed system of 401(k)s."
(TheStreet.com)

Audio and Transcript: Working Hard to Save for Retirement? Work Harder
Excerpt: "The weak economy is driving up concern about retirement saving. The Employee Benefit Research Institute, which studies retirement planning, does surveys on Americans' attitudes about retirement. As recently as four years ago, its poll found that 27 percent of respondents said they were very confident they could live comfortably in retirement. This year, just 16 percent said that."
(NPR)

Banks Shared Clients' Profits, but Not Losses
Excerpt: "Here is the deal: [pension f]unds lend some of their stocks and bonds to Wall Street, in return for cash that banks like JPMorgan then invest. If the trades do well, the bank takes a cut of the profits. If the trades do poorly, the funds absorb all of the losses. The strategy is called securities lending . . . ."
(The New York Times; free registration required)

More Advocates Come Forward on San Francisco Pension Reform Measure
Excerpt: "If passed, Proposition B would raise city and county worker contributions to their pension plans to between 9 percent and 10 percent, and employees would have pay half of their dependants' health care costs. That could amount to hundreds of dollars more per month."
(Appeal Media, LLC)

[Opinion]
Reading the New DOL Fee Regulation Excerpt: "What has come to be known as the Fee Regulation is promulgated pursuant to section 404(a) of ERISA, the general fiduciary obligations, not as an amendment to the regulation under section 404(c). The Department wanted to make sure that its regulation applied whether the plan sponsor sought 404(c) treatment for its plan or not."
(Pension & Benefits Blog)

[Opinion]
Low Expense 401(k) Can Trump a High Match from Employer Excerpt: "Workers in . . . expensive plans would need to have a 50 percent employer match just to bring them back to the 5.3 years of final income that workers in a low-cost plan . . . will accumulate. In a typical large plan with expenses of 1 percent a year, it would take about a 20 percent match just to make the accumulation equal what employees in low-cost plans can accumulate."
(The Dallas Morning News)

[Opinion]
Mercer Quits Public U.S. Defined Benefit Funds' Investment Consulting Excerpt: "The company will continue to offer investment consulting services to plans outside of the U.S. and to private DB plans in the U.S."
(Leo Kolivakis)

[Opinion]
Pension Benefits for Current Employees Could Face Legal Challenges Excerpt: "As local governments scramble to cut costs to fill massive holes in their budgets, current workers' promised future benefits -- which don't have explicit constitutional protection in some states -- could be vulnerable."
(The Huffington Post)

[Guidance Overview]
Form 1099 Series Penalty Increased Excerpt: "On September 27, 2010 President Obama signed The Small Business Jobs and Credit Act of 2010 (H.R. 5297) (SBJCA), which primarily provides tax cuts and better access to credit for small businesses. Section 2102 of the law increases the penalty for not timely filing or furnishing the Form 1099 series."
(McKay Hochman Co.)

[Guidance Overview]
Substantiation Requirements Relaxed for Employer-Provided Cell Phones (PDF) 3 pages. Excerpt: "This issue has been a source of widespread frustration for several years, with industry groups criticizing the treatment as outdated and out of sync with the widespread use, and considerably reduced costs, of cell phone technology today."
(Drinker Biddle & Reath LLP)

FDIC Guidance on the Payment of Severance by 'Troubled' Institutions and Covered Companies
Excerpt: "The bottom line is that the new guidance prohibits a troubled institution from making, or agreeing to make, any severance payments unless the payments fall within one of the three permissible payments that a troubled entity may make - and even then, the institution must receive prior supervisory approval to make the payments."
(Michael S. Melbinger via Winston & Strawn LLP)

Financial Capability in the United States: Consumer Decision-Making and the Role of Social Security
Excerpt: "This survey provides information to assess how American households make financial decisions, how they are faring under current economic conditions, and in what ways financial knowledge contributes to financial capability."
(University of Michigan Retirement Research Center)

New IRS Guidance on Identification Numbers for Tax Return Preparers
Excerpt: "All preparers will need to be registered in the new system, which is available now, and obtain a [Preparer Tax Identification Number] before filing any return after December 31, 2010."
(Wolters Kluwer)

ERISA Summary Plan Description Requirements
Excerpt: "Although the summary plan description must be drafted in accordance with two Department of Labor regulations, it does not have to be called 'The Summary Plan Description.' This article describes the general content and distribution requirements of the summary plan description."
(HGExperts.com)

Employee Ownership Update for October 15, 2010
NCEO Executive Director Corey Rosen discusses the following: President Obama says employee ownership should be encouraged. A new report from the Treasury finds ESOPs held about 15% of the total assets in non-government corporate retirement plans in 2007. A new NCEO issue brief examines wellness programs in employee ownership companies. Facebook and Zynga have announced they will charge employees substantial fees to sell shares on secondary markets.
(National Center for Employee Ownership)

[Opinion]
An Actuarial Autopilot Is Necessary If Congress Won't Bite the Bullet to Control Social Security and Medicare Costs Excerpt: "The president's fiscal commission would be foolhardy to accept the rose-colored projections in the latest trustees report without offering a Plan B that would kick into effect if reality turns less rosy. My suggestion is that in years when the actuarial assumptions are not met, there should be automatic adjustments on the benefits side so that we don't keep digging a deeper hole."
(Governing)

Legal Update 2010
in Michigan on November 18, 2010
presented by International Society of CEBS - West Michigan Chapter

New Reporting Rules and Employee Disclosures: Health Reform Checklist for 2011
Nationwide on October 14, 2010
presented by EBIA / Thomson Reuters

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US Labor Department Obtains Appointment of Fiduciary to Manage Abandoned 401(k) Plan of Defunct Missouri Company U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

US Labor Department Sues to Appoint Independent Fiduciary for 401(k) Plan Abandoned by Medford, Mass., Employer U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Access to 401(k) Plan a Big Boost to Retirement Income Adequacy Employee Benefit Research Institute (EBRI)

2011 Dissertation Fellowship Program Center for Retirement Research at Boston College

ASPPA to Release TPA Owner Survey American Society of Pension Professionals & Actuaries (ASPPA)

New Retirement Mindscape II Study: Research Reveals Stark Differences in How Men and Women Think about Retirement Ameriprise Financial

The Hartford Launches New Educational Program for Employer-Sponsored Retirement Plans The Hartford Financial Services Group

No Change in Social Security COLA Offers Good and Bad News, Says Wolters Kluwer Law & Business Wolters Kluwer Law & Business

PlanTools Releases 408(b)(2) Disclosure Reporting Solution PlanTools

Securian Article Helps Plan Sponsors Decide What Kind of 401(k) Fiduciary They Want to Be Securian Financial Group

Journal Communications Reinstates Enhanced 401(k) Matching Contributions and Amends Other Retirement Plans Journal Communications, Inc.

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