The DOL has announced two new rules to improve retirement security. As you may recall, the DOL announced final regulations in January 2009 in January 2009 before putting them on hold and ultimately withdrawing them in November 2009. One of the two new rules is a revised investment advice rule "limited to the implementation of the PPA statutory exemption relating to investment advice". Here is an overview of the proposed investment advice regulation:

We have recently discussed Creative Meeting Ideas and Using An Employee Committee to Informally Improve Communication. How to Make* Employees Listen explains that while you cannot force employees to listen, knowing your audience, setting an example, and trying to eliminate obstacles are three strategies to help you control your "communications team building culture" so that employees will decide to listen on their own. It also shares some engagement listening tools:

I will be the moderator of Government – Get Involved!, a panel presentation that will take a look at the current ESOP legislative environment. The session will be on Wednesday, March 3, as part of the Wisconsin Chapter Spring Conference and Awards Reception in Madison, Wisconsin:

The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) provided a waiver of the requirement to take Required Minimum Distributions (RMDs) for the 2009 plan year. The Retirement News for Employers – Winter 2010 Edition provides an example, noting that the first amounts distributed are RMDs from earlier years not yet distributed, followed by RMDs in the current year:

The Retirement News for Employers – Winter 2010 Edition provides a reminder that the deadline to make ESOP contributions for a calendar-year filer is March 15. With a valid extension, that date can be extended until September 15:

There has been a lot of positive ESOP legislation introduced in the 111th United States Congress:

We have previously discussed how the IRS Will Continue to Litigate Deductible Redemptive Dividends and some related cases. In Nestlé Purina Petcare Co. v. Commissioner of Internal Revenue, No. 09-1381 (8th Cir. 2010), the U.S. Court of Appeals for the Eighth Circuit affirmed the Tax Court's ruling (Ralston Purina Co. v. Commissioner, 131 T.C. No. 4 (September 10, 2008)) that found that IRC Section 162(k) renders payments to an ESOP that were distributed to terminated participants nondeductible under IRC Section 404(k) because they are in connection with a redemption of stock.

One of the themes in a recent The Ownership Culture Check-Up presentation was the importance of upper management's commitment to building a strong ownership culture. That commitment starts with the President and CEO. The CEO as Keeper of the Culture discusses the importance of strong leadership in developing and maintaining a strong ownership culture. By modeling and recognizing desired behaviors, the CEO of American Fidelity Assurance set the stage for a strong culture:

I will be presenting The Ownership Culture Check-Up on Thursday, March 4 at the Chicago Marriott Oak Brook Hotel as part of the Illinois ESOP Chapter Annual Conference: The Past, Present and Future of ESOP's:

The February 15, 2010 Employee Ownership Update is online and discusses the following

Citigroup Cleared in ERISA Fiduciary Duty Breach Case discusses how a court found that Citigroup did not breach its ERISA fiduciary duties in In re Citigroup ERISA Litigation, No. 07 Civ. 9790, 2009 WL 2762708 (S.D.N.Y. Aug. 31, 2009):

The Economy Is Bad, Change Everything—Wait, Let's Talk discusses the importance of employee engagement, especially in tough economic times, and addresses three employee engagement fallacies:

Good Developments in Worrisome Times provides an ESOP legislative update, focusing on the ESOP champions in the The 111th United States Congress and discussing the importance of having ESOP allies in Congress:

10 ERISA Insights for Employers shares some fiduciary insights from a recent ERISA litigation conference:

Four Creative, Low-Cost Ways to Educate Employees About Benefits discusses the challenges of educating and communicating the additions and changes to your employee benefits:

The CEO, President / VP HR relationship's impact on company culture discusses how the relationship between the CEO and HR are essential to building, improving, and sustaining a strong company culture. The article shares some changes that were implemented by Acuity to address the fact that employees did not feel connected and talked to by management:

Last May we discussed the Required Automatic Enrollment in IRAs Treasury Proposal that would require, effective January 1, 2012, "Employers in business for at least two years that have 10 or more employees would be required to offer an automatic IRA option to employees on a payroll-deduction basis, under which regular payroll-deduction contributions would be made to an IRA."

The IRS has released the 2010 report that debunks many of the common frivolous tax arguments:

Earlier this week we discussed ESOP Litigation that found that participants can pursue a fiduciary breach when a fiduciary Omits or Provides Misleading Financial Information to Participants. When Representations Regarding the Financial Condition of the Plan Sponsor Become Actionable Under ERISA provides additional analysis and discusses when intentionally connecting statements is actionable under ERISA:

Last month we explored the Benefit Payment Government Filings (IRS Forms 1099-R, 1096, 945). All IRS Forms 1099-R should have been furnished to the participants by February 1, 2010. 2010 Compliance Calendar shares some upcoming deadlines (assuming 12/31 plan year end):

• Benchmarking Around Peers and Goals
• Breaking Down Demographics
• The Plan's Match Ceiling
• Investment Education
• Automatic Savings Rate Increases
  

I will be presenting The Ownership Culture Check-Up next Wednesday, February 10, in Omaha and Thursday, February 11, in Cedar Rapids as part of the Iowa/Nebraska ESOP Winter Conferences: Generation ESOP:

What Does W-2 Compensation Really Mean? describes how the W-2 definition of compensation should generally be Box 1 of Form W-2, adjusted for elective deferrals (when applicable), and notes the complications of Roth deferrals and the problems with using Box 5 compensation:

US: ‛10 for 2010': New Year's resolutions defined contribution plan sponsors should make now shares a list of 10 resolutions for DC plan sponsors in 2010:

The February 1, 2010 Employee Ownership Update is online and discusses the following

Budget Calls for Tax Increases of $1.1 Trillion over Next 10 Years discusses the ESOP Association's position on the new budget proposal, warning that the ESOP community needs to be sharing the Benefits of ESOPs and making the case at the local level:

According to the court opinion, a plan representative contacted Balsley on two occasions in October 2007 to offer a lump-sum buyback of the stock in Balsley's plan account based on the December 31, 2006 stock valuation of $22.38. The representative indicated that cash may not be available in the future to buy back Balsley's shares, and that the lump-sum offer would not remain open, so on November 26, 2007, Balsley received a $1,318,422.15 distribution from the plan.

We have been discussing the ESOP distribution timing rules and the distribution timing rules applicable to all qualified plans. The Internal Revenue Code provides that a qualified plan may process distributions of $5,000 or less without the written consent of the participant.