Notice 2009-22 provides interim rules regarding asset valuation methods that are permitted to be used
by single employer defi ned benefi t pension plans for minimum funding purposes pursuant to changes
made by the Worker, Retiree and Employer Recovery Act of 2008 (WRERA).

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The promise of change from President Obama raises questions and speculation among America’s business community.

Continued economic recession, rising unemployment and costly health insurance premiums are areas in which reform needs to happen. The question of what impact it will have on how we do business is still a concern.

Elliot Dinkin, Cowden Associates’ Executive Vice President offers his expert insight in the following article.

http://www.post-gazette.com/pg/09020/943007-28.stm

With executive pay a national focus resulting with increased shareholder activity, many argue the validity of “pay for performance.” Is “Pay for Performance” realistically based on performance for achieving corporate growth targets, or is it an accounting device to artificially inflate large bonuses?

Compensation expert Elliot Dinkin offers his perspective on the executive pay issue.

http://www.pittsburghlive.com/x/pittsburghtrib/business/s_612895.html

You’re invited to participate in Cowden Associates’ survey. All participants receive a complimentary detailed report and are invited to the survey results presentation.

Cowden Associates, the region’s leading independent actuarial and employee benefit consulting firm has opened its 2009 Tri-State Area Defined Contribution Plan Sponsor Survey for participation. This is Cowden’s third annual survey and responses are due April 30, 2009.

The results are a valuable tool that captures credible and dependable data on basic plan and contribution information, plan features and employer insight components.

Cowden’s final survey report will be available in late summer, and by participating, you will receive a complimentary copy of the report.

Click here to participate in the Cowden Associates 2009 Tri-State Area Defined Contribution Plan Sponsor Survey.

Cowden Associates’ Executive Vice President Vince Wolf spearheads this annual endeavor, and presented the results. His presentation addressed influences on trends. He anticipates a downward pressure on trends revealed in this year’s findings resulting from the push for reform. Legislative activity surrounding the economy is providing upward pressure on employer sponsored plan costs. Compliance with COBRA changes and mandated benefit changes, such as mental health parity, are expected to contribute to costs.

This much anticipated survey report attracted the interest of local media. To read more, click on the following links.

Locally, employers' health costs are on the rise
Click here to read the Pittsburgh Post-Gazette article

Regional survey finds employers' health costs up 7.2%
Click here to read the Pittsburgh Tribune Review article

We welcome the opportunity to customize and conduct and an employee benefits survey specific to your organization.

If you did not fill out this year's survey, you may purchase a copy at the cost of $250. To purchase the 2008/2009 Survey Report, please e-mail us, call us at (412) 394-9330, or fax your request to (412) 394-9324.

The 2007/2008 survey report is also available for download.

A new article by Jere Cowden of Cowden Associates, Inc., on 401(k) products has won high praise from his UBA colleagues.

UBA Co-Founder David LoCascio said the article is

"the single, best article I've ever seen on this subject. Bravo!"

In the article, Mr. Cowden explains the pitfalls of choosing retirement plan offerings and how plan sponsors can make the right choices.

Click here to read the full article.

Recently, Executive Vice President Vince Wolf talked with the Pittsburgh-Tribune Review about COBRA and who is most likely to use the coverage.

Click here to read the entire article.

The new law that was signed by President Bush on December 23, 2008, contains minimum required distribution relief for 2009, defined benefit plan funding relief and certain technical corrections to the Pension Protection Act of 2006 (“PPA”). The following is a summary of the major provisions:

• Suspension of minimum distribution requirements for 401(k), 403(b), IRA or 457(b) plans- The new law suspends minimum distribution requirements for 2009. Individuals age 70 ½ and older will not be required to take a minimum distribution from their retirement plans. However, this provision does not apply to minimum required distributions required to be taken in 2008, including the case of an individual who turns age 70 ½ in 2008 and is required to take a minimum distribution for 2008, no later than April 15, 2009. This provision also does not apply to defined benefit pension plans.

• Pension funding changes: smoothing permitted in valuing assets - Under the new law, plans can include expected earnings when calculating the value of plan assets using an averaging method. The rules permit this technique by using an average of up to a 24 month period, provided that at all times the value varies no more than 10% from the current fair market value of assets.

• Pension funding changes: extension of transition rules - The Act extends the transition to the new funding rules to the plan year beginning after 2008, for those at or below the phased-in funding rules. In determining the funding shortfall, only the funding target of 92 percent for 2008 and 94 percent for 2009 is taken into account. For example, if a plan was funded at 90 percent for 2008, the funding shortfall for 2008 would be two percent and the plan would be able to use the transition rules in 2009. The Plan would then need to fund 94 percent in 2009, rather than 100%. The transition rule does not apply to plans that are subject to the deficit reduction contribution for 2007.

• Pension funding changes: modification of benefit restrictions - To avoid restrictions on benefit accruals as a result of having a funded status less than 60%, the new law allows for plan years beginning on or after October 1, 2008 and before October 1, 2009 to look back to the prior year to determine their funded status.

• Pension funding relief: multiemployer plans - For plan years beginning during the period of October 1, 2008 through September 30, 2009, a multiemployer plan may elect to “freeze” their funded status at the same funding level as the preceding plan year. For example, a plan that is not in critical status for 2008 may retain that status for 2009. If a plan has already established an improvement program, the plan may elect to extend the current funding improvement (or rehabilitation) to 13 years (from 10 years).

• Technical corrections - The law contained various technical corrections aimed at clarifying certain rules, including the requirement to permit non-spouse rollovers out of plans, clarifying overall deduction limits for combined plans, and permitting rollovers from Roth 401(k) plans and Roth 403(b) plans to a Roth IRA.

Please contact any Cowden Associates consultant to discuss any questions or issues regarding the new law.

The IRS issued a notice announcing relief for certain retirement plans that do not have a written plan in place by January 1, 2009. The new guidance is for retirement plans covering employees at public schools, colleges and universities, and other tax exempt organizations. These retirement plans are often referred to as 403(b) plans after the relevant section in the tax code.

The IRS is extending the deadline for plan sponsors to adopt new written plans or amend existing plans to satisfy the requirement of the final 403(b) regulations because of difficulties expressed by numerous plan administrators in meeting the current deadline of January 1, 2009. This extension will give plan sponsors additional time to put their plan documents in place.

The IRS will treat these plans as meeting the requirements of 403(b) and the regulations during the 2009 calendar year if:

• By December 31, 2009, the plan sponsor of the plan has adopted a written 403(b) plan that is intended to satisfy the requirements of 403(b) and the regulations.
• During 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations.
• By the end of 2009, the plan sponsor makes its best effort to retroactively correct any operational failure during the 2009 calendar year to conform to the written plan.

The IRS plans to issue further guidance on 403(b) plans, including a revenue procedure establishing programs for 403(b) plans to obtain IRS approval of the plan document and allowing these plans to make remedial amendments to retroactively fix plan provisions under rules that are similar to those that apply for 401(a) qualified plans.

Notice 2009-3 is available on IRS.gov.

Cowden Advisers, Inc. is an investment advisory group that focuses exclusively on the needs of retirement plan sponsors and participants by providing fiduciary guidance and investment advice for qualified and non-qualified plans.

Please contact Jere Cowden or Elliot Dinkin at 412-394-9330 to discuss how Cowden Advisers, Inc. can provide fiduciary guidance to you and your plan.

As a plan sponsor, you are aware that Section 401(a)(9) of the Internal Revenue Code (IRC) requires retirees over age 70½ to take minimum required distributions (MRDs) from their defined contribution retirement plans. If the retiree fails to take a required MRD, there is an excise tax of 50% on the amount that should have been withdrawn. A retiree over age 70½ is required to take the MRD out of the plan by December 31.

The Internal Revenue Service has indicated they intend to issue relief within the next few weeks which would allow retirees to withdraw the calculated required percentage of their current balance versus their December 31, 2007 balance to satisfy Section 401(a)(9) of the IRC relative to MRDs.

Why This Will Help?

With the severe hit to current 401(k) plan balances, a retiree’s account balance most likely is much less today than it was on December 31, 2007. This relief will change the effective date used to calculate the MRDs affording the retiree to only withdraw the required percentage based on their current balance versus their December 31, 2007 balance.

What Should You Do?

Currently, we do not know what relief will be available for 2008, so we recommend you hold off on MRDs until the last possible minute, or until MRD relief is published. We will make every attempt to keep you informed of any events that unfold.

Please don’t hesitate to contact Jere Cowden or Elliot Dinkin at 412-394-9330 should you have any questions.