The National Association of Government Defined Contribution Administrators, Inc. (NAGDCA)

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• The National Association of Government Defined
  Contribution Administrators, Inc. (NAGDCA)
• presents
• 2009 NAGDCAST 2
• Legislative Update of
• Defined Contribution Plans

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Program Introduction

• Mindy Harris
• Chief Financial OfficerMultnomah County, OR

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Many thanks to the following 2009 NAGDCAST series
sponsors

• Prudential
• TIAA-CREF
• Wells Fargo

• Great-West
• ICMA-RC
• ING
• Nationwide Retirement Solutions

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Continuing Education Credit

• Credits This NAGDCAST is worth 1.5 continuing
  education credits to InFRE CRA and CRC designees!
  
• To Receive Credit
• InFRE designees must report attendance at a
  NAGDCAST when they submit continuing education
  with their annual certification renewal.
• NAGDCA will provide InFRE with a final
  participant list (not registrant list) so that
  those seeking certification credits can be
  verified. Individuals must be signed in
  separately to receive continuing education
  credits.

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• THANK YOU!

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Todays Speakers

• Susan White NAGDCAs Legislative Counsel
• Mildeen Worrell Tax Counsel, Majority House
  Ways and Means Committee
• Diann Howland, Vice President, Legislative
  AffairsAmerican Benefits Council

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• Mildeen Worrell
• Tax Counsel, Majority House Ways and Means
  Committee

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401(K) Plan Fees Disclosure

• Current State of Legislation
• Expected Legislative Movement
• Role of Ways and Means Committee
• Role of Senate Finance Committee, HELP
  Committee
• Relation to Governmental Plans
• GAO Study On Other DC Plans

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Automatic Enrollment IRAs

• Role of Obamas Administration
• Policy Concerns Expressed
• Possible Alternative Approaches
• Expansion of Savers Credit
• Possible Legislative Path

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ROTH IRAs For Governmental Workers

• Legislative Update on Federal Workers
• Impact for State and Local Government Workers
• Legislative Possibility

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Our Current System What Can Be Improved

• Workers Not Currently in the System
• Weaknesses of the System
• Strengths of the System
• Possible Reform Areas or Proposals

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• Diann Howland
• Vice President, Legislative AffairsAmerican
  Benefits Council

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Overview

• Defined benefit pension plans
• Defined contribution plans

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Defined Benefit Pension Plans

• Worker, Retiree and Employer Relief Act
• Clarification of Pension Protection Act
• Technical Corrections
• 24-month smoothing of unexpected gains and losses
• Modification of transition rules to permit more
  plans to take advantage of four-year transition
  to 100 funding target
• Look-back rule for benefit restrictions
• Relief for multiemployer plans

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Defined Benefit Pension Plans

• Many plan sponsors received relief, but the
  funding emergency is on-going
• Current status for 2009 funding obligations on
  average still double obligations for 2008 (even
  after taking into account changes made in the
  2008 legislation)
• Identified impact on companies
• Plan freezes
• Cuts in programs, initiatives
• Lay-offs
• Curtailed matching contributions
• Credit limitations

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Defined Benefit Pension Plans

• Overcoming the Challenges
• Three principles to guide solutions
• Do not undermine the Pension Protection Act
• Returning plans to fully funded status as soon as
  possible
• Protecting employees from reduction or
  elimination of protected benefits

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Defined Contribution Plans Where Are We?

• Some Members have questioned whether the defined
  contribution system ought to be scrapped
• Most recent hearing in House Education and Labor
  Committee examining 401(k) plan fees
• More hearings expected in the House
• Requests for Information regarding target-date
  fund investments
• Numerous 401(k) related GAO reports underway
• DOL 401(k) fee disclosure regulatory projects
• White House memorandum restricting publication of
  pending regulations, delay of effective date and
  reopening of comment period
• Administrations budget proposing enactment of
  the Auto-IRA and expansion of the SAVERs Credit

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Defined Contribution Plans

• Key issues likely to be considered
• Coverage
• Adequacy
• Risk to participants
• Defaults
• Advice
• Cost
• To the government
• To participants
• Fiduciary duties
• Rremedies
• Fee disclosure

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Defined Contribution Plans

• Many of the Trade Groups are studying coverage
  issues
• American Benefits Council Paper Establishing
  Value in the DC System
• Defined contribution plans reach tens of millions
  of workers and provide an important source of
  retirement savings
• Employers make significant contributions into
  defined contribution plans
• Employer sponsorship offers advantages to
  employees
• Defined contribution plan coverage and
  participation rates have generally increased
• Defined contribution plan rules promote benefit
  fairness
• 401(k) plans have evolved in ways that benefit
  workers
• Recent enhancements to the DC system are working
• World-At-Work / American Benefits Council Survey
  
• Consistent with other savings patterns, Americans
  are generally still saving in their DC plans and,
  in some cases, are increasing their
  contributions plans

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Defined Contribution Plans

• Some key issues
• Support the voluntary retirement savings system
• Address coverage gaps via a multi-faceted
  approach
• One-size does not fit all
• Auto-IRA and expand the SAVERs Credit
• Maintain a tax structure that encourages employer
  sponsorship of plans
• Continue work on fee disclosure
• Keep features of plans that have worked well
• Other

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Summary

• Challenges
• Qualified plans
• Defined Benefit Pensions and Defined Contribution
  Plans
• Outlook for success
• Looking for common ground with groups with
  disparate views
• Education efforts
• Working with both House and Senate and the
  Administration
• Limitations of time and money

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• Susan White
• NAGDCAs Legislative Counsel

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Overview of NAGDCA Priorities

• Maintain Important Distinctions Between
  Governmental Defined Contribution Plans
• Support Transparent and Balanced Defined
  Contribution Plans, Fees and Disclosure of Fees
• Ensure Parity
• Maintain Exemption from Early withdrawal penalty
• Maximize Unused Flexible Account Dollars

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Overview of NAGDCA Priorities (cont.)

• Enactment of a Roth 457 Option
• Permit Non-Spousal Beneficiaries to Roll Assets
  to 457 and 403(b) Plans
• Extend the National Save for Retirement Week
  Resolution
• Increase population cap for Low Income Savers Tax
  Credit

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110th Congress Legislative Overview

• 2010 Federal budget
• Appropriations legislation
• Retirement related legislation

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House Committees on Ways Means and Education
and Labor Hearings and bills

• NAGDCA Testimony
• Committee on Ways Means Legislation
• Committee on Education Labor Hearings
• Committee on Education Labor Bills

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National Save for Retirement Week (NS4RW)October
18-24, 2009

• 2008 Review
• House Resolution 1294
• Co-Sponsored by Representatives Allyson
  Schwartz (D-PA) and Sam Johnson (R-TX)
• Passed on Suspension Calendar on June 26, 2008
• Senate Resolution 601
• Cosponsored by Senators Kent Conrad (D-ND) and
• Gordon Smith (R-OR)
• Passed Without Objection on September 18, 2008

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2009 Tax and Pension Outlook

• Tax Legislation
• Legislation Affecting Retirement Related Issues

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President Obama

• Retirement Agendas
• Social Security

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• Questions
• From
• Audience

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There will be a QA Session at the end of todays
presentation

• Live Written Questions Use the QA Panel
  located on the lower-right of your screen.

• Live Verbal Questions Use the Raise Hand
  function in the Participants Panel on the
  upper-right of your screen. If you wish to ask a
  verbal question, you must join the audio dial-in
  via your phone.

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