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A no f f i c i a lspring 2012p u b l i c at i o no fA S P PAThe Next20 yearsof 401(k)

SERVICESTARTS HEREAutomatic Rollovers Made SimpleSMARTEFFICIENTINNOVATIVETPAs and Plan Sponsors turn to Millennium Trust Companyfor one simple reason—“We Care.” They choose ourAutomatic Rollover Solution because they know whenparticipants’ balances are rolled into an IRA with MillenniumTrust, they will be serviced by a live person who can answertheir questions and help make the transition easy.Not only do we provide a high level of service to IRA accountholders, we support TPAs and Plan Sponsors throughout therollover process. Regardless if it’s one or 5,000 accounts,we’ve made it simple for TPAs and Plan Sponsors to movemissing and non-responsive participants from their retirementplans into IRAs.Learn how simple it is to find SMART, EFFICIENTand INNOVATIVE Automatic Rollover Solutionswith Millennium Trust Company.Call 630.368.5614Scan this QR CodeGo to www.mtrustcompany.com/arp2001 SPRING ROAD, SUITE 700OAK BROOK, IL 60523WWW.MTRUSTCOMPANY.COMMillennium Trust performs the duties of a custodian and, as such, does not provide investment advice or sell investments, nor offer any tax or legal advice.

ContentsSpring 2012ASPPA in ACTION45 nominations open forASPPA’s Board of Directors60 Advocating for ASPPAMembers62 welcome new and RecentlyCredentialed Members64 ASPPA Calendar of eventsdepartments04 From the Chair06 From the PresidentCOVER STORY1008 Legislative UpdateThe Next 20 years of 401(k)The world is changing, and not just the 401(k) world. We beginwith a look at global trends affecting the pension system andconclude with selected predictions and strategy responses.PeTe SwiSheR, CPC, QPA, TGPCCover: Illustration by Michael Gibbswww.asPPa.org/PC1

ContentsPublished byEditor in ChiefBrian H. Graff, Esq., APMPlan Consultant CommitteeMary L. Patch, QPA, QPFC Co-chairJames T. Comer, IIIKrisy M. Dempewolf, CPC, QPA, QKAJohn Feldt, CPC, QPAJohn Frisvold, QPA, QKACatherine J. Gianotto, QPA, QKAWilliam C. Grossman, QPARonald A. Hayunga, QKA, QPFCBarry KozakMichelle C. Miller, QKANorman F. Pierce, QPFCDavid A. Pitts, MSPADavid J. WitzEditorSteven F. SullivanProduction Manager and Associate EditorTroy L. Cornett28Technical Review BoardMichael Cohen-GreenbergBarry KozakMarjorie R. Martin, MSPARobert M. Richter, APMNicholas L. Saakvitne, APMAdvertising SalesJeff HoffmanFred UllmanDesign and LayoutNickolena SidlerTechnical Articles20 Form 8955-SSA ParticipantStatement: Clearing Up theConfusionDAviD BenBow24 Let’s Try a Modern Approachto Plan LoansSTePhen SAxon28 Are You a Self-Proclaimed ora Recognized expert?DAviD wiTz32 Conducting Business UnderCircular 230SheLDon SMiThPracticeManagement Articles36 how Do You Assess theeffectiveness of Marketing?ALAn GRoSS40 Don’t Be Boring in theBoardroomGARY DeMoSS42 Gifts, Gratuities, Friendships,and Disclosures: what theASPPA Code of ProfessionalConduct RequiresLAURen BLooM46 The Fiduciary Assessment ofan investment AdvisorCARLoS PAnkSeP52 Cutting through the ClutterYAnniS koUMAnTARoS &ADAM Pozek54 what Pandora Can Teach UsAbout LearningSARAh SiMoneAUx2Plan Consultant sPring 2012ASPPA OfficersPresidentRobert M. Richter, APMPresident-ElectBarry Max Levy, QKASenior Vice PresidentDavid M. Lipkin, MSPAVice PresidentRichard A. Hochman, APMVice PresidentAdam C. Pozek, QPA, QKA, QPFCTreasurerRobert L. Long, APMSecretaryKyla M. Keck, CPC, QPA, QKAImmediate Past PresidentThomas J. Finnegan, MSPA, CPC, QPAPlan Consultant is published quarterly by the AmericanSociety of Pension Professionals & Actuaries, 4245North Fairfax Drive, Suite 750, Arlington, VA 22203.For subscription information, advertising, and customerservice contact ASPPA at the address above or800.308.6714, customerservice@asppa.org. Copyright2012. All rights reserved. This magazine may notbe reproduced in whole or in part without writtenpermission of the publisher. Opinions expressed insigned articles are those of the authors and do notnecessarily reflect the official policy of ASPPA.Postmaster: Please send change-of-address notices forPlan Consultant to ASPPA, 4245 North Fairfax Drive,Suite 750, Arlington, VA 22203.

PCFrom the ChairThoseMomentsBy Mary L. Patch, QKA, QPFCMaking a job change inevitablytriggers reflection. Sometimes themost vivid (and often amusing)memories tend to be those ofenlightenment. Whether tryingor embarrassing, the result ofpersistence or luck, the significanceof these memories becomes clearonly years later. We all have our ownspecial collection of these moments,where challenge, opportunity, andfate collide. These moments teach uscritical lessons in moving forward inour careers, and are carried with usthrough every step in this industry.One day, after I’d been workingfor an insurance company in Iowa forabout six months, I received a call froma client who had some issues with herplan’s post-tax account. So I studied upon ERISA and tried to learn as muchabout my clients as I could. Whena favorite client of mine who wasreviewing her reports called me to askwhy an employee who had passed awaythree years ago was still showing up onher reports, I felt like I had the ERISArules licked. I confidently explained toher the five-year break in service ruleand how our system would track this.There was silence on the other endof the line. A few seconds later, myclient asked, “Mary, don’t you think hebroke service?” I proceeded to explainthe system and why all individualswho had left their employment, forwhatever reason, would need to be4Plan Consultant sPring 2012retained due to ERISA’s rehire rules.Again, silence. Again, the question,“Mary, do you really think I’m goingto dig him up to rehire him?” Isaid nothing, but logged into therecordkeeping system and keyed inthat day’s date as the date he brokeservice. “He won’t appear on your nextreport,” I said. “I promise.”PunkedFast-forward a couple years to apoint in my career where I really (no,seriously, this time I really felt likeit) knew ERISA inside and out. I wasworking for a large bank in Milwaukee,Wisconsin when one day a call camein from a plan participant. “I’m notsure what’s going on with my account,but it shows that I have more than 1million as a balance?” Knowing theclient as I did and that the entire planhad only a little over a 1 million inassets, this truly puzzled me.After doing a little C.S.I. work, Inoticed he had negative shares in hisaccount. I contacted the recordkeeperand asked how that could be. I learnedthat a dividend had been posted tothe participant’s account and laterreversed. Then something clicked.“Didn’t you rebalance the plan afteryou posted the dividend?” I asked therecordkeeper. “If you did, the dividendwas rebalanced to the new fund andwas no longer in that investment whenyou reversed it.” They were amazed.My next stop was with a largerecordkeeping firm in Milwaukee. Itwas there that I learned an amazingamount of information about ERISAthat I never knew existed. I learnedhow to review and understand theterms of the plan document, how toreview a compliance-testing package,and how to answer auditors’ questionson each line item of the Form 5500. Ihad immediate access to some of themost talented ERISA consultants andattorneys in the business. At once Idiscovered that I had a passion for thisindustry; it was no longer just a job thatpaid the bills.FiduciaryAgain, thinking I knew everythingthere was to know about ERISArules, I joined the group at SteeleCapital Management. Lessonslearned there will accompany meto my next challenge. I’ll always begrateful to them for taking a chanceon my resume and giving me such anamazing opportunity to take all of myknowledge about ERISA and bring itto the next level.So now, as I embark on a newjourney with Trademark Capital, I takewith me these truths: Life is abouthow we grow and what we learn alongthe way. We never cease being worksin progress. We are always learningfrom each other, preparing for the nextchallenge. We rely on each other forsupport in braving the next step to thenext level. We are all part of a team,trying to make a difference.Mary L. Patch, QKA, QPFC, isdirector of retirement plan serviceswith Trademark Capital in New PortRichey, Fla. She is also chair of thePlan Consultant Committee.

With you when your retirement decisions affect everyoneThere’s a lot of pressure on you every day — your employees are all relying on you to help them achieve afinancially secure retirement, which is even more challenging in today’s economic environment. And that’swhy, as a fiduciary, it’s important for you to have a top-tier provider to help safeguard your retirement plan.At Wells Fargo, our broad range of experts provide the fiduciary support services you need to give you thepeace of mind that comes from knowing you are taking steps to minimize your risk and fulfill your fiduciaryobligations. To learn more, call a Wells Fargo Institutional Retirement representative at 800-690-9721.Investment and Insurance Products:NOT FDIC-InsuredNO Bank GuaranteeMAY Lose ValueRecordkeeping, trustee, and/or custody services are provided by Wells Fargo Institutional Retirement and Trust, a business unit of Wells Fargo Bank, N.A. This information andany information provided by employees and representatives of Wells Fargo Bank, N.A., and its affiliates, including fiduciary support, is for educational purposes onlyand does not constitute investment, financial, tax, or legal advice. Please contact your investment, financial, tax, or legal advisor regarding your specific needs andsituation. 2012 Wells Fargo Bank, N.A. All rights reserved.

PCFrom the PresidentHandlingthe ToughDecisionsBy Robert M. Richter, Esq., APMASPPA is more than 8,000 membersand growing! Our increasedmembership is a testament to thequality of our organization. It’s alsoa result of the expansion of ourmembership into new categoriesof professionals who are part ofour industry. This expansion hasmade us more diverse, not onlywith respect to our professionalbackgrounds, but also with respect toour views on how to improve ASPPAand the private retirement system.One of the negative consequencesof having a diverse membershipis an increase in the number oftough decisions ASPPA must make.Tough decisions are the ones thata substantial number of membersdisagree with. Many of you willassume the tough decisions relateto retirement plan policy, andthose issues do receive most of thespotlight. But there are many otherissues that affect the operation ofASPPA and the delivery of services toyou. These can range from Code ofConduct modifications to surchargesfor not staying at an onsite conferencehotel to granting reciprocity for aprofessional designation granted byanother industry-related entity.So how does ASPPA make these6Plan Consultant sPring 2012tough decisions? Some believedecisions are made behind closeddoors with heavy influence by asmall group of people or firms. Thisis simply not the case. As with anydecision-making process, whether itbe in business or your personal life,there is prioritization and delegationof authority. This helps ensuredecisions are made at an appropriatelevel within the organization. Youdon’t want the top executive decidinghow many staples to order for theoffice. Similarly, you don’t want theoffice clerk designing products.In ASPPA, decisions must bemade in a manner that is consistentwith our stated goals: (1) to educateall retirement plan professionalsand; (2) to preserve and enhance theemployer-based retirement system.In addition, we’re a professionalsociety, not a trade association. Inother words, we’re an organizationof individuals and we don’t takepositions solely to support a businesspractice or structure.The major decisions withinASPPA are handled using apartnership approach. There isa partnership between volunteermembers and the ASPPA staff. Thisis why our major committees havea minimum of two co-chairs: onestaff member and one volunteermember. This structure also appliesto our governance. In addition to theBoard of Directors and ExecutiveCommittee, for example, we havea Management Council (MC). TheMC consists of the president, thepresident-elect, and the executivedirector/CEO (Brian Graff). Thus,there is member representationand participation at the highestdecision-making levels of authoritywithin ASPPA.As you expect, the level ofdecision-making autonomy variesdepending on the purpose ofthe group. In our GovernmentAffairs Committee (GAC), forexample, subcommittees makerecommendations on certain policyor substantive legal positions thatmust then be approved by the overallco-chairs of GAC. Most issues areroutine and it’s easy to identify theappropriate level of decision-makingauthority. Likewise, it’s fairly evidentwhen there are issues that areparticularly divisive or questionableand need to be elevated to a higherdecision-making authority.This is not a failsafe process butit’s imperative that ASPPA continueto be able to take positions oncontroversial issues. We can’t allowour diversity to paralyze us solelybecause of fear we might upset someof our members or businesses.Robert M. Richter, Esq., APM, isvice president of SunGard Relius inJacksonville, Fla. He is also the currentpresident of ASPPA.

Do you know whichorganization provideseducation to millions ofAmericans

LEGISVTILAEUPDTEALynn Jenkins,Champion ofSavingsRep. Lynn Jenkins (R-Kan.) has represented the2nd District (which includes the state capitalTopeka) since her election to the U.S. Houseof Representatives in 2008. She is a CertifiedPublic Accountant by profession and brings nearly20 years of experience helping individuals andsmall businesses manage their finances to theHouse of Representatives. She also served inthe Kansas House and Kansas Senate and as the37th Kansas State Treasurer. Plan Consultanteditor Steve Sullivan recently sat down withCongresswoman Jenkins to elicit her views ontax reform and the importance of developingrelationships with elected representatives.PC: As a member of the House Waysand Means Committee, you’ll be inthe middle of tax-reform efforts. Youreducation and experience as a CPAwould seem to make you particularlywell-suited for this job. How muchdo you think your practical businessexperience has helped you in your roleon the committee?8Plan Consultant sPring 2012lJ: So often the skill sets necessaryto be a successful tax practitioneror CPA aren’t necessarily the skillsets necessary to get elected. Butin this particular case, after havingbeen elected and appointed to theWays and Means Committee, I thinkit’s very beneficial to have someonewho’s been on the receiving end oftax policy, seen it through the lensof small businesses and individualemployees and employers. I think itprovides a unique perspective. I thinkI’m the only CPA on the committeeand I think it’s beneficial to thecommittee and the nation to havesomebody with that view.PC: You’ve been supportive ofthe private retirement system. Didyour experience before you came toCongress contribute to your supportof savings incentives?lJ: Absolutely. In my time as a statelawmaker with the House and theSenate, and then during my yearsin the Treasurer’s office in Kansas,one of the things I championed wassavings. We’ve had a negative savingsrate for so long in this nation. We hada tough time getting people to start tosave but it’s on the decline again. Aswe ask the government to do less andless for people, I think it’s importantto encourage people to do more forthemselves. Savings is an importantingredient of that.PC: You’ve said we need fundamentaltax reform that simplifies the taxcode. How do you think fundamentaltax reform will affect the currentretirement savings tax incentives?lJ: Our tax code is broken. We’vegot a very complicated, costly,confusing tax code. Many peopleare fond of saying that it’s almost10 times the size of the Bible withno good news. We need to turn iton its ear and I think the goal isto do so by broadening the baseand getting rid of the underbrush.But in doing that, we have to becareful not to do more harm to theeconomy than we do good. Once

again, as we ask individuals to domore themselves and the governmentto do less, there are certain thingswe need to be cognizant of: how itwould affect savings, the housingmarket, charitable contributions.I believe there are going to beseveral exceptions to the rule ofeliminating all the preferences inthe tax code. The code should bestructured to make savings easier,not more difficult. If we’re goingto ask individuals and charitableorganizations to do more themselves,we can’t cut funding and take awaytax preferences all at the same time.PC: The Ways and MeansCommittee has been holding hearingson tax reform, and Chairman Camphas already put out a discussion draftfor international tax reform. Do youexpect we’ll see a discussion draft forindividual tax reform? If so, could wesee it later this year?lJ: Well, my crystal ball isn’t tooclear these days. We do have theinternational piece out there indiscussion and I believe the chairmanwas wise to approach it that way. Wehave good feedback from businesses onhow they would like to see it structuredand tweaked and adjusted in order tomove forward. So I would anticipatethe next step would be domesticcorporation and individual reforms.This is a little tougher deal. There’sless agreement on a bipartisan basis onthose cases, but I think you can expectto see the chairman and the committeeto march forward in that regard. I’m notcertain if we’ll see discussion draft bythe end of this year but I think that’sthe intent of the chair.PC: You’ve met with some ASPPAmembers about the importanceof retirement savings. Have thesemeetings with retirement planprofessionals been helpful to you?How important is it that other ASPPAmembers talk to their member ofCongress about the importance of taxincentives for retirement savings?lJ: I think it’s imperative. This is arelationship business. It’s importantfor anyone who has an issue thatrelates to government to stand upand get involved, to take it uponthemselves to get to know theirelected representatives and helpeducate, be part of the solution.I encourage all ASPPA membersto continue to do that. It’s reallyinvaluable. We in Congress don’tknow everything, so we have to relyon people who do understand thisstuff. It’s just an education process,so I hope members will take thatseriously. It’s best to make that contactand develop the relationship before youeven need anything, so you’re seen assomeone elected officials can call onwhen you’re faced with an issue thataffects your industry.PC: Aside from the meetings whenASPPA members come to CapitolHill to meet with you personally,what other ways can be effectivein communicating with membersof Congress?lJ: Well, for me it goes back to buildingrelationships. We’re here in Washingtonconducting business three or four daysa week. Most of us go home on theweekends and we have weeks at homewhen we work in our districts. I thinkit’s beneficial for ASPPA members toinvite their member of Congress out,and maybe the staff person who handlesthat particular issue, to find out whattheir questions are, show them the innerworkings of whatever it is you do. That’squality time in building the relationship,staying up close and personal, beingable to connect the face with the name.So when something comes up in aconference committee that’s related tosavings or 401(k)s, I’ve got someone inthe Rolodex I can pick up the phone andcall and get a straight answer.www.asPPa.org/PC9

The Next20 yearsof 401(k)We’ll need to save morethan we are now to pay forretirement and retiree healthcare. And we’ll need anarmy of sensibly regulatedfiduciaries selling andservicing retirement plans tomake it happen.by Pete Swisher

the world is changing, and not just the401(k) world. Below are some thoughtsfor the coming decades, assembled intoa pattern with guesses about what it allmeans for the private pension systemand those who serve it.

Barry Max Levy, QKA Senior Vice President David M. Lipkin, MSPA Vice President Richard A. Hochman, APM Vice President Adam C. Pozek, QPA, QKA, QPFC Treasurer Robert L. Long, APM Secretary Kyla M. Keck, CPC, QPA, QKA Immediate Past President Thomas J. Finnegan, MSPA, CPC, QPA Plan Consultant is published quarterly by the American

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