Retirement Plans Newsletter |
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| July 17, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
The SEC's Proposed Proxy Access Rules, Related Delaware Law Changes, and Proposed Federal Corporate Governance Legislation (PDF)
16 pages. Excerpt: "While the SEC's proposed proxy access rules are subject to comment and modification, given the recent amendments to the DGCL and the current political climate surrounding the introduction of federal corporate governance legislation, it is increasingly likely that stockholders will be afforded significantly expanded access to the proxy statements of public companies for the purpose of nominating directors. Accordingly, the remainder of this client alert provides an overview of: the SEC's proposed proxy access rules; proposed changes to the SEC's shareholder proposal rules to facilitate alternative proxy access regimes; recent amendments to the DGCL that take effect on August 10, 2009, including those relating to proxy access and reimbursement of proxy solicitation expenses and other matters; the proposed federal Shareholder Bill of Rights Act of 2009; and the proposed Shareholder Empowerment Act." (Paul, Hastings, Janofsky & Walker LLP)
[Guidance Overview]
Seventh Circuit Denies Reconsideration of 401(k) 'Fees' Case (PDF)
3 pages. Excerpt: "On June 24, the U.S. Court of Appeals for the Seventh Circuit denied the plaintiffs' petition for rehearing en banc in the John Deere 401(k) fees litigation. Hecker v. Deere & Co., Nos. 07-3605, 08-1224, 2009 WL 1797441 (7th Cir. June 24, 2009). The plaintiffs filed their petition in the wake of the Seventh Circuit's February 12, 2009 landmark decision dismissing their claims, the first of the many 401(k) 'fees' cases scheduled to be considered by the federal appellate courts." (Morgan, Lewis & Bockius LLP)
[Guidance Overview]
SEC Proposes New Disclosure Rules for 2010 Proxy Season
Excerpt: "The Securities and Exchange Commission recently proposed rule changes intended to increase the transparency of public companies' compensation and governance activities. The proposal focuses on disclosure of compensation and governance policies and practices, with an emphasis on activities that contribute to a company's risk profile. The SEC hopes to have the new rules in place for the 2010 proxy season." (Faegre & Benson)
[Guidance Overview]
SEC Proposes New Compensation and Governance Disclosures
Excerpt: "Both the companies that must make the disclosures and investors who are the intended beneficiaries of the disclosures should review the proposed changes and the many specific questions on which the SEC has specifically requested comment. Comments within the 60-day period following publication may assist the SEC in ultimately issuing an improved version of the requirements to take effect for the 2010 proxy season." (Sonnenschein Nath & Rosenthal LLP)
Helping Pre-Retirees Improve Their Retirement Outlook (PDF)
5 pages. Excerpt: "The Tenth Annual Transamerica Retirement Survey /1/, conducted by the Transamerica Center for Retirement Studies, provides insights to the challenges faced by pre-retirees. It also highlights opportunities to help pre-retirees recover from declines in savings balances and improve their chances of achieving a financially secure retirement." (Transamerica Center for Retirement Studies)
Summer 2009 Report of Results from Segal Study of Multiemployer Defined Contribution Plans (PDF)
4 pages. Excerpt: "This survey summarizes the results of that study, which reflects information for just under 140 funds, all but two of which are Segal clients. The study sample represents 9 percent of all multiemployer plans. Key survey findings include: An overwhelming majority of the DC plans in the study (82 percent) are companions to DB plans sponsored by the same unions and contributing employers for the same active workers. Although trustees direct investments for more than half of the DC plans in the study (58 percent), a large percentage of the plans (42 percent) allow participant-directed investments. A large majority of the multiemployer plans in the study (83 percent) offer payment options in addition to lump sums at retirement." (The Segal Group, Inc.)
A Qualified Commitment to DB Plans: Risk Management Amid a Steep Downturn (PDF)
24 pages. Excerpt: "Maintaining the funded ratio is an essential component of a successful DB plan management strategy, say sources. Throughout the interview program, executives stressed that their fundamental purpose in having a DB plan remains intact -- to provide a safe and secure retirement funding mechanism for employees at an acceptable cost. 'The issue on the asset side isn't to maximize your return,' says Mr. Valone. 'The issue is to make sure that when that last dollar needs to be paid out, you've got just one dollar left. It's a much different perspective on why you're investing. It's not to maximize your return; it's just really to make sure you've covered the liability, which gets into the whole risk side of the pension obligation.'" (Towers Perrin)
PSCA Releases Its First Survey on IRC Sec. 403(b) Plan Target-Date Funds
Excerpt: "According to a survey recently conducted by the Profit Sharing/401k Council of America (PSCA), nonprofit organizations are embracing target-date funds for their IRC Sec. 403(b) tax-sheltered annuities. The survey found that the majority of Sec. 403(b) plan sponsors offer target-date funds, and nearly one-fourth of organizations that do not currently offer such funds plan to do so within the next year." (Wolters Kluwer)
Delphi Retirees File Suit Over Pension
Excerpt: "A group of Delphi Corp. salaried retirees has filed suit, seeking an independent administrator to help stop the bankrupt auto supplier from terminating the white collar retirees' pension plan. Delphi has said that it was seeking to have the plan transferred to the U.S. Pension Benefit Guaranty Corporation. On Thursday, the Delphi Salaried Retiree Association filed a federal lawsuit in U.S. District Court in Michigan, asking the court to replace the plan's current trustees, who are Delphi executives, and appoint a new administrator 'loyal only to us.'" (Business First of Buffalo via bizjournals.com; free registration required)
2nd NAGDCA 2009 Survey of Defined Contribution Plans
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators, Inc.)
The Knowledge Congress Webcast Series (Advert.)
The Knowledge Congress’ Live Webcast on 401(k) Plans on 07/23/09 401(k)s have long been considered as a rock solid way to plan for retirement. In the wake of the recent economic tsunami, personal wealth has plunged leaving many employees form the executive suite to the mail room scrambling to reassess their 401(k) next egg. A key panel of thought leaders and experts will cover many of the most critical issues surrounding the 401(k) crisis with the goal to help you navigate through the pitfalls in the wake of these turbulent economic times. |
Links to Items on Executive Comp, Benefits in General
[Guidance Overview]EEOC Issues Employee Guidance on Waivers in Severence Agreements
Excerpt: "[M]ost important for the EEOC and for employers, the guidance explains in several parts that these waivers do not bind the EEOC, that they cannot be used to limit employees from filing charges even if the waivers are enforceable against the employees in court proceedings, and that any effort to do so or recover the consideration (usually severence) could be considered retaliation, which the waiver won't cover." (Workplace Prof Blog)
[Guidance Overview]
Understanding Waivers of Discrimination Claims in Employee Severance Agreements
Excerpt: "To minimize the risk of potential litigation, many employers offer departing employees money or benefits in exchange for a release (or 'waiver') of liability for all claims connected with the employment relationship, including discrimination claims under the civil rights laws enforced by the Equal Employment Opportunity Commission (EEOC) -- the Age Discrimination in Employment Act (ADEA), Title VII, the Americans with Disabilities Act (ADA), and the Equal Pay Act (EPA).[2] While it is common for senior-level executives to negotiate severance provisions when initially hired, other employees typically are offered severance agreements and asked to sign a waiver at the time of termination. When presented with a severance agreement, many employees wonder: Is this legal? Should I sign it? This document answers questions that you may have if you are offered a severance agreement in exchange for a waiver of your actual or potential discrimination claims." (U.S. Equal Employment Opportunity Commission)
[Guidance Overview]
Obama Administration Proposes New Legislation on Compensation Committee Independence
Excerpt: "Today, the Obama Administration delivered draft legislation to Congress that would seek to ensure that 'compensation committees are independent in fact, not just in name.' The proposed legislation has three main components . . . ." (Michael Melbinger via Winston & Strawn LLP)
[Guidance Overview]
SEC Proposes New Executive Compensation and Governance Disclosures
Excerpt: "The SEC has proposed expanding executive compensation disclosure requirements for reporting companies. A major focus of the proposed rules, released July 10, 2009, is the relationship between compensation policies and risk management. The additional disclosures would affect disclosure of compensation policies and their impact on risk taking; stock and options awards; director qualifications; company leadership structure; the board's role in the risk management process; and compensation consultants. The proposed rules also include amendments to Form 8-K and expand proxy disclosures. The SEC anticipates that the new requirements will be effective for the 2010 proxy season." (McGuireWoods LLP)
CEOs Openly Oppose Push for Say-on-Pay by Shareholders
Excerpt: "That executives oppose congressional noodling with their pay is unsurprising. What is surprising is that they are willing to go so public in their opposition, even though passage of a so-called 'say-on-pay' law is likely, says Dawn Wolfe, associate director of social research for Boston Common Asset Management." (USA Today)
Fact Sheet: Administration's Regulatory Reform Agenda Moves Forward: New Independence for Compensation Committees
Excerpt: "The Administration's proposed legislation takes three important steps to ensure that compensation committees have the independence and expert assistance they need to serve their important role: First, the legislation requires that members of the compensation committee meet exacting new standards for independence, just as Sarbanes-Oxley did for members of audit committees. Second, to ensure that committees are receiving objective advice, the legislation requires that any compensation consultants and legal counsel they hire be independent from management. Finally, the legislation requires that compensation committees be given the authority and funding to hire independent compensation consultants, outside counsel, and other advisers who can help ensure that the committee bargains for pay packages in the best interests of shareholders. At the same time, it requires that if the committee decides not to use its own compensation consultant, it explain that decision to shareholders." (U.S. Department of the Treasury)
Fact Sheet: Administration's Regulatory Reform Agenda Moves Forward: Say-On-Pay
Excerpt: "Today, as part of its push for comprehensive regulatory reform, Treasury delivered draft 'say-on-pay' legislation to Congress that would require all publicly traded companies to give shareholders a non-binding vote on executive compensation packages. Say-on-pay legislation - which was co-sponsored by then-Senator Obama in 2007 and also passed the House that year - would encourage greater accountability and better disclosure in setting compensation. The Administration is eager to support Chairman Dodd and Chairman Frank - both long-time advocates for say-on-pay - as they begin consideration of this legislation . . . ." (U.S. Department of the Treasury)
2009 TIAA-CREF Paul A. Samuelson Award Call for Entries
Excerpt: "The TIAA-CREF Institute invites you to submit an entry for the 2009 TIAA-CREF Paul A. Samuelson Award for Outstanding Scholarly Writing on Lifelong Financial Security. Submissions may be theoretical or empirical in nature, but must cover a subject directly relevant to lifelong financial security. The research must be in a book or article form and must have been published between January 1, 2008 and June 30, 2009. Submissions must be received by the TIAA-CREF Institute no later than August 28, 2009. An application must be returned with your submission." (TIAA-CREF Institute)
Meeting of July 15, 2009: Age Discrimination in the 21st Century: Barriers to the Employment of Older Workers
Excerpt: "In light of widespread layoffs, a significant spike in age discrimination charges, threats to employee benefits, and controversial recent court decisions, the U.S. Equal Employment Opportunity Commission (EEOC) [held] a public hearing Wednesday, July 15, 2009, at 10 a.m. (Eastern Time), at agency headquarters, 131 M St, NE, Washington, DC., to discuss age discrimination in employment. Experts will discuss the results of age stereotyping on older workers' ability to keep their jobs during layoffs or to find work afterwards and the effect of recent controversial Supreme Court decisions on enforcement of the Age Discrimination in Employment Act (ADEA). Panelists will suggest potential enforcement and policy solutions. In addition, representatives from recent ADEA cases will discuss their experiences. Finally, the Commission will issue a technical assistance document that explains terminated employees' rights and obligations when offered severance pay in exchange for a waiver of discrimination claims." (U.S. Equal Employment Opportunity Commission)
[Opinion]
Supreme Court Justice Ginsberg Calls ERISA 'Unfair'
Excerpt: "According to the Supreme Court, since the only remedy allowed under ERISA for a wrong-coverage decision was to force the insurance company to pay the benefit it should have paid to the insured in the first place, states could not allow a plaintiff to sue for a worsening of his condition or for pain, suffering, or death caused by the insurance company's decision. In her concurring opinion, Justice Ruth Bader Ginsburg joined 'the rising judicial chorus urging Congress and the Supreme Court to revisit what is an unjust and increasingly tangled ERISA regime.' Justice Ginsburg said the problem was that the Court, through a series of decisions, had made it that virtually all state-law remedies would be preempted. She then noted that a 'series of the Court's decisions has yielded a host of situations in which persons adversely affected by ERISA-proscribed wrongdoing cannot gain...relief,' and called for the current situation to be quickly remedied." (AnAmericanDay.com)
Press Releases
PBGC Moves to Protect Pensions at Nortel Networks Inc.Pension Benefit Guaranty Corporation (PBGC)
U.S. Labor Department Sues to Appoint Independent Fiduciary to Manage Abandoned 401(k) Plan of Former Denver-area Employer
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
U.S. Department of Labor Obtains Settlement Giving Former Cookeville, Tennessee, Company Participants Access to Their Retirement Funds
U.S. Department of Labor, Employee Benefits Security Administration (EBSA)
Fact Sheet: Administration’s Regulatory Reform Agenda Moves Forward: Say-On-Pay
U.S. Department of Treasury
Obesity Among U.S. Adults Continues to Rise
U.S. Department of Health & Human Services
Responsible Investment Not Losing Steam in Financial Crisis
Mercer
Curbing Executive Pay Incentives Would Devastate Shareholder Equity, Indicates Carnegie Mellon Research
Tepper School of Business at Carnegie Mellon
Cost of Prescription Co-Pays Increases in United States for Healthcare Organizations
Compdata Surveys
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