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Corporate Pensions in Turbulent Economic Times: An Overview of Key Issues and Options for DB Plan Sponsors

"This article is intended to make plan sponsors aware of the most common reporting and regulatory issues that arise in an economic downturn and summarize the options for addressing serious pension funding challenges. We also discuss the recently passed pension funding relief and possible future changes to the funding rules under [ERISA] and the Internal Revenue Code[.]"

Practical Pointers for Plan Fiduciaries in Uncertain Economic Times

Excerpt: Under the Employee Retirement Income Security Act (ERISA), a plan fiduciary is not a guarantor of positive investment performance. However, ERISA does require a plan fiduciary to follow a prudent process in selecting and monitoring investment options. In light of recent market developments, plan fiduciaries should keep in mind that, while the recent market conditions may be rocky, plan investments generally are designed to be held over the long term. In the meantime, consider the following steps[.]

Some ESOP Issues in Tough Economic Times

Excerpt: Many companies have been experiencing financial difficulties over the past year. In some cases, companies have already or will reduce their workforce or close a facility. Those actions impact an ESOP in unique ways.

The Economic Benefits of Paid Parental Leave

"Economists have found that with paid leave, more people take time off, particularly low-income parents who may have taken no leave or dropped out of the work force after the birth. Paid leave raises the probability that mothers return to employment later, and then work more hours and earn higher wages. Paid leave does not necessarily help businesses -- but it does not seem to hurt them, either."

The Economic Case for Paternity Leave

"More maternity leave might sound like a great idea, but as long as mothers are the only parents taking leave, longer stints at home actually worsen job discrimination against them and make them less likely to pursue a career. Rather, as the experiences of Sweden, Iceland, and a handful of other countries show, the secret to keeping mothers in the workforce lies not in giving them more time off, but in getting more fathers to stay at home instead."

Obesity: The Economic Case for Action

"[F]or the first time in U.S. history, our children's generation will live shorter lives than their parents. This epidemic is taking an enormous toll on our nation's fiscal health too: Obesity is one of the leading contributors to rising health care expenses in America, costing an additional $168 billion each year."

What Does the Economic Downturn Mean for Employee-Owned Companies?

Excerpt: For most companies, this won't be an easy time. There will be pain. In these difficult conditions, leaders must strike the right balance between involving employees in determining how to go forward, and taking responsibility for some of the hard decisions. Where sales levels will simply no longer support the existing payroll, for example, something will have to be done. Leaders should solicit ideas and preferences from the employee-owners as to what exactly should be done to deal with that reality. People may be open to cutting salaries for all in lieu of laying off some - or individuals may volunteer to reduce their hours to a part time role. At some employee-owned companies, young single employees have even volunteered for layoff where necessary to keep a family breadwinner on the payroll. All such creative measures should be considered. Still, there will be circumstances in which hard decisions - even unpopular ones - will be required. Employees may be uncomfortable with the notion of suggesting that colleagues should lose their jobs. Final decisions, therefore, must be the responsibility of management, who may sometimes best serve the company by being the 'bad guy.'

Measuring the Economic Value of Pensions: Calculation Confusion Has Implications for Social Security (PDF)

"The aim of this paper is to increase understanding of the importance of pensions and Social Security as sources of income and wealth in retirement.... [Current Population Survey data from the U.S. Bureau of Labor Statistics] on pension incomes received in retirement understate the full contribution pensions make to supporting retirees. If one is to avoid understating the role of pensions, a great deal of caution is required. Pension income and wealth measures vary when they are measured for the same person, and for the same pension at different times in the life cycle." [Working paper no. 2012-268]

Employee Benefit Issues for Employers During Times of Economic Uncertainty: Group Employee Terminations

"[E]mployers often provide enhanced benefits for employees losing their employment as part of a group termination.... What are the impacts to our 401(k) plan for a group termination? ... What about severance? ... What happens to health coverage for employees who are terminated? ... How are outstanding stock options or other equity incentive plan awards treated? ... Will the company need to make payments on deferred compensation plans?"

The Road to Economic Recovery: A Proposal to Support Health Care in America (PDF)

13 pages. Excerpt: "The economic recession gripping this nation calls for immediate and swift action. The ripple effects of the financial market crisis, the subsequent rise in unemployment and the loss of job-based health care coverage has impacted hospitals' ability to continue to serve their communities. This pressure, coupled with other payment pressures, is leading to a decline in hospitals' financial health at a time when demand for health care services is growing. Not only could the health of communities across the country be compromised if action is not taken now, but the economic health of those communities also could suffer. As the second-largest private-sector source of jobs ? 5 million nationwide ? hospitals play a critical part in our nation's economy. Every dollar spent by a hospital supports more than $2.00 of additional business activity in the community." [Jan. 6, 2009]