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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.
Court Affirms Denial of Severance Benefits.
Benefits Magazine; v49 no4 p 63 Apr 2012; journal article
Availability :
International Foundation of Employee Benefit Plans
Abstract :
In Caldwell v. PNC Financial Services Group Inc. et al., the District Court for the Southern District of Ohio upheld a plan administrator's denial of severance benefits. After repeated warnings about not meeting employment goals and being advised to resign, the plaintiff was not terminated but put on probation and later resigned. When denied severance, he claimed breach of contract. The court found the plan's discretion for individual decisions and compensation committee's process for benefits payments to be consistent with ERISA requirements, preempting the breach of contract claim. The court ruled that, to qualify for severance, an employee must be terminated by the employer, not to have resigned. The court also dismissed the plaintiff's claim of retaliation due to insufficient evidence.
[0161814]
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Denial of Severance Benefits Upheld.
Benefits Magazine; v49 no4 pp 57, 59 Apr 2012; journal article
Availability :
International Foundation of Employee Benefit Plans
Abstract :
The plaintiff in Carr v. Anheuser-Busch Companies Inc. was fired for taking equipment from an office in violation of company policy, though he was not criminally charged. When he later requested benefits, he was denied because of his willful misconduct. After an independent review, the decision was upheld. The District Court for the Eastern District of Missouri recognized the plan administrator's discretionary authority and deemed any procedural irregularities claimed by the plaintiff to be minor. The court found substantial support for the denial of severance benefits and dismissed the plaintiff's remaining objections.
[0161820]
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Severance Plans: The Promise and the Savings.
Parker, Philip; Benefits Quarterly; v28 no2 pp 21-27 2nd Qtr 2012; journal article
Availability :
International Foundation of Employee Benefit Plans
Abstract :
Employers offering severance benefits hope to gain recruitment and retention advantages, but with fair distribution and at reasonable costs. Beyond traditional severance plans funded by general assets or a trust fund, a second type is the supplemental unemployment benefit (SUB) plan. The SUB complements state unemployment benefits and is not subject to FICA payroll taxes, but it is an ERISA plan requiring documentation, compliance with regulations and administrative details and careful communications. One Fortune 500 company that adopted an outsourced SUB plan design and administration realized significant savings on severance benefits. Redesigning a severance plan can lead to savings up to 30 percent by coordinating with unemployment benefits and eliminating FICA taxes.
[0161893]
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Generous Severance Can Hamper Firm Performance, Says Study.
Dobson, Sarah; Canadian HR Reporter; v25 no2 pp 2, 26 Jan 30, 2012; journal article
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Abstract :
Research by Peggy Huang of Tulane University suggests that firms that provide severance contracts to their chief executive officers tend to underperform. In 2007, 55 percent of firms gave top executives several contracts, with 60 percent including an equity component. Considering 5,142 CEOs heading Standard & Poor's 500 firms, the firms awarding cash only performed worse than those providing some vested equity compensation. Details of the contract structure also matter, such as an accelerated vesting option. But severance arrangements can also have positive effects, dampening risk taking if well-constructed and encouraging positive results when the CEO's compensation is tied to strong corporate performance.
[0161702]
Court Requires Exhaustion of Administrative Remedies.
Benefits Magazine; v48 no11 p 55 Nov 2011; journal article
Availability :
International Foundation of Employee Benefit Plans
Abstract :
The Eighth Circuit Court of Appeals found the plaintiff in Angevine v. Anheuser-Busch Companies Pension Plan et al. failed to exhaust his administrative remedies before filing his claim in court. The defendant pension plan included a change in control clause which granted additional credited service if a participant was involuntarily terminated after a change in control. When the company was to be bought, the plaintiff received an e-mail saying he would not be eligible for the additional credit. The plaintiff sued without pursuing administrative remedy, claiming the e-mail demonstrated that administrative remedy would be futile. The court upheld a district court's dismissal of the claim.
[0161020]
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