Finance/Taxes
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Law Firm Ordered to Restore Retirement, Pension Plan Assets
Eichholz Law Firm P.C. and former Managing Partner Benjamin Eichholz breached their fiduciary responsibilities under the Employee Retirement Income Security Act by improperly transferring and lending plan assets to prohibited recipients.
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NHL Players Score New Pension Plan
The defined contribution plans, created during the last league lockout in 2005, will be restructured into voluntary contribution plans and neither plan will be terminated.
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Employers Hungry for Returns When Updating 401(k) Menus
Plan sponsors see big bounce in performance after adding new funds but it doesn't last.
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Higher Financial Penalties Proposed for Uninsured Massachusetts Residents
In 2012, the maximum penalty for non-compliance was $105 a month, or $1,260 a year. The maximum penalty this year for those with incomes that exceed 300 percent of the federal poverty level will be $106 for each month that an individual is not covered by health insurance, or $1,272 a year.
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No-Strings-Attached Roth 401(k) Conversion Is Good Deal—for Select Few
Until now, to make such a distribution without incurring a 10 percent penalty, workers must either have been retiring, terminating their job with their employer or turning 59½.
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IRS Rules Ease Compliance With Health Reform Law Employer Mandate
The massive $2,000-per-full-time-employee penalty will not apply so long as employers offer coverage to at least 95 percent of their full-time employees and their dependents up to age 26, the IRS said.
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Tax Bill Will Reduce 401(k) Taxes, Ease Fund Transfers
A provision tucked into the American Taxpayer Relief Act will expand the opportunities for employees to transfer funds from traditional 401(k) plans to Roth 401(k)s. Employees who are in lower tax brackets now compared with when they retire will reap big tax savings from such transfers.
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Changes in Tax Rules Could Cut 401(k) Plan Sponsorship: Survey
Almost half of employers, 46 percent, said they would consider dropping their plans under the 28 percent tax credit scenario, while one-third would do so in the event of a limited tax exclusion or under the 20-20 proposal.
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Clients Kind of Blue Over IBM's 401(k) Surprise
Starting next year, Big Blue's match will be contributed as a lump sum on Dec. 31.
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American Pilots Accept Contract With Pension Freeze Provision
The pilots' approval clears the way for parent company AMR Corp., Fort Worth, Texas, to continue its Chapter 11 bankruptcy proceedings. The pension proposal is contingent on the resolution of the bankruptcy proceedings.
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Year-End Pension Funding Gaps Could be Largest on Record: Mercer
The aggregate funding deficit in pension plans sponsored by S&P 1500 employers narrowed to $607 billion in November, down $12 billion from the $619 billion deficit recorded in October.
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Fiscal Cliff Talks Target Retirement Plans
Retirement plans are in congressional crosshairs for one basic reason: the tax-deductible contributions made to the plans cost the government tens of billions of dollars a year in reduced tax revenues.
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HHS Details Fees to Be Paid, Provides Guidance for Transitional Reinsurance Program
Much of the $25 billion in assessments—to be paid annually over a three-year period—will be used to partially reimburse commercial insurers writing policies for individuals with high health care costs.
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401(k) Plan Balances Hit Record High for 2012: Fidelity
For the three-month period ending Sept. 30, employees' average account balances jumped 4.2 percent from the prior quarter, and 18 percent compared with the end of the third quarter of 2011 when account balances averaged $64,300, according to Fidelity Investments.
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Monster Plans Restructuring, China Sale
Monster announced the restructuring Nov. 8 as it also reported third-quarter results with third-quarter revenue of $221.7 million, down 10.8 from $248.6 million in the same quarter last year.
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Mercer Analysis Explores Funded Status of Pension Plans in Several Countries
In the United States, plans sponsored by employers in the S&P 1500 were on average 73 percent funded as of Sept. 30, down from 75 percent as of Dec. 31, while funding for plans sponsored by Canadian employers in the S&P/TSX fell to 83 percent, down from 87 percent as of the end of 2011.
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401(k) Plan Contribution, Other Retirement Plan Limits Upped for 2013
The maximum contribution that can be made to 401(k) plans will increase next year, as will the maximum benefit that can be funded through defined benefit plans, the Internal Revenue Service announced Oct. 18.
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California Workers' Compensation Reforms Will Cut Costs by $300M Annually: Fitch
S.B. 863 was signed into law Sept. 18 and takes effect Jan. 1. It is expected to boost permanent disability benefits for injured workers while implementing several measures to help reduce comp costs for insurers and employers.
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Middle-Income Americans Wing It on Financial Decisions
About 67 percent of people with household annual income between $30,000 and $100,000 have made at least one 'really bad financial decision.' Those stumbles cost families an average $23,000.
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California Workers' Comp Reform Measure Signed Into Law
California Gov. Edmund G. Brown Jr. signed workers' compensation reform legislation into law Sept. 18, saying the law will reverse a four-year trend of rate increases.
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Temp Bill Rates May Be Back on Rise
The IQNdex's August reading of 105.9 is up 0.7 percent from July and up 1.2 percent from three months ago. The increases compare to the entire 12 months ended in May when the IQNdex rose by less than 1 percent.
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Group Health Insurance Premiums See Moderate Increase in 2012: Survey
The survey of more than 2,000 employers found that the premium for family coverage rose an average of 4 percent, increasing to $15,745 this year.
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Single Fiduciary Standard From SEC, DOL Would Create Multiple Problems, Says Consultancy
The financial industry and members of both parties of Congress have urged the agencies to combine their efforts and “harmonize” the controversial rule making in order to produce consistent guidance for investment firms.
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Papa John's CEO Says Health Care Reform Law Will Increase Price of Pizza
In its most recent annual report, Papa John's International Inc. warned of higher costs due to the health care reform law.
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Senate Panel Approves Bill to Increase Mass Transit Contribution Tax Break
The provision is included in a broader bill, the Family and Business Tax Cut Certainty Act, approved Aug. 2 by the Senate panel on a 19-5 vote.
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SEC Names Insider Trading Suspect in Staffing Firm Deal
Ladislav 'Larry' Schvacho made approximately $511,000 in illicit profits using insider information, the Securities and Exchange Commission reported.
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Lawmakers Drop Provision to Boost Mass Transit Tax Break
Since Jan. 1, the maximum contribution limit has been $125 a month.
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Employers Urge Congress to Pass Pension Funding Relief Legislation
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Home Depot Renovates 401(k) Plans to Add Value, Cut Costs
The plans offer a core lineup of 12 options, in addition to the target-date series and a self-directed brokerage window to accommodate participants who want greater access to mutual funds, exchange-traded funds and stocks.
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Insurance Firm CEO Turns Down Year-End Bonus
Hartford's Liam McGee had come under fire this year from the president of hedge fund manager Paulson & Co. and Hartford's largest single stockholder, who urged Hartford to break up the company in order to boost shareholder value.
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Military Veterans Finding a Niche Among Auto Dealers
Not only can dealers get one-time tax credits ranging from $2,400 to $9,600 for hiring veterans, but recruiters and dealers say many veterans have attributes that make them strong job candidates.
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Racial Disparities in 401(k) Accounts Found: Aon
Among the employees who reported pulling money out of their retirement savings, two-thirds indicated they needed the cash for an emergency, debt or day-to-day living expenses.
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Dropping Health Care Coverage No Easy Decision for Employers
Because employer and employee health care benefit contributions are made on a pretax basis, it wil cost employers considerably more than the $2,000-per-employee fee for dropping coverage, if the law survives legal challenges being heard by the Supreme Court.
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Survey: Health Care Reform Splits Employers
Forty percent of employers want the high court, which is hearing oral arguments this week on the constitutionality of the Patient Protection and Affordable Care Act, to strike down the 2010 law. Still, employers are far from being united in favor of repealing it.
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For 401(k) Advisers, Time to Shelve Old Retirement Dogmas
Plan participation, investment options are not always true measures of a plan's performance.
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SEC: Financial Advisers Traded on Info Gleaned From AA Meeting
The pair allegedly learned about an upcoming insurance company merger during an Alcoholics Anonymous meeting, where shares rose 64 percent.
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Fortune 1000 Firms' Pension Plan Funding Falls to 78% in 2011
The aggregate funding level of 422 pension plans offered by Fortune 1000 companies fell to 78 percent in 2011, down from 84 percent in 2010 and 81 percent in 2009, according to Towers Watson & Co. analysis.
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Bill Proposed to Make Employer-Paid Education Aid Tax Break Permanent
Under Section 127 of the Internal Revenue Code, employers can reimburse employees for up to $5,250 in annual undergraduate and graduate costs without the reimbursement being included in employees' taxable income.
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Prospects for Boost in Employee Mass Transit Tax Breaks Dim
The history of the higher mass transit tax break goes back to 2009, when lawmakers approved an economic stimulus measure that allowed employees to reduce their taxable salaries by up to $230 a month to pay for mass transit expenses.
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Workers' Comp Assessments 5 Times Higher for N.Y. State Employers: Analysis
The average premium assessment among 32 states that impose the taxes is 4.2 percent. In contrast, New York state employers pay assessments totaling 20.2 percent of their premiums.
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PBGC Updates Estimate of Funding Relief for American Airlines
According to the Pension Benefit Guaranty Corp., American Airlines received specific funding relief in the Pension Protection Act of 2006 and an Iraq War spending bill in 2007 that allowed airlines to spread their unfunded liability in 2008 over 10 years instead of seven.
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Aon Revenue Surges to $11.29B Largely on Hewitt Purchase
Revenue for its human resources solution unit increased 113 percent to $4.5 billion.
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Treasury's Lifetime-Income Proposals Lean Heavily on Education
Observers find proposals to be well intended, but add that workers have a lot to learn on annuities.
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American Airlines Wants to Terminate Pension Plans
The termination, if approved, would shift billions of dollars of promised but unfunded benefits to the Pension Benefit Guaranty Corp., resulting in the biggest loss ever for the agency.
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Employers Adding Automatic Enrollment to DC Plans: Aon Hewitt
Under automatic enrollment, employees who don't respond to participation notices are enrolled automatically in a plan unless they notify their employers that they want to opt out.
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Raytheon, Lockheed Martin to Add Billions to Pension Plans
Raytheon Co. expects to contribute a combined $4.2 billion to its pension plans over the next three years, while Lockheed Martin Corp. foresees a $1.1 billion contribution to its pension trust, according to fourth-quarter earnings statements from both firms.
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Novartis Agrees to $99M Settlement in Sales Rep Wage Dispute
The $99 million settlement resolves the wage-and-hour claims brought in 2006, as well as additional wage-and-hour claims covering a more recent time period, according to the joint announcement by Novartis and Sanford Wittels.
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Court: Ex-Temp Creates Fake W-2s
The former temporary worker, Valerie Yvonne Brown, faces charges of aiding or assisting the preparation of a false or fraudulent document and identity theft, according to the filing.
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Worker Optimism About Retirement Security Grows: Towers Watson
One factor boosting employees' confidence level is the growth in many employees' 401(k) account balances, according to the study.
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Aon Moving Its Headquarters to London
Aon President and CEO Greg Case said the move, which must be approved by shareholders, is another step in the firm's strategic plan to grow Aon as a global platform. In particular, London will help Aon grow its business in emerging markets, he said.
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Top 5 Workplace Injury Causes Make Up 72 Percent of Direct Workers' Comp Costs: Analysis
Overexertion—or injuries caused by lifting, pushing, pulling, holding and carrying—costs businesses $12.5 billon in direct annual expenses and accounts for more than 25 percent of the national burden, according to Liberty Mutual's Workplace Safety Index.
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U.S. Health Care Spending Totaled Nearly $2.6 Trillion in 2010
In 2010, total U.S. health care spending hit $2.593 trillion, or $8,402 per person. While a record, expenditures rose only 3.9 percent in 2010, up slightly from a 3.8 percent increase in 2009, according to statistics compiled by researchers at the Centers for Medicare & Medicaid Services.
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Will Labor Department's Request Slow Fiduciary Proposal?
In its latest timetable for implementing the Dodd-Frank financial reform law, the commission put fiduciary duty on the list of rules labeled 'dates still to be determined.' Many other rules are designated for release during specific time periods.
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Funded Status of Pension Plans Falls for Second Year: Mercer
In the aggregate, the plans' funding deficit hit $484 billion as of Dec. 31, 2011, up from $315 billion a year earlier and $229 billion as of Dec. 31, 2009.
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Several States' Residents Show Their Financial Savvy
The Employee Benefit Research Institute did a state-by-state analysis to see whether it was possible to pinpoint financially savvy states and ranked them in two categories: financial literacy and financial behavior.
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Empire Blue Cross Changes Course on Health Plans
The decision is being greeted with relief by brokers and small businesses. An estimated 20,000 companies, covering as many as 250,000 workers and their family members, use the plans being discontinued by Empire.
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Affluent Anxious About Retirement Too, Wells Fargo Finds
Four in 10 of those surveyed said that their biggest fear about retirement is that they 'will do all the right things and it still won't be enough for tomorrow.'
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U.S. Agency Accuses Cargill of Discrimination, Seeks to Halt $60M in Contracts
The OFCCP said it has been unable to secure a fair resolution from Cargill to pay back wages and interest to the rejected job applicants and to extend job offers to at least 167of the affected workers.
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PBGC Boosts Maximum Benefit in 2012 to Nearly $56,000
Changes in the maximum benefit guarantee, which will increase 3.4 percent next year, are linked to wage inflation.
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Mercer: Group Health Care Costs Climb 6.1 Percent as Cost per Employee Tops $10K
Amid steadily rising costs, employers, especially larger organizations, continue to take action to try to hold down cost increases to more manageable levels, according to the Mercer survey.
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PBGC Deficit Hits Record $26 Billion
As was the case in the prior fiscal year, the Pension Benefit Guaranty Fund did not incur any multibillion-dollar losses in fiscal 2011.
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Target-Date Funds Grow in Popularity as Retirement Tool
Nearly 96 percent of participants enrolled in target-date funds in 2007 were still using them in 2009. And because more target-date fund products are in the marketplace, expenses are dropping. Despite their popularity and lower prices, target-date funds have their critics.
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Fact Box: What's a Target-Date Fund?
Target-date funds employ a mix of stocks and bonds that are put on a set glide path.
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Many 401(k) Participants Would be Hit Hard by Proposed Tax Changes: EBRI Study
Worker and employer contributions to a 401(k) plan are capped at $49,000 or 100 percent of a worker's pay, whichever is lower, under the current federal tax code.
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Pension Funding Levels Improve, but Still Well Below 2011 Peak: Mercer
The consultancy attributed the funding improvement to an 11 percent gain in equity values in October, partially offset by a decrease in corporate bond yields.
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Hybrid Pension Plan on the Drawing Board in California
The proposal would create a pension plan with elements of defined benefit and defined contribution plans and would also raise the retirement age for new state and local government employees to 67.
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DC, DB Plans Hurt by Rising Health Care Costs
Aside from health care benefits, the only corporate benefits budget item that grew between 2009 and 2011 was corporate 401(k) plans, which increased two percentage points to 15 percent in the latest survey.
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Analysis Shows Most Employers Restore 401(k) Match
The suspensions occurred from January 2008 through January 2010, though most occurred during the first half of 2009, which was the peak of the Great Recession, according to research by Towers Watson.
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Health Care Cost Hikes Increasing, Expected to Continue
The key difference between the Kaiser Family Foundation and Aon Hewitt surveys is that the KFF survey included more fully insured plans, 40 percent, and more small and midsize firms, 85 percent, with fewer than 5,000 workers.
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New Group to Go to Bat for Retirement Plan Advisers
Among other things, the National Association of Plan Advisors plans to fight to keep tax breaks for retirement savings.
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Principal Financial Group's 10 Best Companies for Employee Financial Security—2011
These companies have shown that a commitment to outstanding benefits can be a factor in having a successful business.
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Investing in Employees
Despite a tough, volatile economy, 10 small to midsize companies have been able to run successful businesses while bringing stability to employees through strong benefits programs.
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Buffalo Not-for-Profit Violated Workers Rights in Facebook-Related Firings
A judge rules that the employees’ Facebook discussion was protected concerted activity within the meaning of Section 7 of the National Labor Relations Act.
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Shellshocked Gen Y Crossing Off Stocks as Investments
Their principal concern is protecting what they have now, seemingly taking a page from their grandparents' book on saving for retirement.
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Health Plan Administrator Seeks to Exempt HRAs from Health Reform Law Research Fees
That fee—to be used to fund research on medical outcomes as part of the federal health care reform law—will be $1 per plan participant for the first plan year ending after Sept. 30, 2012, and $2 per participant in succeeding years.
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House Panels to Consider Repeal of Grandfather Rules for Health Care Plans
To win grandfathered status, a health care plan, among other things, can’t ever increase coinsurance requirements or boost the percentage of the premium paid by enrollees by more than 5 percentage points.
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Poor Economy Has Little Effect on Disability, Workers' Comp Benefits Programs
Researchers for the San Francisco-based IBI said the survey’s results, released this week, undermined what previously would have been considered reasonable assumptions of the recession’s effects on employers’ claims experience.
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Bariatric Surgery Yields Economic Payoff
While the health results for bariatric surgery and the dramatic weight loss that usually follows is clear, a doctor and his colleagues have found that there is a societal economic benefit as well: many previously unemployed patients get jobs after they lose weight.
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401(k)s Hang on as Stock Market Ride Gets Rough
Financial advisers and executives at retirement plan providers said that employees, while tending toward caution, do not appear to be panicked. During the wild swings a few weeks ago, participants largely sought information.
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Court Rejects Liberty Mutuals Appeal of AIG Workers' Comp Settlement
The case stems from allegations made in 2006 by then-New York Attorney General Eliot Spitzer that AIG had underreported workers’ compensation premiums to avoid paying its fair share of residual market assessments.
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OSHA Orders Burlington Northern to Pay Whistle-Blower $300,000
The agency said railroad managers followed the employee to the hospital and received an injury report, but later accused the worker of failing to furnish adequate information about the injury.
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Nissans Return-to-Work Offer Inadequate in Comp Case
A trial court may award up to six times the employee’s medical impairment rating in additional permanent partial disability benefits if that worker does not receive a ‘meaningful return to work’ offer and as long as the worker does not voluntarily resign or retire.
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California Supreme Court Rules on Workers' Compensation COLA Case
The case involved an unnamed accountant/controller injured in 2004 who was eligible to receive $728 weekly for life.
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COBRA Program Subsidies to Expire at End of August
The exact number of individuals who took the subsidy isn’t known. At the time the original subsidy legislation was passed, congressional analysts estimated that the subsidy would aid more than 7 million laid-off employees and their families and cost the government about $25 billion.
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Appeals Court Rules for Employer in Undocumented Worker Case
The case of Vicente Salas v. Sierra Chemical Co. involves a seasonal production-line worker who used a counterfeit Social Security card with another person’s Social Security number to obtain work from Sierra intermittently over three years.
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Rabbis Demand Back Pay for Cheese Workers
A Michael Moore-style demand for a meeting with executives is rejected as an Orthodox social-justice organization seeks unpaid overtime for employees of a kosher cheese-maker.
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Most Companies Moderately Concerned About Comparing Pay, Performance
The SEC plans to propose and finalize implementation rules for the Dodd-Frank act's provision on executive pay and corporate performance sometime between August and December, although there is no indication they would take effect for the 2012 proxy season.
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Firefighters Reverse Discrimination Lawsuit Finally Settled
Of the 17 plaintiffs in the case—Frank Ricci et al. v. John DeStefano et al.—16 were Caucasian and one was Hispanic.
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NFL Players Deal Will Allow Workers' Compensation Claims in Other States
On July 23, an email by player representative and New Orleans Saints quarterback Drew Brees outlined three primary issues the players association still was grappling with, including workers’ compensation.
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Chrysler wont hike exec pay indiscriminately as U.S. caps end, CEO says
The Detroit automaker was restricted from paying executives more than $500,000 as part of a 2009 rescue package financed by the U.S. Department of Treasury’s Troubled Asset Relief fund. General Motors remains under similar restrictions as part of its government rescue.
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Injured Employee Adequately Notified Employer, Due Workers' Comp
Pennsylvania’s high court said that although the notice to the employer was not ‘letter perfect,’ state workers’ comp law directs that ‘a meritorious claim ought not, if possible, be defeated for technical reasons.’
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Express Scripts to Buy Medco Health Solutions in $29.1 Billion Deal
In its note to investors regarding the sale, Chicago-based Morningstar Inc. said its analysts were ‘floored’ by news of the proposed deal. The note characterized the deal as having a ‘less than 50 percent chance’ of receiving FTC approval.
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Staffing Firm Randstad Announces Plan to Buy SFN Group
Based on 2010 revenue of both firms, the deal would make Randstad the second-largest information technology staffing provider in the U.S. It could also become the second-largest provider of office clerical staffing.
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Survey: Boomers Not Interested in Traditional Retirement
Fully 65 percent of those polled said they would ideally prefer to have some work during retirement. The statement particularly resonated among younger participants between 55 and 64, 77 percent of whom agreed that they would like to work in retirement.
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HHS, Labor Survey to Ask Employers About Wellness Programs
As part of the survey, 3,000 employers will be contacted to assess the prevalence and types of corporate wellness programs, as well as the use of employee incentives.
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Wisconsin to Review Health Savings Accounts for State Employees
State lawmakers approved legislation that revised the state’s tax law to follow the 2003 federal law that established HSAs and excludes HSA contributions from employees’ taxable income.
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Third-Party Carriers to Employee Benefits Plans Can Be Sued Under ERISA
The 9th U.S. Circuit Court of Appeals circuit court June 23 decided that retirement-plan participants can sue third-party insurers under the Employee Retirement Income Security Act of 1974.
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CMS Says More Than Half of Early Retiree Health Reimbursement Fund Paid Out
As of May 27—the latest date reimbursement information for the Early Retiree Reinsurance Program is available—just over $2.7 billion had been paid out, up from $2.4 billion as of May 3, and $1.7 billion as of March 17.
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McKinsey Issues Statement on Controversial Health Reform Survey Results
In the statement released June 20, the consulting firm said the 1,300 respondents ranged in size from organizations with less than 20 employees to those with more than 10,000 employees.
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Report: Working Women 'Markedly Less Confident' About Retirement than Men
Uncertainty among women stems largely from a lack of knowledge about financial products and services, resulting in investments that may be too conservative to outpace inflation.
