From the Insurance Journal, “Allstate Agents Pin Hopes on ERISA Charges Following Dismissal of Age Discrimination Complaint“:
Despite a federal judge throwing out their high-profile class action age discrimination claim against Allstate Insurance Co., lawyers for the 6,400 agents say they are happy with the decision overall because it permits their ERISA (Employee Retirement Income Security Act) claims for breach of contract and breach of fiduciary duty to go forward. In Philadelphia, U.S. District Judge John P. Fullam rejected the group’s age discrimination case against the insurer, deciding it was invalid “for the simple reason that employees of all ages were treated alike”. . . “Overall, we are pleased with Judge Fullam’s decision yesterday,” [Michael Lieder of the Sprenger & Lang law firm] told Insurance Journal. “He ruled on numerous issues. . . He declared voidable the release that the agents were virtually forced to sign, removing Allstate’s primary defense to their claims. While we regret that Judge Fullam dismissed one of the claims, for age discrimination, he allowed the agents to proceed with their claims under ERISA and for breach of contract and breach of fiduciary duty.”
(More on the Allstate case: From Forbes.com, an article here and one from the New York Times here. Access the actual ruling by U.S. District Judge John P. Fullam here at this website.)
From Accounting Web.com, “FASB Issues Proposed Stock Option Rule“:
As expected, the Financial Accounting Standards Board moved yesterday to require employee stock option pay be shown as an expense on company financial statements, beginning next year . . . Despite several bills pending on the issue in Congress, none is likely to derail the FASB’s proposal since it would fall to the Senate Banking Committee to act on the matter. Its chairman, Sen. Richard Shelby (R-AL), has said he would stop any attempt to override FASB’s proposed rule, his spokesman told the Journal.
(You can access the FASB News Release here and the Exposure Draft here.)
An example of how one plan sponsor’s fiduciaries handled the mutual fund investigations–“Hanford turning to Vanguard for 401(k)“:
The committee handling the retirement funds decided not to immediately cut its ties with Putnam Investments when fraud allegations from securities regulators surfaced in November. The committee instead stuck with a process begun in the summer — before mutual fund scandals at Putnam and other fund companies began to make headlines. In July the committee had started to analyze proposals to handle record keeping and fund management services that the mutual fund company Putnam now provides to make sure it was offering employees a competitive investment package. The committee considered value, investment performance and service. But Putnam’s troubles also weighed into the decision, and the committee decided to replace Putnam with the Vanguard Group. . .
From Reuters via MSN Money.com, “Treasury Sec. Urges Care in Fund Reform“:
U.S. Treasury Secretary John Snow on Friday said the Bush administration supports overhaul of the troubled mutual fund industry but also pledged to work with it on possible reforms. “The Administration supports the (Securities and Exchange Commission) taking strong action when harm is done to investors, but believes that care must be taken to preserve the valuable benefits and flexibility that mutual funds provide,” Snow said in prepared remarks to the Financial Services Roundtable, an influential lobby group.
From Morningstar.com, “Sens. Grassley, Baucus Urge SEC To Rethink Late-Trade Rule“:
Two top Senate Finance Committee members urged the Securities and Exchange Commission to back off a proposed rule that would bar mutual-fund trades after 4 p.m. . . Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee said in a letter sent to SEC Chairman William Donaldson Monday that the impact of the rule would disadvantage retirement plan participants. “Under the proposed hard 4 p.m. deadline rule, investors who trade directly with mutual funds or the funds’ primary transfer agents will have a distinct advantage over retirement plan participants, whose trades are typically processed by plan administrators or other third-party intermediaries,” the letter said.
(Regarding mutual fund reform, access the Senators’ letter referred to above here. House members also wrote a similar letter which you can access here. Access testimony last week at a hearing entitled “Review of Current Investigations and Regulatory Actions Regarding the Mutual Fund Industry: Fund Costs and Distribution Practices” before the US Senate Committee on Banking, Housing, and Urban Affairs here.)