DOL Secretary Nominee Backs Down

After multiple delays, the confirmation hearing for President Trump’s Department of Labor (DOL) Secretary nominee, Andrew Puzder, was expected to kick off tomorrow, February 16, before the U.S. Senate, but the nominee has withdrawn himself from consideration.

Puzder is not exactly an unknown figure in Washington, thanks to his role as chief executive of CKE Restaurants, the parent company of the Hardee’s and Carl’s Jr. fast food franchises, a job he has held since September 2000. Adding to insight gleaned from his previous lobbying activities, scores of old interviews and even op-ed pieces penned by Puzder himself have surfaced since President Trump gave him the nod for Labor Secretary, clearly spelling out his rhetorical stances on issues ranging from the minimum wage to sexism and harassment in the workplace. Democrats and liberal groups have expressed concern that he is not the best pic.

For the retirement plan marketplace, it may be interesting to learn that SEC 10-K filings and other forms are available from the company’s ride as a publicly traded entity, offering periodic glimpses into the way its leadership has handled and adjusted compensation and employee benefits, prior to its return to private ownership. It is risky to draw any broad conclusions from individual SEC documents, but there is some informative information throughout the filings about the way the company approaches its own 401(k) plan. For example, there is evidence that the firm now and again suspended its discretionary matching to the plan as business conditions changed.

In a 2012 10-K filing, the firm explained, “we sponsor a contributory 401(k) plan to provide retirement benefits under the provisions of Section 401(k) of the Internal Revenue Code for eligible employees, except certain hourly operations employees and highly compensated employees.”

The filing shows participants could elect to contribute up to 25% of their annual salaries on a pre-tax basis to the 401(k) plan, subject to the maximum contribution allowed by the Internal Revenue Code (IRC). “Our matching contributions are determined at the discretion of our board of directors,” the document shows. “During fiscal 2012, the successor 29 weeks ended January 31, 2011, the predecessor 24 weeks ended July 12, 2010, and fiscal 2010, we did not make matching contributions to the 401(k) plan.”

According to a Form 5500 analysis by BrightScope, owned by the same parent company as PLANSPONSOR, the CKE Restaurants Holdings retirement program scores just 50 out of 100, called out for its “high fees” and “low generosity.” Despite this, in fact the plan actually has an above-average score for the restaurant industry as a whole. In its peer group, other scores include:

• Del Frisco’s Restaurant Group / 55.8
• Apple American Group / 52.4
• Burger King / 50.1
• Urc, LLC / 49.9
• Legal Sea Foods, LLC / 49.8
• Papa Gino’s / 47.7

It should also be observed that proprietary PLANSPONSOR data shows the restaurant industry has the lowest retirement plan participation of the 18 industries tracked.