Compliance August 21, 2007

9th Circuit Rules for Female Workers in AT&T Pension Benefits Dispute

August 21, 2007 (PLANSPONSOR.com) - A federal appellate court ruling about pension service credits awarded to women who had taken maternity leaves from AT&T Corp. could lead to boosted benefits for as many as 20,000 women.
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That was the outcome of a decision by the 9 th U.S. Circuit Court of Appeals, which ruled that the communications giant must credit women retirees with work time they lost during maternity leaves taken before the federal Pregnancy Discrimination Act was enacted 30 years ago, according to a Los Angeles Times news report.

The ruling affects women who took maternity leave between 1968 and 1976; a plaintiffs’ attorney told the Times that up to 20,000 women could be affected. 

With all 15 judges in the San Francisco-based court hearing the case, the appellate panel split 11-4 to back claims by four longtime employees and the federal Equal Employment Opportunity Commission (EEOC). Plaintiffs alleged the company’s pregnancy policies violated the women’s rights and dampened the amount of pension benefits they got.

According to the news report, the latest 9 th Circuit decision reinstates a holding by U.S. District Judge Martin Jenkins of the U.S. District Court for the Northern District of California that the company’s exclusion of pregnancy leave when calculating pension benefits violated federal law.

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The Jenkins decision was thrown out by a 9 th Circuit three-judge panel last year, but the full court then voted to rehear the case with the larger panel – a move typically reserved for matters deemed to be of unusual legal significance.

The news report said the latest appellate ruling illustrated a sharp ideological divide on the court with all 11 judges who favored the plaintiffs appointed by Democratic presidents while the four judges voting for the company were selected by Republican presidents.

AT&T spokesman Walt Sharp said, according to the newspaper, “We believe the decision is inconsistent with current law and we are reviewing the decision to determine our next steps.”


The appellate court’s latest decision is  here .

Benefits August 20, 2007

Employees Report Stress over Financial Benefit Decisions

August 20, 2007 (PLANSPONSOR.com) - Ameriprise Financial's most recent research, The 2007 Ameriprise Workplace Financial Planning Benefit Decisions study, recorded increased stress among U.S. workers in every category measured, with the highest stress factors saving for retirement and paying for health care in retirement.
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A significant problem is that workers seem unable to come up with strategies for facing rising out-of-pocket health care costs while maintaining their level of retirement saving. According to an Ameriprise press release, the study found that while 61% of respondents said reducing discretionary spending was a method used for dealing with rising benefit costs, almost half (46%) said they would decrease overall saving and investing.

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More than 40% of workers reported an impact on their financial health and stress levels related to increases in their health care insurance costs and 44% said increasing benefit costs will impact their ability to fund retirement and other financial goals.

According to the study, less than one in five workers have a written, professionally prepared and paid-for financial plan, and those without a financial plan are more likely to cut back on their saving and investments in company-sponsored plans when confronted with increases in out-of-pocket benefit expenses. Of those employees facing one or more benefit cost increases, 54% of those without a financial plan said they would reduce their retirement savings level, compared with 46% of those with a financial plan, the release said.

Ameriprise found the employees surveyed would like their employer to provide financial planning assistance. Eighty-nine percent of respondents said a financial plan that directly addressed their workplace benefit costs and contingent financial decisions would be helpful, and 70% would be moderately or very interested in one-on-one financial planning if offered through their employer.

In addition, 87% of survey respondents expressed they believe a financial planning benefit would make them feel their employer recognizes and values their effort in the workplace.

For the research, a telephone study among 617 consumers was completed. Respondents included those with access to employer sponsored health insurance and enrollment in (or eligibility for a 401(k) plan.

A survey report is at http://www.plansponsor.com/uploadfiles/Ameriprisestudy2007.pdf .

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