Employers Steer away from Layoffs

February 20, 2002 (PLANSPONSOR.com) - In response to the weak economic environment, more than half of employers responding to a survey said they would take measures other than axing jobs to save money.

According to the survey by the Center for Survey Research and Analysis at the University of Connecticut and Rutgers University, in terms of cost control measures,

  • keeping employees to 40 hours per week was first on the list for 44%,
  • freezing salaries was cited by 6%, and
  • cutting their own salaries was the answer for 4%

Perhaps in keeping with their assessment of layoffs for cost containment, almost half of those responding, or 46%, said they had trouble finding the best workers and almost 30% said they anticipated the same problem in 2002.

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Layoffs an Option

While many in the survey opted for something other than separating workers to save money, almost 40% listed layoffs as their leading cost-cutting strategy, the survey found.

But there was a disagreement about who should pay to retrain the at-risk workers so they might find other jobs. Only 14% of employers said they should have to pick up the training costs.

In a separate survey of workers, however:

  • some 37% of the sample said that the individual who receives the training should pay,
  • just over a quarter said the government should foot the bill, and
  • some 17% said it should be employers’ responsibility

The employer survey covered 501 businesses in December, 2001.

Blackouts Last Weeks to Several Months

February 19, 2002 (PLANSPONSOR.com) - Transaction blackouts in participant-directed retirement plans have lasted between three and four weeks on average and can go as long as two months or longer.

That was one of the results from a survey by The American Society of Pension Actuaries (ASPA) of 250 firms responsible for administering over 85,000 plans.

The ASPA survey also found:

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  • that companies typically provide a 30-day advance notice of a pending blackout
  • lockouts are infrequent – they generally occur once every three or four years

ASPA researchers said blackout periods are particularly hard for plans sponsored by small businesses because they generally lack the technology necessary to make the process of transferring plan records and assets go more quickly. 

Three quarters of these plans are maintained by small businesses, the survey found.

ASPA plans to use the data to help form a lobbying position for the ongoing Congressional debate over retirement plan limits in the wake of Enron’s collapse.

Enron employees have charged in a flurry of lawsuits that a transaction blackout kept them from selling company stock while its share value was plummeting.

Read more at A Change in Plans: The Enron Conversion

Read more at Enron Emails Shed Light on Blackout

Read more at Congress Proposes Limits on Employer Stock, Blackouts

Read more at Recordkeepers: Blackouts Can be Shorter

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