Companies Try To Avoid PBGC Involvement

July 12, 2001 (PLANSPONSOR.com) - In a bid to avoid government interference, or scrutiny from the Pension Benefit Guaranty Corporation (PBGC), companies buying out portions of other companies, are opting to leave acquired businesses? ailing defined benefits plans behind, according to consultant William M. Mercer.

Corporate decision makers are concerned that PBGC, which has insured the nation’s private pension system since 1974, will force the sellers to make up the difference between the plan’s liabilities and its assets, according to New York consultant Dan Rudin, of William Mercer’s merger and acquisition practice.

Those driving merger and acquisition activity prefer to play it safe, leaving the potentially lucrative plan on the table and the responsibility of pension payments with the seller.

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The PBGC insures the pensions of over 40 million participants, stepping in when employer sponsored defined benefit plans run into trouble, often becoming the plan sponsor for failed plans. Although there are limits to what the organization can legally pay, most people are paid what they would have received had the plan not failed.

The group contacts companies considering mergers or acquisitions, paying particular attention to those that:

  • junk bond status on their corporate bonds
  • pension plan liabilities of over $25 million, and
  • under-funding of $5 million

The PBGC will request an actuarial estimate of the plan?s liabilities from companies, which meet one of the above criteria and have over 5,000 participants.

Read more at http://www.plansponsor.com/content/magazine/pbgc

2002 Tech Salaries Flatten Out

December 6, 2001(PLANSPONSOR.com) - The record-low unemployment figures and competition for workers, which led to sharp salary increased for information technology (IT) professionals during the tech boom, are a thing of the past, the new RHI Consulting Salary Guide reveals.

Base compensation for information technology professionals will remain virtually unchanged in 2002. At the same time, starting salaries are projected to increase by an average of 0.1% in 2002, compared to the 8.4% increase forecast this time last year.

Money Talk

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According to the guide, network security professionals will see the greatest starting salary increases of any job category, for the second year in a row, with base compensation expected to rise by 3.4% in 2002.

In terms of job title, Applications architects can expect the largest rise in base compensation – an increase of 6.7% in average starting salary compared to 2001, while starting salaries for consulting and systems integration directors should rise an average of 6.1%, according to research from RHI Consulting.

Show Me the Money

Other notable increases in starting salaries from 2001, according to the guide, include:

  • a 4.8% increase for database managers, bringing their base compensation to between $83,000 and $114,000,
  • a 4.7% rise for software engineers, their starting salaries moving to between $65,000 and $97,000,
  • disaster recovery specialists will see starting salaries increase 3.1% to between $57,000 and $86,000,
  • base compensation for senior help desk specialists will increase by 4.9%, with starting salaries in the range of  $57,000 and $45,000,
  • systems administrators will earn average starting salaries between $51,000 and $72,500 annually, a gain of 2.1% over 2001

Sector Watch

Industries forecasting particularly strong demand for IT professionals in 2002 include:

· health care,
· financial services, and
· real estate

Information in the Salary Guide is derived from thousands of job searches, negotiations and placements conducted each year by RHI Consulting recruiting specialists.

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