Compliance November 3, 2008

Court Allows Comcast Company Stock Suit to Move Forward

November 3, 2008 (PLANSPONSOR.com) - The U.S. District Court for the Eastern District of Pennsylvania has moved forward several fiduciary breach claims against Comcast Corporation for its handling of company stock retirement plan investments.
Reported by

The court rejected Comcast’s assertion that a previous ruling in a case against Avaya Inc. extended protection for fiduciaries who decided to offer Comcast stock as an investment option since the plan is an eligible individual account plan (EIAP). In its opinion, the court pointed out that the Avaya plan mandated that company stock be offered as an investment option (See Court Finds Employees Missed ERISA Fiduciary Breach Case ) entitling Avaya fiduciaries to a presumption that it was prudent to offer company stock, whereas the Comcast plan only said company stock “may” be offered to participants.

However, the court dismissed plaintiff Robert Urban’s claim alleging a breach of the fiduciaries’ duty to “provide complete and accurate information,” citing the 3 rd U.S. Circuit Court of Appeals finding in Avaya “[t]hat defendants did not inform Plan participants about several adverse corporate developments prior to Avaya’s earnings announcement, [did] not constitute a breach of their disclosure obligations under ERISA.” (See Bad Corporate News Not Dire Enough to Dump Company Stock )

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Finally, the district court moved forward Urban’s claim that Comcast breached its fiduciary duty to monitor other plan fiduciaries, finding Urban stated a claim upon which relief could be granted.

The case was brought on behalf of all those who were participants in or beneficiaries of the the Comcast Corporation Retirement-Investment Plan at any time between February 1, 2007 and the present. According to the opinion, during this time the plan’s fiduciaries painted a bullish picture for the future of the company to participants and the public even while the company was failing to reach sales goals, top company executives were selling their company stock holdings, and the company’s stock price was falling.

The opinion in Urban v. Comcast Corporation is here .

Compliance October 31, 2008

Employers Oppose Govt. Health Coverage Requirement

October 31, 2008 (PLANSPONSOR.com) - The majority of U.S.-based employers in a recent survey said they want to continue to provide employee health care coverage, but do not want the government to force them to do it.
Reported by

A Buck Consultants news release said employers surveyed preferred a middle ground between the presidential candidates’ health care proposals (see  Political Partings ).

Specifically, according to Buck, a majority of employers responding to the survey preferred a health care system that looks like the one in place, but with:

Get more!  Sign up for PLANSPONSOR newsletters.

  • a private sector safety net for the uninsured,
  • a continuing, and potentially expanded, role for consumer-directed health plans, and
  • a national promotion of health and wellness to control costs.

Most of the survey respondents prefer to continue providing health care coverage; only 32% would rather get out of the business of providing health care to employees. A majority also believe that a federal mandate to provide coverage would put a strain on their competitiveness, according to Buck.

Other key findings include:

  • If a mandate becomes law, two-thirds believe employers should have plan design discretion, including the option to offer consumer-directed health plans.
  • Twenty-one percent of respondents believe that one candidate's proposal to expand coverage by enhancing competition between employer plans and individual insurance policies would reduce the number of uninsured.
  • Seventy-two percent believe enhanced competition would drive healthy employees into the individual market, leaving more costly individuals in the employer plans.
  • Fifty-three percent of respondents would be inclined to promote health and wellness in the workplace if they are not the primary source of health insurance.

The survey report is available from Buck's Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533, 1-800-887-0509. It also can be ordered online at  www.bucksurveys.com .

The survey analyzed responses from more than 160 organizations, according to Buck.

«