Benefits January 13, 2006

Firing Employees a Harrowing Experience

January 13, 2006 (PLANSPONSOR.com) - About 40% of senior manager respondents to a recent survey said they felt their health and family life had suffered as a result of having to fire someone.
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A news report on Monster’s management-issues Web site said that one in eight respondents said they had experienced stress that affected their work from having to fire employees.

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The UK study by Alexander Hughes Interim Management (AHIM) found that more than 60% of senior managers have had to fire staff in the past two years without having been trained on how to do it.More than a third of the respondents questioned felt stressed and worried as a result of the downsizing/change management programs they have had to undertake, with more than 44% having received no prior training, according to the news report.

Thirty-seven percent of respondents enjoyed their job less as a result of the firing program, and 12% said they believed the process has affected their ability to do their job properly.

Even anticipating having to fire someone can cause a great deal of stress. Seventy-one percent of senior managers and directors who have not yet participated in any downsizing programs but expect to do so within the next year say they would be upset if they had to take the lead in firing employees.

Gavan Burden, managing director at AHIM, advises hiring outsiders to do the dirty work as they will not have as much ’emotional baggage’ when firing employees.

Compliance January 12, 2006

PBGC Extends Use of the PFEA 85% Corporate Rate

January 12, 2006 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) has issued Technical Update 06-1 which waives reporting by certain employers of financial and actuarial information under section 4010 of the Employee Retirement Income Security Act (ERISA).
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According to the update, ERISA section 4010 generally requires controlled groups to report to the PBGC if the aggregate unfunded vested benefits in plans maintained by the controlled group exceed $50 million (“the 4010 Gateway Test”).

For purposes of determining vested benefits for the 4010 Gateway Test for plan years ending before December 31, 2005, the Pension Funding Equity Act of 2004 (PFEA) set the PBGC’s variable rate premium interest rate for plan years beginning in 2004 or 2005 at 85% of the annual rate of interest determined by the Secretary of the Treasury on amounts invested conservatively in long?term investment grade corporate bonds (PFEA 85% Corporate Rate) for the calendar month preceding the calendar month in which the plan year begins.   According to the update, the PFEA 85% Corporate Rate no longer applies for plan years beginning on or after December 31, 2005.

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However, since pending legislation in the US House and Senate would extend the use of the PFEA 85% Corporate Rate for another year, the PBGC’s notice extends the rate’s use for another year.

Reporting of financial and actuarial information is waived for information years ending on or after December 31, 2005, and on or before June 30, 2006, provided no filing would be required if, for purposes of the 4010 Gateway Test, the PFEA 85% Corporate Rate is used for valuing vested benefits for plan years ending on or after December 31, 2005.

The update is  here .

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