Benefits July 27, 2005

First Mutual Settles Sexual Harassment Case

July 27, 2005 (PLANSPONSOR.com) - First Mutual Corp. agreed to a settlement of a lawsuit claiming a male former employee was sexually harassed by a female coworker.
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Newsday reports that the Equal Employment Opportunity Commission (EEOC) filed the lawsuit against First Mutual Corp. for civil rights violations when it ignored complaints of sexual harassment from Louis Oblea Jr., a loan officer.

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The lawsuit claims a female co-worker subjected Oblea to offensive, inappropriate touching, sexual comments and obscene e-mails starting in December 2003. The EEOC claims Oblea was fired in retaliation in January 2004.

The company admitted no wrongdoing in the settlement. They agreed to pay Oblea $25,000, distribute clear policies against discrimination and retaliation to all employees, and establish a complaint procedure, according to the Newsday report.

Compliance July 26, 2005

Pension Bill Gets by US Senate Finance Panel

July 26, 2005 (PLANSPONSOR.com) - The US Senate Finance Committee has approved a pension reform proposal requiring companies to fully fund their defined benefit pension plans and giving airlines 14 years to pay off their pension obligations.
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The legislation now goes to the full Senate for a vote. The Senate Committee on Health, Education, Labor and Pensions has also held hearings and is working on a parallel pension measure, and a similar pension proposal is under consideration by the House Ways and Means Committee, Bloomberg reported.

“The fragile state of our nation’s pension plans has caught the attention of Americans everywhere,” said US Senator Charles Grassley (R-Iowa), Finance Committee chairman. The Congressional Budget Office estimates that companies underfunded their pensions last year by as much as $600 billion.

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An amendment added to the legislation Tuesday gives airlines 14 years to pay overdue pension obligations. Delta Air Lines Inc. and Northwest Airlines Corp., the third-and fourth-largest US carriers had asked for 25 years (See  Senate Pension Reforms Won’t Give Airlines Enough Time ). The rest of the 29,651 companies that offer defined-benefit pensions would have seven years to catch up on any backlog, according to the news report.

Also added to the measure Tuesday is a plan that would allow companies to offer cash-balance plans as long as they don’t discriminate against older employees. The 1,700 cash-balance plans already in existence have been in legal limbo since a 2003 federal court ruling that deemed International Business Machine Corp.’s plan illegal because benefits for younger workers exceeded those of older workers for the same employment period (See  IBM Strikes a Deal on Cash Balance Suit ).

The House version of the legislation, which is before the Ways and Means Committee, eliminates the use of credit balances for companies that are less than 80 percent funded.

The Senate measure approved Tuesday, the National Employee Savings and Trust Equity Guarantee Act, (NESTEG), would require companies to fully fund their plans or face increased penalties (See  Senate Bill Takes On Private Pension Pickle  ). The bill would also increase premiums that companies pay to the PBGC for insurance to $30 per plan participant per year from $17.

More information about the US House Republican pension plan is  here .

More information about the Bush Administration’s pension proposal is  here .

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