Investing April 24, 2003

FRC: Funds Net $11.8 Billion March Inflow

April 24, 2003 (PLANSPONSOR.com) - Mutual funds continued to pick up assets in March, recording net inflows of $11.8 billion for the month.
Reported by

Corporate bond funds again led the way by taking in $7.6 billion and an additional $2.8 billion intake was accumulated in government bond funds, both totals lower than the $8.2 billion and $6.1 billion, respectively, that flowed into the categories in February (See  Funds Net February Inflow ).   Other inflows were also recorded in domestic equity funds and tax-free bond funds, amassing $2.1 billion and $14 million respectively in March, according to a Financial Research Corporate (FRC) report.

Conversely, international/global bonds funds could not hold on to the positive inflows recorded in February, turning in a net outflow of $716 million.  Year-to-date, domestic equities are still the only category in the red, with a net outflow of $3 billion.  Comparatively, all other categories have started 2003 with inflows:  corporate bonds ($23 billion), government bonds ($13.7 billion) and international/global bonds ($2.1 billion) and tax-free ($2.0 billion).

Get more!  Sign up for PLANSPONSOR newsletters.

As was the case with February’s figures, March was good to bond funds.  In terms of net flows, three out of the top five Morningstar fund categories belonged to bond funds.  High yield bond funds stepped up into the top stop for the month, accumulating $4.7 billion. 

Coming in second place were inflows seen in short-term bonds of $2.1 billion.  Rounding out the top five March inflow categories were:

  • Ultra short bonds – $1.8 billion
  • Domestic hybrid – $1.4 billion
  • Large Blend – $1.1 billion

Family Reunion

Falling into the same rank as the previous month, the Vanguard Group and Fidelity Investments were once again head of the class in terms of total assets, with $471 billion and $456 billion, respectively.  Behind the two sizeable fund families in the total asset race were:

  • American Funds – $321 billion
  • Franklin Distributors Inc – $146 billion
  • Putnam Investments – $125 billion

However, the order got shuffled in March’s best-sellers list, as number one and three leap-frogged into each other’s place.   Vanguard Group held this month’s top stop, recording net flows of $3.2 billion, with American Funds gaining $2.8 billion.  Rounding out the top five in monthly net inflows were:

  • PIMCO Funds – $2.3 billion
  • Fidelity Distributors   – $1.1 billion
  • Dodge & Cox – $958 million

Year-to-date, the top three held true to the previous month’s order, with American Funds on top after $8.9 billion in net flow.  PIMCO followed closely behind, obtaining $8.2 billion and the Vanguard Group tallied $7.8 billion thus far in 2003.  Finishing out the top five list was Dodge & Cox and Fidelity Distributors with $2.6 billion and $2.5 billion in year-to-date net inflows, respectively.

Individual Performance

Dislodging the PIMCO Total Return from the top spot in March’s net flows was the Vanguard Total Stock Index, with $1.6 billion.   First American Core Fund held down the number two spot for the month after a $1.1 billion flow in March, followed by the PIMCO Low Duration’s $771 million for the month.  PIMCO’s Total Return, collecting $621 million and Dodge & Cox’s Stock fund, recording a net inflow for the month of $617 million, held the fourth and fifth spots.

Excluded from the report is all data from money market funds.

Compliance April 23, 2003

Judge: Publish FMLA Policy in Worker Handbook

April 23, 2003 (PLANSPONSOR.com) - The Family and Medical Leave Act (FMLA) policy from an Illinois town couldn't be enforced because it was not properly described in the employee handbook and, therefore, not properly enacted.
Reported by

>So US District Judge William Hart of the US District Court for the Northern District of Illinois refused a request by the Village of Glendale Heights to throw out an FMLA suit by Jacquelyn Dodaro, a former office technician for the village’s public relations department, according to Washington-based legal publisher BNA.

>Glendale Heights tried to implement the “rolling method” for determining FMLA eligibility – under which the parties agreed that Dodaro would have been ineligible for leave – by providing employees with written copies of the new policy. But the change was not actually effective until a few years later, when the town documented the policy in its employee handbook as required by US Department of Labor regulations, the judge found.

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

>Because the town did not properly choose the rolling method during the time at issue in Dodaro’s case, Hart found, the more employee-friendly “calendar method” was applicable. Under that scheme, Dodaro was eligible to take FMLA-protected leave in June 2000, when she was suspended, and later fired for excessive absenteeism, Hart said.

Work Absences

>During her employment, Dodaro had a “substantial number” of absences, the court said. From February 20, 1998, to the end of the year, she was absent from work for 221.5 hours. In 1999, she was absent for about 590.75 hours. About 472 hours of that was unpaid FMLA leave, the court said.

>Between January 1, 2000, and May 31, 2000, Dodaro was absent 132.5 hours. On May 31, while at work, Dodaro felt unbalanced and dizzy and was taken to a hospital in an ambulance. Before leaving, she requested FMLA leave but the request was denied because she already had used 12 weeks of leave in the preceding year. The employer allowed her to use her vacation time to cover absences through June 8, but her request for unpaid leave beginning June 8 was denied.

>In June, she was diagnosed with Meniere’s Disease, a condition that causes dizziness and imbalance because of too much fluid in the inner ear. Her doctor informed the village that she had a “balance problem” and recommended that she not work until her balance recovered. Sometime between June 8 and June 22, Dodaro’s supervisor decided that she should be suspended for being on unauthorized leave and because of her past history of absenteeism, the court said. Effective June 22, she was suspended for 10 days. Ultimately Dodaro was fired, effective August 18.

>The town’s Administrative Policy 98-04, dated April 27, 1998, provides that an employee’s FMLA eligibility will be defined as a rolling 12-month period, measured backward from the date an employee uses FMLA leave. When the written policy was first issued, it was provided to each employee, and a copy was posted on the employee bulletin board for three to six months. In September 2000, after Dodaro was fired, the policy was incorporated into the employee handbook.

>FMLA notice regulations state that if the employer provides any written guidance to employees about their leave rights, such as an employee handbook, information about FMLA rights must be included. Regulations further provide that if an employer does not properly notify employees of their FMLA rights, it may not take action against them for failure to comply. The case is Dodaro v. Glendale Heights, N.D. Ill., No. 01C6396, 3/28/02.

«