Administration September 13, 2011

Funded Status Deficit Increases by $62 Billion in August After $66 Billion Increase in July

 September 13, 2011 (PLANSPONSOR.com) - Milliman, Inc. released the results of its latest Pension Funding Index, which consists of 100 of the nation's largest defined benefit pension plans.

 

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 In August, these plans experienced a $29 billion investment loss and a $33 billion increase in pension liabilities. The August increase in the pension funded deficit comes on the heels of an even larger increase in July. The combined $128 billion growth in the deficit between June 30 and August 31 is the largest two-month increase since a $134 billion increase in May and June of 2010.

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“It’s been another rough summer for these 100 pensions," said John Ehrhardt, co-author of the Milliman Pension Funding Study. "While the August results are discouraging, these pensions ended the month with a rally when you consider that, as of August 8, the deficit had ballooned by $97 billion in just five business days. With volatility on the asset side continuing, and no sign of interest rates rising anytime soon, we may be in for more turbulent times."

For the year, the cumulative asset return on these 100 pensions has been 1.15% and the Milliman 100 PFI funded status has decreased by $86 billion, dropping the funded ratio from 84.1% to 79.3%.

To view the complete study, go to http://ow.ly/4xFIt. 

Benefits September 13, 2011

Seattle City Council Mandates Paid Sick Leave For Workers

 September 13, 2011 (PLANSPONSOR.com) – The Seattle City Council approved legislation yesterday requiring businesses to offer their workers paid sick leave, Seattle PI reports. 

 
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 According to the article, the measure, which takes effect September 2012, specifies the amount of sick time offered to employees would vary by the size of the business. The legislation mandates:

•  Employers with between one and four employees would not be required to offer sick leave. 

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•  Students in work-study jobs would also not be eligible. 

•  Businesses with up to 49 workers would have to offer up to one hour of sick time for every 40 hours worked. 

•  The biggest companies—250 or more employees—would also need to give paid time off equivalent, one hour for every 30 hours worked. 

•  The biggest businesses that already give PTO that combines sick time and vacation time into a "single pot" wouldn't have to offer 1.5 hours of paid time off for every 30 hours worked. 

•  Shift swapping would be allowed, and employees would have to work a minimum number of days to qualify. 

•  There's also now a requirement for an independent evaluation to assess what the impact of the new law on employers is, which will be overseen by the City Auditor. 

•  New businesses (those less than two years old) would be exempt. 

•  The right to sick leave could be negotiated away, with consent of unions.

Seattle PI reports that the Economic Opportunity Institute estimates nearly 200,000 workers in Seattle now get no paid sick days. 

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