Administration June 12, 2006

Funds Appeal SEC Staff Disney Proxy Access Decision

December 30, 2004 (PLANSPONSOR.com) - The battle by four pension funds to give Walt Disney Co's shareholders more power to nominate board directors continued Wednesday as the funds asked regulators to rethink a preliminary decision effectively blocking the move.
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The funds’ appeal to the US Securities and Exchange Commission (SEC) followed word on Tuesday that SEC staff members had reversed their earlier decision and were now siding with the company’s efforts to keep a shareholder director nomination proposal from being considered at its annual meeting, Dow Jones reported (See  SEC Staff Does About Face on Disney Proxy Issue  ). Even though SEC staff had originally told Disney on December 8 it could not exclude the funds’ director nomination plan from its annual proxy materials, an SEC official doubled back on that judgment this week by telling the entertainment company that staff members had now decided there was “some basis” for its efforts to block the funds’ proposal.

In their appeal letter, the funds demanded that if the commission agrees with its staff, that it also decide the broader issue of shareholders’ general access to the proxy materials sent to shareholders before annual meetings.

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“In the event that the commission declines to review staff’s position, we request that the commission direct the staff to explain its position so that shareholders and public companies have clear guidance on the viability of open access shareholder proposals and properly draft any such proposals,” the pension group said in a December 29 letter to SEC Chairman William Donaldson.

 Involved in pushing the director nomination initiative are:

  • the American Federation of State, County and Municipal Employees Pension Funds
  • the California Public Employees’ Retirement System
  • the Illinois State Board of Investment
  • the New York State Common Retirement Fund.

The SEC has been pondering the issue of shareholder access to corporate ballots and has already proposed a rule making it easier for shareholders to nominate their own board candidates using company-issued proxy ballots. More information about the SEC’s delilberations is at http://www.sec.gov/spotlight/dir-nominations.htm .

Administration June 11, 2006

UAL Fiduciary to ask Court for $1B in Pension Contribs

November 30, 2004 (PLANSPONSOR.com) - An independent fiduciary appointed to the United Airlines bankruptcy case is set to ask a US Bankruptcy Judge for permission to allow it to collect up to $1 billion in pending pension contributions.
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Independent Fiduciary Services (IFS), which was appointed earlier this year as part of an agreement between United parent UAL and the US Department of Labor (DoL) (See  United, DoL Agree to Independent Fiduciary ), will ask that the company’s minimum pension funding requirements be designated as “administrative priority expenses” and released, Dow Jones reported.

As per terms of its appointment, IFS was authorized to

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  • review the funding policy of the plans
  • assert claims
  • file lawsuits about the plans’ funding and the company’s contributions.

“IFS has reviewed documents and conducted investigations contemplated by its agreement,” according to documents expected to be filed with the court, Dow Jones reported. “Based on its investigation, IFS has determined that United has not only failed to pay mandatory (pension) contributions required by the Internal Revenue Service Code which came due (after the bankruptcy filing), but also those contributions directly attributable to the post-petition service of its employees.”

In June, the airline’s Board of Directors changed the structure for managing its retirement plans by eliminating the plans’ administrative committee and appointing UAL, the parent company, as the sole plan fiduciary.   On July 15, UAL did not make a required $72 million contribution to three of the plans, claiming its bankruptcy financing prohibited it from doing so. (See United Skipping Fall Pension Payment ).

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