Compliance September 13, 2005

Illegal Alien Covered Under Worker's Comp

September 13, 2005 (PLANSPONSOR.com) - Maryland's Supreme Court ruled that an illegal alien injured on the job is deemed a covered employee eligible for workers compensation benefits under Maryland law.
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Business Insurance reports that in Design Kitchen and Baths vs. Diego E. Lagos, the employer and insurer Princeton Insurance Co. argued that Lagos, injured on the job in 2001, must be denied workers comp benefits because his illegal alien status prohibited him from entering into an employment contract.  

Design Kitchen and the insurer also argued that because Lagos’ claim conflicts with the Immigration Reform and Control Act of 1986, their employment contract is void regardless of whether the employer or employee violated federal law.

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The Maryland Workers Compensation Commission and a trial court both ruled in favor of Lagos, and the Court of Appeals affirmed the ruling.   According to Business Insurance, the appeals court found that, while Maryland’s workers comp law does not specifically address undocumented worker status, it does state that any uncertainty is to be resolved in the claimant’s favor.

Benefits September 12, 2005

2000 Form 5500s Show Continuing DB Decline

September 12, 2005 (PLANSPONSOR.com) - The shift from defined benefit to defined contribution plans continued in 2000, with DB plans declining 4.1% from 50,000 in 1999 to 48,000 in 2000, and DC plans increasing 0.58% from 683,000 to 687,000.
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That was one of the findings of a recent report by the Employee Benefits Security Administration of the US Department of Labor (DoL) based on data collected from Form 5500 Annual Reports in 2000.

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The DoL researchers also found a significant rise in the amount of pension contributions made by employees. In 1978, 29% of contributions to DC plans, and 11% of total contributions to all DB and DC pension plans were contributed by participants. That compares with 2000 data showing that 60% of contributions to DC plans and 51% of contributions to all plans were made by participants.

Other findings include:

  • the number of active participants in DB plans decreased by about 2% to 22.2 million and the number of active participants in DC plans increased about 1% to 50.9 million between 1999 and 2000.
  • pension plan assets decreased nearly 5% from $4.4 trillion in 1999 to $4.2 trillion in 2000. DB plan assets decreased by 3% to $2.0 trillion, while DC plan assets shrank by 6% to almost $2.2 trillion.
  • in terms of the number of each type of plan in 2000, the DoL data found 735,651 total plans including 48,773 defined benefit plans. That included 1,290 cash balance plans. Meanwhile, there were 686,878 defined contribution programs including 566,196 profit sharing and thrift savings plans. Also in the DC column were 93,108 money purchase programs and14,473 403(b) plans.
  • of the $4.11 trillion in total net assets, $309,848,000 was in company stock, $32 million was out in participant loans and $11, 590,000 in real estate.
  • examining employer size, 301,170 of the 735,651 total pension programs of all types were at employers with two to nine employees, according to the DoL data.
  • companies with 10 to 24 workers had 166,928 plans and 91,723 plans were at companies with 25 to 49 workers. At the other end of the list, companies with 20,000 to 49,999 workers had 480 plans while those with 50,000+ worker companies had 198 plans.

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