Lack of Notice "Unfortunate", But No Fiduciary Breach

August 12, 2002 (PLANSPONSOR.com) - Deaconess Waltham Hospital may not have given Larkin Watson IV information about its long-term disability plan when he became eligible, but that doesn't constitute an ERISA fiduciary breach, according to a federal court.

The US First Circuit Court of Appeals ruled that that the hospital would have had to actively conceal the benefits program, acted in bad faith, or committed fraud in order for Watson to make a fiduciary duty case.

“There was no evidence that the hospital acted in bad faith,” the appeals judges wrote. “It appears that Watson simply slipped through the cracks in this system when he switched from part-time to full-time employment status, as unfortunate occurrence but not bad faith, concealment, or fraud.”

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In the hospital’s favor was the fact that it had put on a benefits fair to answer employee benefits questions. 

Status Switch

According to court papers, the hospital hired Watson in 1992 as a part-time addition counselor. He was given a list of benefits with an “n/a” notation next to long-term disability.

He went full time a year later, which made him eligible for the long-term disability program. However, Watson alleged that no one informed him that he was eligible for long-term disability benefits, nor was he given a summary plan description or other notice of benefits.

After Watson began having health problems in 1995, he met with his supervisor who encouraged him to switch back to a part-time schedule. Watson alleged that this conversation “induced” him to change his status to part-time employment.

As a result of the part-time schedule, Watson became ineligible for participation in the long-term disability plan. Watson alleged that no one at the hospital informed him of the consequences of his switching back to part-time employment.

Watson sued after becoming disabled in 1999 and being denied disability coverage. A lower court judge agreed with the hospital and Watson appealed.
 
The case is Watson v. Deaconess Waltham Hospital, 1st Cir., No. 01-2133, 8/8/02.

 

Average Finance Pay Soars in 2001

July 24, 2001 (PLANSPONSOR.com) - Total average compensation for treasury and financial management professionals increased by 8.1% in 2001 from the previous year, according to a new survey.

The Association for Financial Professionals’ 13th Annual Compensation Survey also found that nearly 90% of the practitioner respondents received an increase in salary this year.

The survey found that financial officers’ average total compensation, comprising base salary, bonus and deferred compensation, was $122,170, compared with $112,986 in the 2000 survey.

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Why Ask Why?

Survey participants were asked to select factors that contributed to their salary increases,

  • 54%, of practitioners cited merit as the chief contributor,
  • 38% said individual performance,
  • 24% benefited from “general increases”
  • 13% cited cost-of-living adjustments

“Check” It Out

The highest total compensation packages are taken home by:

  • President?s or CFO?s who receive average compensation packages of $241,841
  • followed by CFOs who earn $190,933 on average,
  • Vice-presidents of Finance who get $178,724, and
  • Treasurers who receive $158,404

Location, Location

Across industries, the highest compensation gains were recorded in:

  • banking-related financial services, where compensation increased by15%,
  • followed by the software and hardware industries which rose by13.6%, and
  • the non-petroleum energy sector, where remuneration was up by13.5%.

At the other end of the scale, were:

  • the hospitality industry, where compensation rose by 6.9%
  • the non-profit sector which increased by 7%, and
  • compensation in the petroleum sector, which increased by 7.1%

Further, the survey found that practitioners in the Northeast received higher packages than their peers, with average total compensation of $137,112, an increase of 8.5% on 2000 numbers. In other regions,

  • those in the southeast received $108,923, up 7.2%
  • followed by practitioners in the Midwest who received $114,822, an increase of 7.2%,
  • while their counterparts in the West received $113,318, an increase of 8%

Other Benefits

Over two-thirds (68%) said their firms offered a flexible workday, while 21% have flexible workweeks. Nearly three-quarters (74%) have casual dress codes.

More than 60% of bankers and nearly half (45%) of corporate practitioners “experienced” a merger in the last two to three years. Of those, nearly three-fourths of the bankers and half the practitioners saw layoffs in their department as a result.

Most popular recruiting tools were moving expenses and temporary living allowances, followed by hiring bonuses and the purchase of a former residence.

The survey gauged the responses of to over 150 questions on the career development, compensation and benefits, of 2,980 financial professionals.

Go to http://www.AFPonline.org for a summary of the survey results.

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