Break from the Grind March 5, 2019

Most Managers Believe March Madness Activities Boost Morale and Productivity

However, nearly half of professionals surveyed say they are distracted by sports activities at work.
Reported by

With March Madness approaching, research from global staffing firm Robert Half, 72% of senior managers said college basketball tournament activities have a positive impact on staff morale.

Get more!  Sign up for PLANSPONSOR newsletters.

More than half of survey respondents (52%) also see productivity benefits.

Three-quarters of companies report they organize sports-related festivities in the office. These include friendly competitions (45%), wearing team apparel (43%), watching games (29%) and decorating workspaces (28%).

However, nearly half (49%) of professionals surveyed say they are distracted by sports activities at work. This includes 64% of males and 33% of females. In addition, two-thirds of employees ages 18 to 34 say they are distracted by sports activities at work, compared to 43% of those ages 35 to 54 and 27% of those ages 55 and older.

The online surveys include responses from more than 2,800 senior managers at companies with 20 or more employees in 28 major U.S. cities and more than 1,000 workers 18 years of age or older and employed in office environments in the U.S.
Compliance March 5, 2019

Appellate Court Supports Win in Lawsuit Over Sequoia Fund in Disney 401(k)

The court found the Sequoia Fund’s investment in Valeant Pharmaceuticals was consistent with the retirement plan documents, and plaintiffs concentrated unnecessarily on whether the fund purported to be a value fund or growth fund.

Reported by

A federal appellate court has affirmed a lower court decision in a lawsuit against Fidelity Management Trust Company as a fiduciary to the Disney Savings and Investment Plan that retirement plan participants failed to prove that continuing to offer the Sequoia Fund as an investment option in the plan was a breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA).

In their second amended complaint, the plaintiffs argued that the Sequoia Fund purported to be a value fund, but increased investments in Valeant Pharmaceuticals—which saw a decline in stock value after its accounting practices and investment strategies were called into question—created a “clear indicia of a growth stock,” and did not meet the Sequoia Fund’s purported investing criteria of seeking out value stocks. They argued that plan fiduciaries should have moved, even before the Valeant accounting issues and subsequent losses, to vacate the plan’s investment in the fund, according to their duties of prudence and loyalty under ERISA.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In its opinion, the 9th U.S. Circuit Court of Appeals said as a general matter, allegations based solely on publicly available information that a stock is excessively risky in light of its price do not state a claim for breach of the ERISA duty of prudence.

In addition, the appellate court found that Sequoia’s investment and concentration in Valeant was facially consistent with the retirement plan documents, noting that both the plan’s summary plan description and Sequoia’s 2015 Prospectus note that Sequoia is “non-diversified” and there are risks associated with Sequoia’s investment strategy. To the extent that the plan documents even distinguish between “value” and “growth,” the 9th Circuit agreed with the District Court that these words were used simply to “describe [Sequoia’s] investments; not to also convey [its] overall investment strategy.”  

To find otherwise—that the documents’ use of these terms imposed material limitations on Sequoia’s investment strategy—would require drawing “unreasonable inferences,” the appellate court said.

Finally, the 9th Circuit also agreed with the District Court that allowing plaintiffs to file another amended complaint would be futile.

«