Montana Supreme Court Turns Away Pension Shutoff Appeal

December 7, 2009 (PLANSPONSOR.com) – Two months after they upheld a $21.5-million jury award in a long-running pension benefit termination case, justices at the Montana Supreme Court have refused to take another look at a power company’s appeal.

The Associated Press reported the state Supreme Court’s action in a final appeal in the challenge by 15 former Montana Power Co. executives whose supplemental retirement benefits were halted without them being properly notified beforehand. According to the news account, plaintiffs were awarded their original $2.5 million in pension payments, another $15 million in compensatory damages, plus $4 million in punitive damages.

The case began when NorthWestern Corp. of South Dakota filed for U.S. Bankruptcy Court protection in 2004, stopped the pension payments, and asked court permission to terminate the contracts. The company had assumed the supplemental retirement contracts when it acquired Montana Power Co.’s transmission and distribution assets in 2002.  

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The retirees holding the supplemental contracts claimed they never received proper notice of the cancelation and filed the suit alleging breach of contract.

NorthWestern spokeswoman Claudia Rapkoch told the Associated Press the company had resumed the payments in November 2005.

The Montana Supreme Court’s October ruling is available here.

EU Gives OK to Towers Watson Combo

December 7, 2009 (PLANSPONSOR.com) – The European Commission has given its blessing to a major consultancy merger.

Towers, Perrin, Forster & Crosby, Inc. and Watson Wyatt Worldwide, Inc. have announced that they have been granted conditional clearance from the European Commission to allow the Parties to proceed with their merger to form Towers Watson & Co.  

U.S. antitrust authorities previously cleared the transaction, which was announced by the firms at the end of June. 

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VIPitech Sale

As part of the European Commission’s clearance decision, Watson Wyatt has committed to sell its life insurance actuarial software business, VIPitech. However, the European Commission has agreed that the merged company may retain a license to use the VIPitech software, which will allow it to continue to serve those clients that have implemented this software, according to the announcement.  Watson Wyatt is currently preparing the business for sale and will be issuing more information in due course, according to the firm.  

“This is a key milestone in our progress toward completing the transaction that will bring together our two firms,” said John Haley, Watson Wyatt Chief Executive Officer who will serve as Chief Executive Officer of Towers Watson. “We are very pleased to have received clearance from the Commission on a timescale which will allow the companies to continue plans to finalize the merger by the end of this year. While we are disappointed that we could not retain VIPitech, we are committed to ensuring that VIPitech is sold as a viable business and that all of our VIPitech clients remain fully supported.” 

The decision by the European Commission gives Towers Perrin and Watson Wyatt the necessary regulatory approvals to complete the merger.  However, the proposed transaction remains subject to additional conditions contained in the merger agreement, including the approval by the shareholders of Towers Perrin and Watson Wyatt.  Both companies’ shareholder meetings are scheduled for December 18, 2009.  Assuming that the requisite shareholder approvals are obtained and all other conditions are satisfied, the Parties currently anticipate that the merger will become effective on January 1, 2010.

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