Compliance November 22, 2005

PBGC Takes Over Two Pension Plans of Furniture Maker

November 22, 2005 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation (PBGC) announced it has assumed responsibility for two pension plans of Falcon Products, Inc. and its subsidiary Shelby Williams Industries, Inc.
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In its announcement, the PBGC said The Falcon Products Inc. Retirement Plan and the Shelby Williams   Industries Inc. Employees Pension Plan ended as of August 31, 2005.   Together the plans are 44% funded, with about $26 million in  assets to cover nearly $59 million in promised benefits. The PBGC   estimates that it will be responsible for $31.6 million of the $33   million shortfall, according to the announcement.

Workers covered by the two plans will receive their pension benefits up to the limits set by law.  Retirees will continue to receive monthly benefit checks without interruption,and other workers will receive their pensions when eligible to retire.

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Under federal pension law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2005 is $45,614 per year. The maximum guaranteed amount is lower for those who retire earlier or elect survivor benefits. In addition, certain early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.

The PBGC will send trusteeship notification letters to all participants in the two plans within the next several weeks.    

Benefits November 21, 2005

Workers Sue Utility Owner Over Retirement Savings

November 28, 2005 (PLANSPONSOR.com) - Employees of Southern Co. are suing the employer for mismanagement of their retirement savings.
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Bloomberg reports that the employees claim managers of the savings plan breached their fiduciary duty to employees and retirees by investing in Mirant Corp. stock. Mirant, a subsidiary of Southern Co., is now bankrupt.

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The suit seeks to represent more than 28,000 employees and retirees and asks the court to force Southern to reimburse millions of dollars in losses, according to Bloomberg.

Several lawsuits were filed in relation to Mirant’s bankruptcy. One retiree alleged that Mirant concealed its “participation in the illegal manipulation of energy prices in California during 2000 and 2001, as well as other irregular and unlawful accounting manipulations tied to energy trading.” (See Energy Retiree Files ERISA Violation Suit ) In another lawsuit, a retirement plan participant claimed Southern Co. and other plan fiduciaries breached their fiduciary duties to plan participants by failing to investigate whether Mirant stock was a prudent investment (See Class Action Sought on Bankrupt Stock Investment ). Mirant lawyers sought to have the case dismissed since plan participants were allowed to transfer out of the fund at any time (See Mirant Lawyers: K Plan Fiduciaries Committed No Misdeeds ).

Meanwhile, Mirant is suing Southern for $1.95 billion saying Southern caused it to incur debt while transferring assets.

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