Compliance January 16, 2007

UK Regulators Ban Ericsson Pension Chair for Misdeeds

January 16, 2007 (PLANSPONSOR.com) - UK pension regulators have banned the chairman of the Ericsson pension fund from getting involved with any trust-based pension after finding that he had lied about executive benefits and benefited from conflicts of interest.
Reported by

The Pensions Regulator announced the move against David John Foster, an Ericsson human resources manager, in a  news release .Ericsson is a global telecommunications equipment and services provider that is based inStockholm, Sweden.

After being alerted to potential problems by a whistleblower’s report, the Pensions Regulator appointed an Independent Trustee to the Ericsson plan to secure funds and begin an investigation into Foster’s conduct, according to the announcement. The new trustee cancelled planned executive transfers and arranged to hold a second pension for Foster pending an inquiry. Two transfers worth £2.46 million, which had already been paid, were recovered by Ericsson.

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

According to the regulators, as chairman of the Trustees of the Ericsson Employee Benefits Scheme, Foster misrepresented the pension benefits of executive members to Ericsson senior management. The representations added as much as £13.4 million to transfer values, increasing pension liabilities of the final salary plan and the sponsoring employer, the officials said.

Foster falsely claimed that executive members’ benefits accrued at a 1/30th rate and were entitled to receive unreduced benefits from the age of 50 – a benefit level he said already existed. The regulators said, however, that such a move would have required approval from Ericsson.

Finally, according to the news release, Foster stands accused of also accepting for himself an “exceptionally favorable” second deferred pension, which had the potential to affect the benefits of other plan members, without informing or seeking approval from other trustee directors.

The panel also found that Foster had failed to properly identify and handle conflicts of interest arising from his roles as chairman of the corporate trustees and as human resources manager. Foster excluded other trustee directors from significant decisions and failed to interact with them to the extent that some trustees were neither aware of the existence of the executive scheme, nor of its financial impact.

Foster was appointed as a director of Ericsson Employee Benefits Scheme Limited in November 2002, and was chairman of the scheme’s board of directors between July 2004 and September 2005 when he resigned.

The actions for which Foster was disciplined took place between April 2004 and June 2005. The Pensions Regulator was alerted by a whistleblower’s report on July 1, 2005 and appointed an independent trustee on July 7, 2005.

Compliance January 12, 2007

NLRB to Hear Arguments on Employer E-mail Use for Union Activities

January 12, 2007 (PLANSPONSOR.com) - The National Labor Relations Board (NLRB) is inviting interested parties to file briefs and requests to participate in oral arguments for the board's March 27, 2007 hearing in a case in which The Guard Publishing Company is accused of interfering with union activity by barring personal use of its e-mail system by employees.
Reported by

In February 2002, an administrative law judge found that The Register-Guard, which publishes a daily newspaper in the Eugene, Oregon, area, discriminatorily enforced its policy prohibiting the use of the company’s e-mail system “to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job-related solicitations.”

Evidence showed the firm issued warnings to local union president Suzi Prozanski after she sent e-mails to a group of employees relating to union activities, but other employees, including managers, were not disciplined after sending e-mails relating to Weight Watchers meetings, the United Way campaign, parties, and birth announcements.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

In the case, the Eugene Newspaper Guild, a local chapter of the Communications Workers of America (CWA), also charged the newspaper with proposing an illegal subject during collective bargaining with the local union and with unlawfully maintaining a policy prohibiting the display of union insignia or signs.

The newspaper proposed contract language prohibiting employees from using its electronics communications systems for union matters. The judge said the initial proposal was not unlawful, but insistence on it after rejection by the union was, and ordered the newspaper to retract its proposal.

As for the policy prohibiting the display of union insignia or signs, the judge pointed out an employee’s right to wear or display union insignia is protected by the law. He also said the evidence did not show that an employee’s wearing of and display of union insignia adversely affected business, and the evidence did show that the newspaper discriminatorily enforced its dress code by allowing others to display insignia such as from sports teams when dealing with the public. The judge ordered a repeal of the newspaper’s policy against union insignia.

The NLRB said briefs on issues raised in the case must be filed with the Board’s Executive Secretary in Washington, DC by February 9, 2007 and should include a request to participate at oral argument, if desired.

More information can be found here .

«