Benefits January 29, 2007

Va. Furniture House Firm Axes ESOP for 401(k)

January 29, 2007 (PLANSPONSOR.com) - A Virginia-based marketing company for the home furnishing sector announced Monday that it would shut down its Employee Stock Ownership Plan (ESOP) and shift the participant balances to a 401(k) plan because the cost of maintaining the ESOP got too high.
Reported by

Hooker Furniture Corp. said that part of the reason for the shift away from the ESOP is because of its decision to cut jobs by about 1,000 workers when it switched from being a domestic wood manufacturer to more of a marketing firm.

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“ Our decision to discontinue the ESOP was primarily based on the fundamental change in our Company ‘ s business model over the last few years, “ said Paul B. Toms Jr., chairman, chief executive officer and president, in a company news release. “ In light of our changing business model, terminating the ESOP is in the mutual best interests of the Company, its shareholders and its employees. “

A higher share price since the plan’s inception in 2000 and fewer employees made the plan cost as a percentage of payroll too great, according to an Associated Press report. The plan averaged 7.5% of payroll from 2004 through 2006, but the company expected the payments would have ballooned this year, the news report said.

The firm expects to cut another 280 jobs in March when it closes its remaining manufacturing facility.

Hooker said in its announcement that previously unallocated shares of company stock held by the ESOP will be allocated to eligible participants Under the terms of the ESOP, a participant ‘ s ESOP account balance will be rolled over to the company ‘ s 401(k) plan, unless the participant otherwise chooses a distribution or a rollover to an IRA or another qualified retirement plan.

According to the AP, Hooker Furniture will pay a one-time charge of $18.4 million to account for the change, but predicts an annual savings of at least $3.4 million by closing the plan.

Benefits January 26, 2007

Super Bowl Talk Isn't Cheap

January 26, 2007 (PLANSPONSOR.com) - With the Super Bowl only a week away, the folks at Challenger, Gray & Christmas have once again attempted to quantify the impact on workplace productivity.
Reported by

In fact, the various partying plans, pooling, and/or surfing for information about Super Bowl XLI could cost employers some $800 million in lost productivity this next week, according to the outplacement firm.

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In Chicago and Indianapolis, the two cities whose National Football League teams will face off on February 4 – losses could reach $85 million, according to the firm’s estimates. In Indianapolis workers are expected to cost their employers $2.5 million for every ten minutes of lost productivity, while Chicago employers could lose $14.6 million for the same time.

The firm says that if employees spend 10 minutes a day focused on the game, that adds up to $162.1 million per day, based on average earnings and expected viewership.

The Mourning After

Then there is the day after the championship when people discuss the game’s plays, the TV commercials, or simply call in sick, resulting in more money lost, the outplacement consultant reported.

None of this contemplates the positive impact that the event surely has on the economy – well, at least certain food and beverage producers. And what Madison Avenue do, shorn of the nation’s willingness to actually wait FOR the commercials?

Ultimately, of course, if there wasn’t the Super Bowl, it would probably be American Idol, 24, or Desperate Housewives. Or surveys about how much time we’re wasting talking about such things.

At least we’re talking.

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