1.
INVESTORS LEAVE $1.8 BILLION ON THE TABLE!:
According to a lead article in the Daily Business Review,
this year companies will spend a record $5 Billion in class action security
settlements, led by Lucent’s $620 Million payout in September. However,
as much as $1.8 Billion has not been claimed by institutional investors
entitled to the money. Incredibly, two-thirds of pension plans, mutual
funds and money managers do not file claims, contending the process is
cumbersome and time-consuming! The one-third of investors that do collect
benefit because size of the ultimate recovery is determined by dividing
the number of claimants into the settlement. Apparently, this phenomenon
is not new: between 2000 and 2002, institutional investors annually left
about $1 Billion on the table, a little more than half of this year’s
total. Trustees who fail to have their custodians or money managers file
claims in their behalf should keep their fiduciary liability insurance
policies handy. Clearly, trustees have a fiduciary duty to file all claims.
It is impossible to tell what a claim is worth unless the claim is filed
and processed.
2. COBRA
FOR STATE AND LOCAL GOVERNMENTAL PLANS:
In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation
Act. Although COBRA contained a wide variety of provisions affecting
everything from agriculture to veterans’ programs, the statute
has become best known for the provisions requiring group health plans
to offer certain individuals who lose health coverage the opportunity
to elect to continue such coverage for a limited period. COBRA implemented
the continuation coverage requirements by simultaneously amending the
Employee Retirement Income Security Act of 1974, the Internal Revenue
Code and the Public Health Service Act. COBRA requirements under ERISA
and the Internal Revenue Code, however, apply only to private sector
employers. COBRA requirements under PHSA, on the other hand, apply
only to certain public sector employers. A recent article in Employee
Benefits Journal deals with the important distinctions between public
and private sector COBRA. While many COBRA issues for state and local
governmental plans can be handled in the same manner as they would
be handled in the private sector, one should be alert for situations
where these distinctions may need to be considered. Finally, the article
examines two important areas that distinguish private and public sector
COBRA -- enforcement and regulatory guidance.
3.
CHICAGO WILL REWARD FIT POLICE OFFICERS:
Associated Press reports that the Chicago Police Department will offer a $250
bonus to motivate its officers to stay in shape. Like last year, the Department’s
13,500 officers were eligible for money if they volunteered for a physical fitness
test. About 20% (2,750) took the test, with all but a handful passing. Actually,
the test itself is not new: previously, the City rewarded officers with a pin,
which was not much of an incentive as only about 350 a year took the test then.
So, last year the $250 bonus was added, resulting in the greater test participation.
To receive the bonus, an officer must run 1½ miles (no time specified),
bench press most (how much?) of his body weight, do sit-ups (no number given)
and demonstrate his flexibility (“I’d bend over backwards to get
this bonus.”). Seriously, though, performance standards are based on age
and gender.
4.
MR. MANNERS ROBS FLORIDA BANKS:
According to the Associated Press, this thief is charmed, not armed. Hollywood,
Florida, police say a bank robber has used his good manners to rob thousands
of dollars, wishing tellers a Merry Christmas before he steals the money. Unarmed,
he walks into a bank, approaches a teller and offers a warm greeting. Then he
hands the teller a note, takes the cash, puts it in his own envelope and calmly
leaves. He is suspected of hitting several banks in Broward County and Miami-Dade
County over the past month. Captain Tony Rode, who happens to be a long-time
Trustee on our client Hollywood Police Pension Board, says “notwithstanding
his polite manners we consider him a dangerous felon.” Hopefully, he will
soon be saying “thank you” to the jailers who lock him up.
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