Pension Action E-Newsletter

 

July 20, 2007

Verizon Shareholders Mark Big Win at Annual Meeting
Verizon shareholders now have a “say on pay.” At their annual meeting, Verizon shareholders voted to allow shareholders to have a nonbinding advisory vote on executive compensation. “Because the vote is nonbinding, the company does not have to follow the shareholder mandate,” says C. William Jones, President and Executive Director for the Association of BellTel Retirees, who introduced the proposal. But this vote will allow shareholders to voice their concerns about the excesses of executive compensation in a way that they haven’t been able to before. It's a “tremendous step forward for the rights of shareholders.”  Similar resolutions have been adopted by shareholders at Blockbuster, Ingersoll-Rand, and Motorola.

Bills Aim to Give Shareholders Vote on Executive Pay
Like the say-on-pay resolution passed by Verizon shareholders, two bills in Congress would give shareholders a vote on how much a company pays its top executives. Beginning in 2009, H.R. 1257 and S. 1181, both named the Shareholder Vote on Executive Compensation Act, would give shareholders the opportunity to note their concerns about the extreme levels of executive pay. The House version of this bill was passed in April. You can read more about it on the web site for the House Financial Services Committee. The Senate version of the bill was introduced by Senator Barack Obama earlier this year and referred to the Senate Committee on Banking, Housing, and Urban Affairs.

Former Employees Have the Right to Sue Retirement Plans
According to a ruling by the U.S. Court of Appeals for the 7th Circuit, former employees have a legal right to sue their retirement plans if they believe the plan administrators acted unlawfully. Other courts have ruled that former employees who have taken distributions from their plans are not considered to be plan participants and, therefore, did not have the right to sue their plans. The court’s ruling affects employees in Illinois, Indiana and Wisconsin. Read more about this case in the Action in the Courts section of our web site.

Department of Labor Wants Advice on 401(k) Fees
The Department of Labor is asking for comments on how 401(k) fees should be disclosed to participants. It can be very hard for employees to find out how much they are being charged for investment management, recordkeeping, marketing, and other services. 401(k) fees can drain a person’s account balance, and most people don’t know how much they are being charged. For example, if a plan says that a particular investment fund has an annual return of 8 percent and the fees add up to 1 percent, the investors in that fund may not realize that they are actually earning only 7 percent. For more information on how to submit your comments, read the Request for Information released by the Department. Comments are on 401(k) fees are due on July 24.

Articles of Interest
Please note that some news web sites require free registration to read an entire article, and some links may expire within several days after the article's publication date. You can find other recent articles in the Pensions in the News and PRC in the News sections of our web site.