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Georgia Restrictive Covenant Act

August 31, 2011

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Georgia Restrictive Covenant Act

August 31, 2011

Authored by: benefitsbclp

On May 11, 2011, Georgia Governor Nathan Deal signed House Bill 30 into law, beginning a new era for non-compete, non-disclosure, and non-solicitation agreements under Georgia.  Georgia historically has been an inhospitable forum for employers seeking to enforce restrictive covenants against former employees.  Georgia’s new Restrictive Covenant Act (the “Act”) clarifies and strengthens the ability of employers to restrict conduct during and after employment.

Importantly, the Act applies only to Georgia restrictive covenant agreements entered into on or after May 11, 2011.  Employers with operations in Georgia should revisit their restrictive covenant agreements and consider revising their agreements to take advantage of protections of the new law.  Historically, Georgia law has not required new or additional consideration to support a new restrictive covenant agreement signed by a current employee, so employers are in a good position to strengthen their competitive protections, at this time, should they choose to do so.

Individual PTEs Dodd-Frank Act

Individual PTEs Dodd-Frank Act

August 31, 2011

Authored by: benefitsbclp

Earlier this summer, the DOL issued a “FAQ on Credit Ratings and Individual Prohibited Transaction Exemptions”  concerning how Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) will impact prohibited transaction exemptions (“PTEs”) granted to individual fiduciaries or transactions under Section 408(a) of ERISA.  Section 939A of the Dodd-Frank Act generally requires federal agencies to review and modify existing regulations that refer to, or require reliance on, credit ratings within one year following the enactment of Dodd-Frank (i.e., by July 21, 2011).   Certain individual PTEs refer to or rely upon credit ratings.

In its FAQ, the DOL confirmed its position that individual PTEs do not qualify as “federal regulations”; accordingly, Section 939A of the Dodd-Frank Act does not require review and modification of previously granted exemptions. This means that individual PTEs will remain in force with no modifications despite the Section 939A July deadline.

Major League Baseball Pension and Healthcare Benefits

August 30, 2011

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Major League Baseball Pension and Healthcare Benefits

August 30, 2011

Authored by: benefitsbclp

Arguably, Major League Baseball (“MLB”) offers one of the best pension and healthcare programs in all of sports. Players vest in their pensions after 43 days on the active roster and just one day qualifies a player for lifetime healthcare. Playing isn’t even a requirement, benchwarmers may qualify for benefits as well. After 43 days, players qualify for the minimum benefit of $34,000 per year and those with 10 years of service receive a pension of approximately $100,000 annually. In 2010, the MLB Players’ Pension Plan reported assets of over $1.3 billion for approximately 8,200 participants.

However, these generous benefits have not always been available. While baseball players first obtained a pension in 1947, some claim the plan was very poor. Pension plan vesting and lifetime healthcare required four years of service. Over the years the MLB Players’ Association negotiated higher benefits and won more concessions in the

WSJ Renewed Interest in Target-date Funds

August 30, 2011

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WSJ Renewed Interest in Target-date Funds

August 30, 2011

Authored by: benefitsbclp

According to a recent article in the Wall Street Journal, some employers are taking a hard look at their 401(k) plans’ target-date investment funds.  These funds target a future year geared to the expected retirement date selected by the participant.  They attempt to simplify investing for the average participant by gradually adjusting the asset allocation over time by moving away from equities toward fixed income investments, becoming more conservative, as the target date approaches.  This approach accepts more volatility in hopes of obtaining larger gains at younger ages and less volatility and opportunity for gain as retirement and the need to use the money approach.

While these fast growing funds became popular by offering a convenient one-size-fits-all choice for investors, recent criticisms imply simpler might not always be better.  The 2008-09 financial crisis and the recent 2011 volatility highlight that target-date funds simply offer investors a different (though usually more

Seventh Circuit Overturns Dismissal of Collusive Trading Action Brought By AnchorBank

August 24, 2011

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Last Friday, the Seventh Circuit issued an opinion overturning the lower court’s dismissal of a lawsuit brought against Hofer, an employee of AnchorBank, alleging  that, along with two other employees, Hofer engaged in a collusive trading scheme in violation of Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 (“1934 Act”).  The two other employees settled with AnchorBank before the lawsuit was filed.

In its second amended complaint, AnchorBank alleged that Hofer and his two co-conspirators coordinated their purchase and sale of units in the AnchorBank Unitized Fund (“Fund”), which was an investment option in the AnchorBank 401(k) plan that held cash and company stock.  The alleged scheme involved the coordination of the sale of Fund units, triggering a payout from the Fund’s cash reserves to the suspected co-conspirators.  Since the trustee was required to maintain a particular cash-to-stock ratio in the Fund, it was then forced to

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