BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
LABOR DEPARTMENT APPROVES PLAN FOR TCW TO GIVE 401(K) ADVICE
WASHINGTON-TCW Group Inc. has been given the green light to provide personalized investment and retirement planning adviceto 401(k) plan participants.
The Department of Labor late last week granted the Los Angeles-based money manager a prohibited transaction exemptionallowing it to receive fees for advising participants in 401(k) plans with $5 million or more in assets on how to allocate their retirement money among a family of TCW mutual funds.
Until last week, Labor Department guidelines limited 401(k) plan sponsors who contract with the money managers to providing participants general financial and investment information. It was thought that if money managers gave participants detailed recommendations, they would be influenced by the level of fees associated with various investment options. Plan sponsors, subsequently, would face potential fiduciary liability due to a decision to contract with the money manager.
Under TCW's proposal, sent to the DOL in September and approved last Thursday, TCW will use outside experts to develop asset allocation scenarios tailored to an individual's retirement goals and risk tolerances. All investment advice will be based on responses provided by participants to worksheet questions developed by the independent experts. Participants have the option to disregard the recommendations (BI, Sept. 8).
"Because TCW will have limited discretion in recommending in which trust participants will invest, the department believes there is little likelihood for abuse," the DOL said in a statement.
Those familiar with TCW's plan say it will be a blueprint for other companies to begin offering more detailed advice and recommendations. As a result, they say, 401(k) plan sponsors will see improved 401(k) participation.
Brian Tarbox, senior vp of the defined contribution group at TCW, said if all goes as planned, the product would be introduced to the public July 1, 1998. TCW plans to target companies with at least 1,000 employees.
Consumers oppose liability bill
WASHINGTON-A group of consumer organizations is seeking a meeting with President Clinton to persuade him to oppose a compromise federal product liability bill.
Meanwhile, Senate negotiators have continued to meet to iron out differences between a White House-backed draft product liability reform proposal put together by Sen. John D. Rockefeller IV, D-W.Va., and a version of the measure redrafted by Sen. Slade Gorton, R-Wash. (BI, Oct. 27). Business groups said a consensus measure could be unveiled as early as this week before Congress enters its year-end recess.
The Rockefeller proposal would cap punitive damages only for small business, set an 18-year statute of repose for manufacturers of products that have been used in the workplace, protect retailers and wholesalers from product liability suits, and establish clear rules involving the misuse or alteration of a product.
The consumer groups opposing the bill, which include the National Breast Implant Task Force and the Dalkon Shield Information Network, branded the Rockefeller bill as "anti-consumer" and contrary to the principles espoused by President Clinton when he vetoed last year's product liability reform bill (BI, May 6, 1996). The letter's authors said they are concerned that families of victims of faulty products "have been ignored in this backroom process," and they requested a meeting with the president to air their views.
Sears settlement approved
BOSTON-Under a settlement approved by two federal judges in Boston last week, Sears, Roebuck & Co. will pay $158 million to 190,000 credit card customers in connection with improper collection practices applied to customers who had received bankruptcy protection.
"What it amounted to was Sears paying back everything that had been collected by the company under reaffirmation agreements that were not filed," said a company spokeswoman. In addition, the settlement amount includes 10% accrued interest, forgives the bankrupt customers' debt and includes an additional $25 million settlement to be distributed among the participants in the class action.
Plaintiffs attorneys' fees will not be paid out of the $25 million, the Sears spokeswoman said. "Sears has agreed to pay those separately." The court has yet to approve a figure for those attorneys' fees.
Earlier this year, Sears reached a separate $40 million settlement agreement with the attorneys general of the 50 states in connection with the case. The company estimates researching its credit card records to identify affected customers going back to 1992 will cost another $14 million.
Hoffman Estates, Ill.-based Sears never disputed that it failed to obtain necessary judicial approval in collecting debts from some bankrupt customers. The company took a $320 million post-tax charge against second-quarter earnings in connection with the case.
"When the issue came up in April we alerted our insurers, but beyond that I wouldn't want to comment," the spokeswoman said.
Class members should begin receiving restitution and interest checks in December, with their shares of the additional settlement payment probably going out in March 1998.
The California Supreme Court last week let stand an appellate decision in Michael J. Marks vs. Loral Corp. (BI, Aug. 11) that held that companies can replace higher-paid employees with younger, lower-paid workers for economic reasons without violating age discrimination laws. . . .Wilmington, Del.-based Dupont Merck Pharmaceutical Co. has reached a tentative settlement in connection with drug pricing antitrust suit taking place in U.S. District Court in Chicago. While confirming that a tentative settlement had been reached with the thousands of retail drug stores that are plaintiffs in the case, a spokesman for the E.I. du Pont de Nemours & Co. and Merck & Co. joint venture would not confirm reports that the settlement is for $22 million or discuss other details of the agreement.