The U.S. Securities and Exchange Commission (SEC) issued a no-action letter on February 18, 2015, that extends relief from SEC Rule 482 to sponsors of certain retirement plans exempt from ERISA. The relief permits sponsors of non-ERISA plans to follow final U.S. Department of Labor regulations for participant-level fee disclosures, provided the sponsor complies with several conditions set forth by the SEC.
The U.S. Securities and Exchange Commission recently issued a proposed rule that would require public companies to disclose in annual proxy statements whether their employees and board members may hedge or otherwise offset any decrease in the market value of such companies’ equity securities. The proposed rule implements Section 955 of the Dodd-Frank Act and covers a broader range of transactions than typical hedging policies.
The U.S. Securities and Exchange Commission recently amended the rules governing money market funds in an effort to increase the stability and liquidity of these funds in times of economic stress. Sponsors of retirement plans should consider how their use of money market funds should be changed in light of these revised rules.
by Andrew C. Liazos, Ira B. Mirsky, Anne G. Plimpton and Ruth Wimer
A recent shareholder derivative action alleges that the directors of Chesapeake Energy breached their fiduciary duties to shareholders by, among other things, misleading shareholders about the true extent and true cost of personal use of the company’s aircraft. The complaint raises questions about disclosure practices that could affect how public companies determine the aggregate cost of perquisites on proxy statements. It appears that the plaintiffs’ bar is already targeting potential plaintiffs for similar cases using the lure of whistleblower recoveries.
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by Ruth Wimer
Recent press coverage of Internal Revenue Service and U.S. Securities and Exchange Commission problems with executive travel on company aircraft makes continued use challenging. The known benefits of business-owned aircraft include security, privacy and efficiency, particularly in light of delays inherent in commercial travel. This newsletter describes in plain English the basic requirements and strategies for dealing with the myriad rules presented with respect to executive and guest travel on company aircraft, and recommends as a solution the adoption of a carefully drafted executive aircraft use policy.
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by Maureen O’Brien, Karen A. Simonsen and Adrienne Walker Porter
Pension plans use swaps to manage interest rate risks and other risks and to reduce volatility with respect to funding obligations. The Dodd-Frank Act established a comprehensive regulatory framework for swaps. The legislation was enacted to reduce risk, increase transparency and promote market integrity within the financial system, including the comprehensive regulation and required registration of swap dealers and major swap participants.
The Dodd-Frank Act has introduced new challenges in managing risks and liabilities of pension plans by subjecting ERISA plans to new requirements under the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). If pension plans are unable to use swaps, plan costs and funding volatility could rise sharply. This would undermine participants’ retirement security and would force employers to reserve, in the aggregate, billions of additional dollars to address increased funding volatility. In order to meet the rulemaking objectives specified under the Dodd-Frank Act, regulators and Congress have introduced significant changes that may impact how pension plans manage their funded status.
Plan sponsors should continue to monitor the regulatory and legislative activity surrounding pension plans’ ability to use [...]
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