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6th Circuit Reverses Trial Court?ÇÖs ?Ç£Mechanical Application?Ç¥ of Statutory Pre-Judgment Interest Rate Applied to Pension Benefit Award

The U.S. Court of Appeals for the Sixth Circuit recently affirmed a trial court?ÇÖs award of more than $3 million in unpaid pension benefits but reversed the trial court?ÇÖs award of pre-judgment interest at the statutory rate. The Sixth Circuit agreed that a class of plaintiffs?ÇÖ claims for unpaid pension benefits were not precluded by their execution of severance agreements, which included a release of claims, because the claims allegedly released (i.e., lump sum benefit calculations) had not yet accrued at the time the severance agreements were signed, since lump sums were not yet available for those who signed the releases, and because there was no mention in the releases of future pension or ERISA claims. The circuit court held that its ruling was consistent with the law that waivers of future ERISA violations are unenforceable. Nevertheless, the Sixth Circuit reversed the trial court?ÇÖs application of the statutory pre-judgment interest… Continue Reading

IASB Proposed Amendment to IAS 19: Accounting for Employee Contributions to a Defined Benefit Plan

The International Accounting Standards Board (?Ç£IASB?Ç¥) recently proposed amending IAS 19 to address the proper method of accounting for contributions from employees or third parties to a defined benefit plan when such contributions are required by the defined benefit plan?ÇÖs terms. The amendment is intended to clarify when an employer can recognize such contributions as a reduction in its short-term employee benefits costs instead of a reduction in its post-employment benefits costs. The proposed amendment would permit an employer to recognize the contributions as a reduction in its short-term employee benefits costs in the same period in which the benefits are payable if, and only if, the contributions are linked solely to the employee?ÇÖs services rendered during that period, for example, employee contributions based on a fixed percentage of the employee?ÇÖs salary regardless of the employee?ÇÖs years of service to the employer. Interested parties may submit comments to IASB through… Continue Reading

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