Does your severance plan make the cut
Article Abstract:
The use of a severance package varies from company to company. Some firms consider it an extension of goodwill and offer it to all employees, while others use it to reward only those workers who have performed very well. There are also those companies that view severance packages as a means of avoiding lawsuits and therefore offer severance pay systematically in exchange for releases. Each of these approaches can be considered the right one as long as it is well planned and properly implemented. There are several issues that HR professionals must address while planning a severance policy. These include the company's objectives in offering this benefit, the employees who should be given severance pay, the amount that should be given and the circumstances under which employees are entitled to this benefit. The severance policy must be reviewed periodically to keep it abreast of changes in the business environment.
Publication Name: Personnel Journal
Subject: Human resources and labor relations
ISSN: 0031-5745
Year: 1995
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Don't make benefits promises your company can't keep
Article Abstract:
Lawyer Neal Schelberg explained how the Supreme Court arrived on a decision in the 'Varity v. Howe' case. He said the court had to determine if Varity representatives were acting as a plan administrator in their communication with employees. Under ERISA, the employer has a fiduciary responsibility to the plan participants and not to the corporate interests if it acts as the plan administrator. Schelberg stated that the court judged that information about the potential future of plan benefits and intentional representations about the future of benefits can be considered a fiduciary function of plan administration. Therefore, the Supreme Court allowed workers to sue for individual relief. The decision should highlight the value of truthful benefits communication and of ascertaining if an entity is communicating as an employer or a plan administrator.
Publication Name: Personnel Journal
Subject: Human resources and labor relations
ISSN: 0031-5745
Year: 1996
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