Deals & People April 15, 2009

UBS Plans More Cuts for 2009

UBS announced at its annual general meeting that the firm will slash more than 11% of its workforce, but it’s not yet clear what that means for financial advisers.
Reported by

TheWall Street Journal reported that the layoffs are aimed primarily at back-office and middle-office areas such as IT, “though employees with client contact also won’t be spared.’

In addition to staffing cuts, UBS also wants to scale back marketing, sponsorship, consultants, and some of its employee perks, The WSJ reported.

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UBS expects to reduce the number of its employees to about 67,500 in 2010, according to a news release about the meeting in Switzerland. At the end of March, UBS employed 76,200 people in over 50 countries.

Group CEO Oswald Grübel said UBS will report a loss attributable to shareholders of almost CHF 2 billion in first quarter 2009, according to the release. However, he said, thanks to a further reduction of its balance sheet and risk-weighted assets, UBS, expects to have a tier 1 capital ratio of roughly 10% at the end of March 2009.

Nevertheless, in order to adapt its size to the changed market conditions and lower levels of business, UBS is planning cost savings by the end of 2010 of approximately CHF 3.5 to 4 billion compared to 2008 levels, he said.

Grübel said UBS will maintain its core business—international wealth management and the Swiss banking business—alongside its global expertise in investment banking and asset management, and will exit high-risk and unpromising businesses.

The bank is currently conducting a review to make clear decisions about which businesses it will remain active in and grow, and which it will exit, he said.

Last week, UBS announced its plans to lay off lower-producing advisers, and last month the bank announced it would sell off some of its wealth-management branches (see “Stifel Nicolaus to Acquire up to 55 Branches from UBS“). Reports have speculated that UBS has tried unsuccessfully to sell of its U.S. wealth management business (see “UBS To Let Go Lower Producers’).

The full speeches given at the meeting are available at www.ubs.com/agm.

Products April 15, 2009

Principal Offers 403(b) Sponsors a Chance to Practice

They say that practice makes perfect--and for non-profit employers that sponsor 403(b) retirement plans, Principal Financial Group is offering to give them a chance to "practice."
Reported by
In 2010, 403(b) plan sponsors will face rigorous new reporting requirements including submitting a full Form 5500 and, for larger plans, an independent plan audit. The Principal Financial Group is offering to give them a practice run by sending expanded Form 5500 packets now, along with life count and audit packages, to make the transition to the new reporting requirements easier.
The Principal is providing 403(b) plan sponsors with:
  • 2008 Life Count Package: helps determine if plan is large enough to require an audit and needed for the full Form 5500;
  • Audit Package: gives the plan sponsor a snapshot of the data we provide to help them with future audits including financial information necessary for a limited scope audit;
  • Form 5500 Sample Packet: helps familiarize plan sponsors with the type of information they will need to verify and what missing data they will need to provide for a full Form 5500 report.
These reports are just part of a comprehensive set of tools from The Principal to help plan sponsors get a head start in meeting several new reporting requirements. According to an announcement, other tools include:
  • a white paper: “The Road to Transparency: Form 5500 Annual Reporting, 403(b) Plans and Fair Value Measurements (FAS 157);”
  • a Form 5500 Quick Reference Guide;
  • a review of Value and Reporting of Retirement Plan Assets—FAS No. 157;
  • a “plain language’ fiduciary handbook: “Understanding and Managing Fiduciary Responsibility.”
“For the first time, ERISA 403(b) plan sponsors will face the same financial reporting and auditing requirements as 401(k) plans,” said Aaron Friedman, national non-profit practice leader for The Principal, in the announcement. “We’re helping them ease into the hefty new reporting requirements by providing financial data and reports a year in advance, along with user friendly directions. They will have a clear picture of what data they will need to collect and how to report it when the time comes.”

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