Insurance Broker Willis Suspends 401(k) Match, Freezes Pension

Global insurance broker Willis Group holdings has put its 401(k) match on hold for 2009.

The company said the move helped its first quarter of 2009 by $3 million, and is expected to show a $9 million assist to the full year’s results.

According to a Securities and Exchange Commission regulatory filing, Willis has also announced plans to freeze its U.S. defined benefit plan to future accruals as of mid-May 2009.

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From that move, Willis said it will recognize a $12 million second-quarter gain, and that it anticipates its full-year charge for the plan will be about $9 million, compared to an expected $39 million without the plan freeze, according to the filing.

“In first quarter 2009, the benefit of a stabilization in rates in the reinsurance market was more than offset by the continuing soft market in other sectors and the adverse impact of the weakened economic environment across the globe,” Willis said in the SEC document. “Our North American operations have been particularly impacted by the weakened economic environment and we have seen sharp first quarter 2009 declines in revenues from our US construction business, as many projects are postponed or cancelled. “

Schapiro Plans to Increase SEC Enforcement

Chairman Mary Schapiro today outlined new plans for enforcement of the Securities and Exchange Commission (SEC).

Speaking at the annual gathering of the Investment Company Institute (ICI), Schapiro said a new system of financial regulation must accommodate “lively competition for capital’ while also protecting individual well-being.

In a time when the SEC has been criticized for not spotting financial fraud such as the Madoff Ponzi scheme earlier, Schapiro noted the importance of investor trust in financial intermediaries. “They must be able to trust that those intermediaries deal with them honestly and fairly and with investors’ well-being as their sole goal,’ she said

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Outline for New System

Schapiro said the new system should include:

  • an entity responsible for the regulation of the markets for investment capital
  • an entity or entities responsible for regulating banking institutions
  • an entity responsible for monitoring and averting risks to the financial system as a whole
  • an entity responsible for resolution of troubled institutions.

Those proposals are based on principles of protecting investors and institutions, Schapiro said. “Though we are not, as some would have you believe, focused solely or even primarily on retail transactions, and we regulate institutions and markets, our focus has been and must remain on how our actions benefit the workers, savers, and investors of the United States,’ Schapiro said.

She added that regulation should help facilitate fair and efficient trade but not supplant the markets. “Events of the last year provide a brutal reminder that markets are neither self-regulating nor self-correcting,’ she said. “A strong and steady regulatory hand is needed to assure their continued survival. But that hand must not be so intrusive as to point to winners and losers, lest we lose the benefits of competition.’

Schapiro also noted the importance of transparency: “Any new regulatory structure must preserve the integrity and independence of those charged with the responsibility for setting standards of financial disclosure.’

The full speech is available here.


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