The Markets November 4, 2009

Tribune to Terminate ESOP

In a memo to Tribune Co. employees announcing a new retirement plan, Chief Administrative Officer Gerry Spector said the company's employee stock ownership plan (ESOP) likely will be terminated when the Chicago-based media conglomerate emerges from bankruptcy.

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According to the Chicago Tribune, the memo said the company will set up a new 401(k) plan that will provide a 4% match for employee contributions of up to 6% of pay. The company also said it will institute a profit-sharing plan with a discretionary contribution that will “maintain a connection between company profitability and employee incentives.”

The newspaper said the announcement answers the question of whether employees would end up getting a piece of the reorganized company, and that eliminating the plan suggests that Tribune Co. management and the company’s creditors decided that the complexity of keeping the ESOP in place was more costly than paying taxes.

However, the U.S. Department of Labor has been examining aspects of the ESOP under provisions in the Employee Retirement Income Security Act (see “DoL Subpoenas Tribune on ESOP“). The stock plan was an important piece of real estate mogul Sam Zell’s plan to acquire the company in an $8.2 billion deal that involved $13 billion in debt.

Products November 4, 2009

SEI Enhances Technology Offering for Advisers

SEI Advisor Network’s new Service Delivery Initiative aims to help advisers with electronic proposal generation, statement and account level reporting, and transaction automation.

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SEI said the enhancements create efficiencies that allow advisers to focus on building client relationships and increasing revenues at a time when many firms have been forced to cut expenses. The initiative was created based on feedback from SEI advisers.

As part of the new enhancements, SEI Proposal System v5.0 streamlines the proposal generation process, allowing advisers to develop and deliver professional client proposals within minutes, according to SEI. The system includes an upgraded client profiling function that incorporates criteria such as risk profiles and goal information.

SEI has also upgraded statements and performance reporting for investors, combining information and articulating “progress to goals” in a more investor-friendly format, the firm said. “This gives investors a better gauge on how they are doing relative to their goals compared to just traditional market indices as benchmarks,” the firm said.

Furthermore, SEI expanded online transaction capabilities through the Advisor Transaction Portal, focusing on improved workflows and broker/dealer approvals across multiple types of transactions.

SEI has already begun to implement many of the enhancements and plans a phased roll-out to its entire client base through the first quarter of 2010.

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