Business and Finance

Companies with 401(k) plans and their employees may have to wait a little longer to find out what they are paying for their plans.

The Labor Department may push back the April 1 deadline that 401(k) plan providers were given to comply with new rules about fee disclosures, according to several people who had spoken to officials at the department.

One reason for the delay is that the release of the final rule, on how providers will be required to disclose their fees to employers, has been delayed for months, and isn’t expected to be published until the end of January. The rule will apply to all service providers, including recordkeepers, financial advisers and fund companies that work with 401(k) plans.

The Labor Department has a “high degree of confidence” that it can issue the rule by the end of January, according to a person familiar with the matter, adding that the department was sympathetic to the industry’s concerns about the short deadline for complying with the rule and wanted to avoid “a chaotic adjustment period.”

For 401(k) plan sponsors and participants, the delay means waiting three more months to find out what they are paying for their plans. The point of the disclosures is so that employers and ultimately employees know exactly what it is they are paying for when they sign up for their 401(k) plans.

Critics argue that it isn’t transparent what fees employers and plan participants are paying because much of it is buried in prospectuses and similar documents. As it stands, companies that offer 401(k) plans as retirement savings vehicles for employees are supposed to have access to fee information by April 1. Participants would get fee disclosures by June 1.

But for 401(k) plan providers, a delay of a few months would provide time to clarify exactly what they need to do to comply with the regulation, officials at industry lobbying groups said.

“We are very happy to work with the Department of Labor on expanded fee disclosure, but we need to know what it is we are complying with,” said Lisa Bleier, managing director of the Securities Industry and Financial Markets Association, which represents hundreds of broker-dealers, banks and asset managers.

SIFMA wrote a letter to the Department of Labor on December 2 requesting a 12-to-18-month extension on the deadline from when the rule is finalized.

The Labor Department came out with the current version of the rule in July 2010 and gave providers 12 months to comply. After industry opposition, the agency extended the deadline to April 2012. With the final version of the rule still awaiting release, plan providers say they won’t have enough time to comply.

“The DOL needs to give us some breathing room,” said David Tittsworth, executive director of the Investment Adviser Association, a Washington, D.C.-based trade group. “Every day that goes by that you don’t have the new rule, it becomes more compelling to extend that time frame.”

Of particular concern for providers is whether the final rule will require them to provide a summary disclosure of all fees associated with the plan, on top of the actual fee disclosures. If so, providers also want guidance on the format that disclosure needs to take, said Craig Hoffman, general counsel for the Association of Pension Professionals and Actuaries.

“We are not opposed to the idea…, but we need sufficient time to implement it,” he said. ASPPA, in conjunction with the Council of Independent 401(k) Recordkeepers wrote a letter to the Department of Labor on December 19 asking for at least 12 months after the rule is finalized to comply with it.

” I would not be surprised if they came forward with an extension,” Hoffman said.

A Labor Department spokesman declined to comment.

A delay would also give plan providers more time before they face pressure to cut fees in the face of heightened competition as costs are put in the spotlight.

But sources familiar with the discussions at the Labor Department said providers should not expect a long delay on the deadline to comply with fee disclosures.

“The (department) is definitely flexible, but they do want it to happen this year,” said one person who had spoken to Labor Department officials.

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Regulators on Friday closed small banks in Florida and Arizona, boosting to 92 the number of bank failures in the U.S. this year.

The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 157 banks.

The Federal Deposit Insurance Corp. seized Premier Community Bank of the Emerald Coast, based in Crestview, Fla., with $126 million in assets and $112 million in deposits, and Phoenix-based Western National Bank, with $162.9 million in assets and $144.5 million in deposits.

Summit Bank, based in Panama City, Fla., agreed to assume the loans and other assets as well as the deposits of Premier Community Bank. In addition, the FDIC and Summit Bank agreed to share losses on $98 million of Premier Community Bank’s assets.

Washington Federal, based in Seattle, is acquiring the assets and deposits of Western National Bank.

The failure of Premier Community Bank of the Emerald Coast is expected to cost the deposit insurance fund $31.2 million; that of Western National Bank is expected to cost $37.6 million.

Florida has been one of the hardest-hit states for bank failures. Regulators closed 29 banks in Florida last year. The failure of Premier Community Bank brought to 13 the number of Florida lenders shut down this year

California, Georgia and Illinois also have seen large numbers of bank failures.

In all of 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.

In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2010, bank failures cost the fund $76.8 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC’s fund balance turned positive in the second quarter of this year; it stood at $7.8 billion as of Sept. 30.

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Asian stock markets rose Monday as investors cheered a new European fiscal pact aimed at fixing the region’s debt crisis and preventing a collapse of the euro currency.

Japan’s Nikkei 225 index jumped 1.5 percent to 8,665.76. South Korea’s Kospi added 1.2 percent to 1,896.35 and Hong Kong’s Hang Seng gained 1.6 percent to 18,874.22.

Under the deal reached Friday, all 17 countries that use the euro agreed to allow a central European authority to oversee their future budgets. They also agreed to automatic penalties if they spend too much.

In addition to tighter controls on spending, Europe’s new “fiscal compact” calls for the launch of a permanent bailout fund for euro nations in 2012, a year ahead of schedule. The deal also will send 200 billion euros ($267 billion) to the International Monetary Fund, which controls another emergency fund for countries in crisis.

But the deal won’t help cut debt today, which in Italy, Greece and Spain has driven government borrowing costs close to levels considered unsustainable installment payday loans. That loose end brought into focus the future monetary policy of the European Central Bank, and whether it would be willing to buy enough national bonds from troubled countries to keep interest rates down.

Analysts at Credit Agricole CIB said “the lack of ECB action in terms of stepping up to the plate as lender of the last resort” still weighed on investment sentiment.

There were also doubts about the willingness of each individual country to ratify the agreement.

Benchmark oil for January delivery was down 7 cents to $99.34 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.07 to finish at $99.41 per barrel on the Nymex on Friday.

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A Greek high court on Friday considered appeals against a deeply resented new property tax that has sparked anger across the country because those who don’t pay it will get their power turned off.

As the case was being heard, hundreds of protesters outside the Council of State in Athens chanted “We won’t pay!”

Inside, court President Panayiotis Pikramenos voiced reservations over the stakes at hand.

“The Council of State has undertaken a burden that is not its own,” he said, opening proceedings. “(The court) will do its duty, but cannot undertake to handle a political problem that has built up over the past few years.”

Greece’s debt-strapped government is seeking to raise some euro2 billion ($2.7 billion) with the new tax. It is among a raft of harsh cutbacks _ including pension and pay cuts and tax hikes _ imposed over the past 20 months to secure international rescue loans to keep the country afloat.

Fourteen appeals have been filed by bar associations, unions, lawyers and property owners. The court will reconvene Jan. 19, with parties submitting written positions and is expected to rule several weeks later.

The tax _ which is paid through household electricity bills _ has meet with strong resistance throughout the austerity-weary country. Several municipalities have urged their citizens not to pay, or threatened power suppliers with lawsuits if they disconnect clients who can’t afford the emergency levy.

Prime Minister Lucas Papademos insisted Friday the tax can’t be scrapped as it will provide the state coffers with vital revenues guaranteed approval cash advance loans.

He told Parliament that his interim coalition government will ease payment terms for disadvantaged householders, including long-term jobless, in a country where unemployment has risen to record levels amid a deep recession.

“I too do not consider it right for citizens who objectively cannot pay the property levy to have their power cut off,” Papademos said. “I believe these arrangements will address many of the issues that have arisen. But the measure itself cannot be abolished, as it is necessary for our process of fiscal adjustment.”

Later Friday, lawmakers will start debating the 2012 austerity budget, which seeks to reduce government overspending to 5.4 percent of annual output _ from an estimated 9 percent this year.

Next year’s figure factors in 50 percent writedowns on the value of Greek bonds held by private creditors as part of a second international bailout for Greece, after a first euro110 billion ($148 billion) deal in May 2010 proved insufficient.

Former central banker Papademos was appointed last month to head a coalition government to push through financial reforms. The interim government is expected to call early elections in late February.

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The judge overseeing the bankruptcy of collapsed MF Global Inc. has approved the release of about $520 million to trading customers of the brokerage firm whose accounts have been frozen since Oct. 31.

U.S. Bankruptcy Judge Martin Glenn issued an order Thursday granting the request of the court-appointed trustee that 60 percent of the funds in about 23,300 cash-only accounts be returned to customers.

The money could start moving to customers before Thanksgiving, a spokesman for the trustee says. The complex process of combing through about 38,400 frozen accounts holding some $5.4 billion to verify balances has taken longer than planned.

Trustee James Giddens hopes to eventually have 100 percent of all funds returned in the coming weeks. –

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Two European Union leaders have called on the upcoming G-20 summit of wealthy and developing countries to build on EU plans to stabilize the debt-burdened eurozone and further boost the global recovery.

EU Council President Herman Van Rompuy and Commission President Jose Manuel Barroso wrote in a letter to G-20 leaders that there was “continued need for joint action” to get the world economy back on track.

A three-pronged deal reached last Thursday by the EU appears to have met expectations for some kind of major action, and stock markets rallied in Europe and around the world in response. The EU plan retools the eurozone’s underpowered bailout fund, calls on banks to take 50 percent losses on Greek bonds, and orders them to raise euro106 billion ($150 billion) in new capital by June.

The buoyant mood could be shortlived if G-20 leaders do not use their summit in Cannes, France, on Thursday and Friday to build on those achievements, the two leaders said in their letter payday loans online.

“Whilst we in Europe will play our part, this cannot alone ensure global recovery and rebalanced growth. There is a continued need for joint action by all G20 partners,” the letter, sent out on Saturday, said.

“More needs to be done at the global level. Many of the distortions underlying the large pre-crisis imbalances are still to be addressed,” the two warned.

U.S. President Barack Obama has already said the European plan to tackle the its debt crisis would have an impact on the U.S. economy, but stopped short of saying whether it would be enough to prevent another global recession.

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A spat involving Safeway and Hawaii coffee growers is still brewing, even after the supermarket giant agreed to change labeling on its Kona blend coffee.

A $5 million class-action lawsuit was filed in federal court in Northern California claiming Safeway profited off the reputation of Kona coffee while selling an inferior product with very little Hawaii-grown coffee.

The lawsuit was filed Aug. 30, a day before Safeway’s letter informing the Kona Coffee Farmers Association the company would change its packaging to reflect the percentage of Kona it contains. The farmers had called for a boycott of Safeway’s 1,700 stores nationwide after a farmer saw the Kona blend for sale in a California store.

In an effort to protect a world-famous Hawaii product, the state’s Board of Agriculture Chairman Russell Kokubun sent a letter to Safeway officials asking them to comply with a law here requiring labels to specify the percentage of Hawaii-grown coffee included in the blend. The law requires those blends have at least 10 percent Hawaii-grown coffee. But because Safeway’s Kona blend isn’t sold in any of the 19 Hawaii locations, Kokubun could only ask for voluntary compliance.

The farmers’ battle inspired the class-action lawsuit, said Janet Lindner Spielberg, a Los Angeles attorney representing the plaintiffs.

“It affects their livelihoods and how their product is viewed in the world,” she said in a phone interview with The Associated Press on Thursday.

Coffee drinker Chanee Thurston, of Benicia, Calif., is the only plaintiff named in the lawsuit, which is also on behalf of consumers who purchased the Safeway Select Kona Blend since Aug. 30, 2007. According to the complaint, Thurston bought the coffee believing it “was comprised largely or entirely of high quality coffee beans from the Kona region of Hawaii and relied on these representations in making her purchases.”

She paid more money for the Kona blend than she would have for other similar coffee products made up of a large amount of non-Kona beans.

“They’re really using the reputation of Kona beans. They’re using it to sell something that’s essentially an inferior product,” Spielberg said.

A Safeway spokeswoman said Thursday the company doesn’t comment on pending litigation.

Hawaii is the only place in the United States where coffee is grown. Coffee aficionados pay a premium for coffee grown in farms in the Kona district, known for its rich volcanic soil and tropical climate.

Spielberg said the lawsuit won’t be dropped despite Safeway agreeing to change the label.

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A strong earnings report from CIBC (TSX: CM) helped push the Toronto stock market higher Wednesday while investors largely shrugged off data showing the Canadian economy hit the brakes in the second quarter.

The S&P/TSX composite index gained 83.18 points to 12,717.89 while the TSX Venture Exchange added 7.63 points to 1,810.39.

New York indexes also advanced as investors took in a snapshot of August job creation with the Dow Jones industrial average ahead 43.36 points to 11,603.31.

The Nasdaq composite index shed early gains and was down 2.81 points to 2,573.3 while the S&P 500 index climbed 5.4 points to 1,218.32.

Statistics Canada reported that gross domestic product declined by 0.1 per cent, which followed a 0.9 per cent increase in the January-March period.

The agency said the drop in GDP was largely a result of a 2.1 per cent drop in exports. Real GDP in the second quarter declined 0.4 per cent on an annualized basis after expanding 3.6 per cent in the first quarter.

The Canadian dollar rose 0.03 of a cent to 102.26 cents US as the data also showed that June GDP rose at a better than expected 0.2 per cent, versus the 0.1 per cent gain that economists expected.

Bank of America Corp. is selling half of its stake in China Construction Bank Corp. to raise cash and shore up its capital base.

The nation’s largest bank by assets said Monday that it will sell 13.1 billion shares in the Chinese bank for $8.3 billion to a group of investors it declined to name. The sale will generate a gain of $3.3 billion for Bank of America.

The news came four days after the bank got a $5 billion investment from Warren Buffett’s Berkshire Hathaway Inc., which provided a big boost to Bank of America’s battered stock. The billionaire made investments in other major companies such as Goldman Sachs Group Inc., helping restore confidence in them when they were out of favor.

After the sale, Bank of America will own about 5 percent of China Construction Bank. It currently owns about 10 percent.

The sale is the bank’s latest move to increase its capital base to comply with new international regulations created following the global meltdown. The rules require big financial institutions to hold more cash.

Finance Chief Bruce Thompson said the bank raised about $5.8 billion in August. That comes on top of cash and cash-equivalent securities of $402 billion at the end of second quarter.

The bank has faced many problems stemming from its 2008 purchase of the nation’s largest mortgage lender, Countrywide Financial Corp paperless payday loans., as well as other issues. Bank of America has lost $15.3 billion in the last four quarters. Its revenue fell 34 percent in the first half of 2011 compared with last year after new regulations cut into the fees it collects.

Settlement objection

Also Monday, the Federal Deposit Insurance Corp. objected to Bank of America Corp.’s proposed $8.5 billion mortgage-bond settlement with investors, joining investors and states that are challenging the agreement.

The FDIC owns securities covered by the settlement and says it doesn’t have enough information to evaluate the accord, according to a filing in federal court in Manhattan.

Bank of America has agreed to pay $8.5 billion to resolve claims from investors in Countrywide Financial mortgage bonds. The settlement was negotiated with a group of institutional investors and would apply to investors outside that group.

A New York state judge was scheduled to consider approving the settlement in November.

Bloomberg News contributed to this report

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Six years ago Gail Vaz-Oxlade was burnt out and not keen on returning to work. But she couldn