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.

Read more

In a Dec. 30 story about iceberg lettuce being removed from grocery stores after salmonella was found in an Arizona field adjacent to the grower’s property, The Associated Press, relying on information from Kroger and its affiliated Smith’s Food and Drug, erroneously reported the lettuce had been removed from stores in North Carolina, among at least six other states. Kroger said Saturday the product never made it to its North Carolina stores.

Source

Japan

+%3Cp%3EA+Swiss+panel+from+the+government+and+the+central+bank+is+examining+options+such+as+capital+controls+and+negative+interest+rates+to+curb+the+franc%92s+strength%2C+Finance+Minister+Eveline+Widmer-Schlumpf+said.+%3C%2Fp%3E+%3Cp%3E%93If+the+situation+deteriorated+further+in+the+foreign-+exchange+markets%2C+we+would+have+the+opportunity+to+take+certain+accompanying+measures%2C%94+Widmer-Schlumpf+said+at+a+hearing+in+parliament%92s+lower+house+in+Bern+yesterday.+Among+the+steps+being+considered+are+negative+interest+rates%2C+a+levy+on+transactions+and+restrictions+on+the+movement+of+Swiss+and+foreign+currencies.+The+panel+is+also+looking+at+restrictions%2C+including+a+possible+ban%2C+on+foreigners+buying+Swiss+real+estate.+%3C%2Fp%3E+%3Cp%3EThe+Swiss+franc+has+appreciated+to+record+levels+against+the+euro+over+the+last+year%2C+raising+the+risk+of+deflation+and+threatening+exports.+That+prompted+the+country%92s+central+bank+to+impose+a+limit+of+1.20+francs+per+euro+in+September+and+the+government+to+lower+its+forecast+for+next+year%92s+economic+growth.+Basel%2C+Switzerland-based+freight+forwarder+Panalpina+Welttransport+Holding+AG+said+last+month+the+franc%92s+strength+had+a+%93significant%94+effect+on+its+results.+%3C%2Fp%3E+%91Don%92t+Want+To%92++%3Cp%3E%93I+would+like+to+emphasize+that+we+don%92t+want+to+implement+these+measures%2C%94+Widmer-Schlumpf+said+%3Ca+href%3D%22http%3A%2F%2Fpaydayloans-on.com%22%3Ecash+till+payday%3C%2Fa%3E%3C%21–+.+–%3E.+They+%93are+being+examined+so+that%2C+in+case+of+need%2C+everything+has+been+considered+and+we+can+make+suggestions.%94+%3C%2Fp%3E+%3Cp%3EThe+finance+minister+has+made+similar+statements+in+the+past.+On+Dec.+7%2C+she+said+at+a+hearing+in+the+parliament%92s+upper+house+that+capital+controls+and+negative+interest+rates+%93are+issues+which+are+being+examined.%94+%3C%2Fp%3E+%3Cp%3EThe+task+force+consists+of+officials+from+the+Swiss+finance+ministry%2C+the+economy+ministry+and+the+Swiss+National+Bank%2C+the+finance+minister+said.+%3C%2Fp%3E+%3Cp%3EThe+Swiss+franc+remains+%93massively+overvalued%94+and+should+continue+to+weaken%2C+Economy+Minister+Johann+Schneider-Ammann+said+at+yesterday%92s+hearing.+%3C%2Fp%3E+%3Cp%3EHe+also+called+the+Swiss+central+bank%92s+franc+ceiling+of+1.20+versus+the+euro+a+%93necessary%94+measure.+%3C%2Fp%3E+%3Cp%3E%93The+purchasing+power+parity+is+at+1.35%2C+1.40%2C%94+Schneider-Ammann+added.+It+would+be+desirable+for+the+exchange+rate+to+%93move+into+this+direction+sooner+rather+than+later.%94+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2011-12-21%2Fswiss-panel-studying-measures-to-curb-franc-s-gains-widmer-schlumpf-says.html%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+

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.

Source

European markets were little changed Thursday after the European Central Bank delivered another interest rate cut before a crucial summit of European Union leaders that could determine whether the euro currency survives or not.

The decision by the European Central Bank to reduce its main interest rate by a quarter of a percentage point to 1 percent was expected and investors will be looking to see if its new ECB President Mario Draghi hints at further cuts in the months ahead amid growing signs of a recession in the 17-country eurozone.

“Expectation is growing that the ECB may look to cut its main policy rate below the current record low of 1 percent in coming months if the economic situation continues to deteriorate,” said Chris Williamson, an analyst at Markit.

In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 5,562 while Germany’s DAX rose 0.2 percent to 6,043. The CAC-40 in France was 0.3 percent lower at 3,164. The euro was 0.2 percent higher at $1.3417.

Wall Street was poised for modest gains on the open _ Dow futures were up 0.1 percent at 12,231 while the broader Standard & Poor’s 500 futures rose 0.1 percent to 1,265.

Traders were looking to Draghi’s press conference later Thursday to see what he says about the bank’s limited bond-buying program.

Draghi has said the central bank is ready to do more to support bond markets provided that European politicians agree to closer budget controls among the 17 countries that use the euro. Germany and France have proposed a plan on closer fiscal unity that will dominate debate at Friday’s EU summit.

Investors hope if European governments can agree to tighter spending oversight, the ECB will step up its support for the bond markets. It currently buys bonds in the markets, but only reluctantly, and in small quantities.

“The ECB has made it clear that the sequencing of events is all-important, a hint that if the EU takes a significant step towards more fiscal discipline then it will continue to support the market in size and maybe in words as well,” said Gary Jenkins, an analyst at Evolution Securities.

“Let’s hope what is decided is enough to keep the ECB satisfied, so that it keeps up its support for markets,” he added same day payday loans.

Hopes that Europe was finally readying a decisive plan to deal with its crippling debt crisis had helped stocks rise over the past couple of weeks, as well as pushing the borrowing rates of countries like Italy down to more manageable levels.

The ten-year yield on Italy’s bonds is currently trading around the 6 percent mark, down on the 7 percent level that it traded at as recently as last week. Borrowing rates of over 7 percent are considered unsustainable and eventually caused Greece, Ireland and Portugal to seek financial bailouts.

The French-German proposal to enshrine tougher budget rules in European treaties is being met with resistance by the European Council, an institution that defines the priorities of the entire 27-nation EU. Its president, Herman Van Rompuy, favors a simpler route _ amending existing rules that apply to the 17 euro countries to avoid the trickier step of requiring every country to approve the new treaty.

The potential for disagreement at the summit weighed on Asian stocks earlier as it had done in Europe and the U.S. on Wednesday.

Japan’s Nikkei 225 fell 0.7 percent to 8,664.58, dragged down by weaker-than-expected machinery orders. South Korea’s Kospi lost 0.4 percent to 1,912.39 and Hong Kong’s Hang Seng shed 0.7 percent to 19,107.81.

But mainland Chinese shares rose, with the benchmark Shanghai Composite Index gaining 0.1 percent to 2,329.82 after losing more than 1 percent earlier in the day to approach an intraday low for the year. The Shenzhen Composite Index gained 0.1 percent to 970.95.

Oil prices rose modestly in line with the modest advance in Europe _ benchmark oil for January delivery was up 38 cents to $100.87 a barrel in electronic trading on the New York Mercantile Exchange

____

Pamela Sampson in Bangkok contributed to this report.

Source

Stocks soared in morning trading Wednesday after major central banks acted together to support the global financial system by cutting short-term borrowing rates.

The Dow Jones industrial average jumped more than 400 points in early trading Wednesday, and was up 392 hour after the opening bell.

Markets in Europe also surged. Germany’s DAX index jumped 4.9 percent. The euro and commodities prices rose sharply. U.S. Treasury prices fell as demand weakened for ultra-safe assets.

The central banks of Europe, the U.S., Britain, Canada, Japan and Switzerland eased banks’ access to dollars by reducing their borrowing rates. They were responding to fears that a European country will default, touching off a credit crunch similar to what followed the 2008 collapse of Lehman Brothers.

Borrowing rates for European nations have skyrocketed on concerns that the European debt crisis has engulfed nations such as Italy which are too big to bail out. Borrowing rates for Italy, Spain and others have soared.

Banks need dollars to fund their daily operations. Their access dried up as U.S. money market funds reduced their lending to European banks.

The central banks’ action takes some pressure off the financial system, which has signaled in recent days that banks are losing faith in their trading partners. Banks need to trust each other to maintain healthy flows of credit and keep the system working.

The Dow Jones industrial average leaped 392 points, or 3.4 percent, to 11,948 at 10:20 a.m. Over the past three days the Dow has gained back all of the 564-point loss it had over Thanksgiving week.

The Standard & Poor’s 500 index jumped 39, or 3.2 percent, to 1,234. The Nasdaq composite index gained 78, or 3.1 percent, to 2,594.

The move by central banks does not address the fundamental problem posed by heavily indebted European nations. European finance ministers in Brussels have been meeting since Tuesday but have failed to deliver a clearer sense of how the currency union will proceed.

Investor sentiment was also lifted by China’s move to reduce bank reserve levels Wednesday to release money for lending and help shore up slowing growth. Higher growth in China could be crucial for a global economy that’s suffering in the wake of European debt crisis.

Beijing announced that the amount of money China’s commercial lenders must hold in reserve will be cut by 0.5 percent of their deposits, effective Dec. 5. It was the first easing of monetary policy in three years and analysts are expecting more.

Source

A judge on Monday used unusually harsh language to strike down a $285 million settlement between Citigroup and the Securities and Exchange Commission over toxic mortgage securities, saying he couldn’t tell whether the deal was fair and criticizing regulators for hiding the details of the firm’s wrongdoing from the public.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given “any proven or admitted facts upon which to exercise even a modest degree of independent judgment.”

The SEC replied in a statement issued by enforcement director Robert Khuzami, saying the deal “reasonably reflects the scope of relief that would be obtained after a successful trial.”

The SEC had accused the bank of betting against a complex mortgage investment in 2007

A safety investigation of the lithium-ion batteries in General Motors Co.’s Chevrolet Volt is under way to assess the risk of fire in the electric car after a serious crash, the National Highway Traffic Safety Administration said Friday.

One Volt battery pack that was being closely monitored following a government crash test caught fire Thursday, the safety administration said in a statement. Another crash-tested battery emitted smoke and sparks, the statement said.

GM, which was informed of the investigation on Friday, said in a statement that the Volt “is safe and does not present undue risk as part of normal operation or immediately after a severe crash.”

The fires are in addition to a battery fire in a crash-tested Volt six months ago.

NHTSA learned of a possible fire risk involving damaged Volt batteries in June when a fire erupted in a Volt that was being stored in a parking lot a test facility in Burlington, Wis. The fire was severe enough to cause several other vehicles parked nearby to catch fire as well.

The car had been subjected to a side-impact crash test more than three weeks earlier, on May 12, during which the battery was damaged and its coolant line ruptured.

Last week’s tests of three battery packs were designed to replicate the May test. In that test, the Volt was subjected to a simulated side-impact collision into a narrow object like a tree or pole followed by a rollover, the agency said.

The first battery tested last week didn’t catch fire. But a battery test on Nov. 17 initially experienced a temporary temperature increase, and on Thursday caught fire. Another battery tested on Nov. 18, which was rotated 180 degrees within hours after the test, began to smoke and emit sparks shortly after the rotation payday advance online.

The tests were conducted by NHTSA and the Energy and Defense departments at a defense facility near Hampton Roads, Va.

So far, no fires have been reported in Volts involved in roadway crashes, NHTSA said. More than 5,000 of the vehicles have been sold.

It’s too soon to tell whether the investigation will lead to a recall of any vehicles or parts, but the government will ensure consumers are informed promptly if that occurs, the agency said.

With electronic safety systems that are part of the car, “GM knows real time about any crash significant enough to potentially compromise battery integrity,” the automaker said. “Since July, GM has implemented a post-crash protocol that includes the depowering of the battery after a severe crash, returning the battery to a safe and low-powered state.”

Electric vehicles are critical to President Barack Obama’s plans to reduce U.S. dependence on foreign oil. He has called for putting 1 million of the vehicles on the road by 2015.

Safety testing hasn’t raised concerns about electric vehicles other than the Volt, NHTSA said.

“NHTSA continues to believe that electric vehicles have incredible potential to save consumers money at the pump, help protect the environment, create jobs and strengthen national security by reducing our dependence on oil,” the agency said.

Source

Industry analysts and anxious travelers expressed fears Tuesday for the survival of Britain’s venerable tour operator Thomas Cook, after the company, which took more than 22 million people on holidays in the latest year, revealed its financial problems had worsened.

Shares in Europe’s second-largest tour operator lost three-fourths of their already depressed value after the company said it was seeking new agreements with its main creditors, barely a month after announcing it had negotiated new funding arrangements to carry it through the slow winter months.

The company insisted flights would leave as usual and that it was taking new bookings, but Britons who have bought holidays through the firm were worried.

Jamila Juma-Ware, 27, who has booked a holiday at Spain’s Tenerife island in the next three weeks for herself and her mother, said she was “praying it’s going to be all right … but I’m not confident.”

Several small British travel firms have gone under since the global economic crisis hit in 2008, but Thomas Cook is an industry giant and a fixture of Britain’s main streets.

“There are a lot of small independent travel agents around here, but I said I’d rather just book it through someone like Thomas Cook because they’re big and there’s more of a guarantee they won’t go bust,” Juma-Ware said. “And then this week this happens.”

Thomas Cook is, like many airlines and tour operators, suffering from weak consumer demand as Europe’s financial crisis has people worried about their jobs.

Unrest in Egypt and in Tunisia _ normally the top winter destination for French travelers _ flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.

Analysts said the financial troubles could scare away customers, darkening the company’s prospects.

“Legitimate questions will be asked as to whether Thomas Cook can survive long-term,” said James Hollins, analyst at Evolution Securities. He added that he believes the company could pull through on the strength of businesses outside Britain, but “a more flexible financial structure and massive turnaround are required.”

Thomas Cook Group PLC shares were down almost 75 percent at 10.41 pence in afternoon trading in London. On July 1, shares had closed at 134.5 pence.

Thomas Cook was due to report annual earnings for 2010-11 on Thursday, but it has put that off indefinitely “as a result of deterioration of trading in some areas of the business, and of its cash and liquidity position since its year end.”

Sam Weihagen, Thomas Cook’s interim chief executive, insisted it was business as usual: “Flights are leaving on schedule, shops are open and we’re taking bookings.”

Weihagen said people who book package holidays will be protected by the Air Travel Organizers’ Licensing insurance program which is funded by contributions from travel companies. However, those who book only flights are advised to buy their own travel insurance.

The group has previously announced plans to reduce its fleet of 41 aircraft to 35, and it hopes to raise 200 million pounds ($312 million) by selling assets, including its stake in Britain’s part-privatized air traffic control service.

Wyn Ellis, analyst at Numis Securities, said Thomas Cook’s announcement could frighten new customers and alarm suppliers. The company, he said, “faces a difficult near-term future which could lead to significant loss of market share.”

The news of the company’s problems upset some prospective travelers near its shop in the St. James neighborhood of London on Tuesday.

Tony Wright, 64, said he’s had “nothing but good experiences” with the brand and would not hesitate to use Thomas Cook again. “We were devastated to hear the news this morning and we hope it’s not as bad as it sounds,” he said.

Others were disappointed the airfares had not dropped.

On Tuesday, Simon Ash visited the branch hopeful that the combination of the company’s financial woes and a lack of tourist interest in Egypt because of rioting there could help him find a cheap ticket to Cairo _ but he could not find one. “The prices they’re giving me are not as good as the ones I’m finding on the Internet,” he said.

Thomas Cook takes its name from the cabinetmaker Thomas Cook, who had a flash of inspiration while walking to a temperance meeting in 1841 to use the railways to help promote abstinence from alcohol. Cook’s first venture was to charter a train which carried about 500 passengers in open coaches on a 12-mile round trip.

“Thus was struck the keynote of my excursions, and the social idea grew up on me,” Cook later recorded.

He organized more trips for temperance societies and Sunday schools. He took his business a step further in 1845 by arranging a trip to Liverpool, which included a 60-page booklet in the price of the ticket.

The International Exhibition in Paris in 1855 inspired Cook to organize a trip to the continent. Ten years later, he was organizing railway tours in North America.

Source