Incoming owner has to honor benefit packages already given

By Patricia Hunt Sinacole | August 20, 2006

My 3,000-plus-employee international company is being sold . There is uncertainty regarding the continuation of benefits, especially the retirement benefits. What are the legal obligations of the new owner-to-be to honor retirement contracts (pension funds, 401(k)? Does this change in any way if the future owner is a US- or a foreign-based entity?

This is a complicated question so I consulted an ERISA and benefits lawyer, Thomas R. Kolb at Kolb and Associates of Framingham. According to Kolb, the acquiring company is under no obligation to provide pension benefits in the future (after it closes the deal), but federal law requires it to honor all pension commitments made in the past.

In some situations, the new employer may continue providing comparable benefits . If a union contract is in place, any change could violate the collective bargaining agreement. Further, if the new parent company has other US operations to which it already provides pension benefits, the law restricts how different the benefits can be for the new subsidiary's employees.

Kolb also counsels that being a foreign-based company doesn't excuse an acquiring company from compliance with US pension law. The key question isn't where the new parent company is based -- it is whether they have other US operations. If they do, the law will require that the benefits for the newly acquired subsidiary demonstrate a minimum level of comparability with the benefits for existing US-based employees.

Acquiring companies can take advantage of a transition rule that allows them to maintain the predecessor's plan, in its current configuration, for up to two years after the closing of the deal. The acquired plan may be more generous than the parent company anticipated, but electing this rule has two main advantages to the employer: During the transition period, the acquired plan automatically complies with applicable non discrimination requirements and the parent company buys time to consider how best to dovetail benefits for its newly acquired subsidiary with those provided to other US-based employees.

Jeff Tyrakowski, a partner at ETBenefits Insurance Agency LLC of Quincy, offers some additional insight. ``Buyers are often concerned about outstanding pension obligations -- whether they are underfunded and creating a liability, thus lessening the value of the purchase -- or overfunded, thus providing a windfall," he said.

Tyrakowski suggests some questions to ask of your employer: When will the plan be frozen, if at all? Will balances be rolled over to a new plan or left in place? Who is the administrator of the plan (if there is a change)? How will an outstanding loan be handled? Will my current payroll deductions continue? What are the new plan options if a new plan is offered?

My friend has falsified a high school diploma. My question is, do all companies do a background check and verify if applicants graduated high school?

Falsifying a diploma or degree for employment purposes is never a good idea. Many, but not all employers conduct background investigations, which may include an academic record verification. If you look carefully at some employment applications, the small print may specify what type of background investigation will be conducted on applicants. In some industries and in some occupations, a background investigation is required.

Additionally, there is nothing to prevent an employer from disciplining (and even terminating) an employee for providing misinformation on an employment application even after the employee has been hired.

A background investigation can delve into a number of areas. It may include a pre-employment drug test. Some employers routinely verify credit, criminal, and employment (including military) histories as well as academic credentials. Driving-record and Social Security traces are also common. Some employers will even contact character references.

Conducting a comprehensive background investigation is less labor intensive and less costly to the employer because of the Internet and electronic record keeping. Employers can also use the Internet to research potential applicants. Some employers now are checking social networking websites as well as entering an applicant's name into search engines to generate information.

Stephanie Marks, a seasoned recruiter and president of human resources at On Call in Ashland, said that many of her company's clients ``are conducting background checks, both large and small, publicly held and private companies. "

I have been involved in cases where an employee has been terminated several years after a falsification was discovered. For years, the employee assumed that this falsified information had ``slipped through the cracks." Instead of falsifying a diploma (or any other qualification), encourage your friend to pursue a GED and to present their background truthfully.

Help me to escape this rut and get ahead

I'm looking for a new job. I've been in a virtual rut now for about two years. I feel that I truly need to go back to school in order to get a good paying job. I'm 25 years old and I would really like to settle down and marry my girlfriend of four years. I've been working mainly warehouse jobs that do not pay well. The stress frustrates me, and leaves me feeling hopeless. So what could I do to get out of this free fall I've been in and finally land a job which I like and pays well?

Let's turn your frustration into a career-oriented action plan. First, think about what motivates you. What do you enjoy doing? What are your passions? Think about your strengths. Are you well-organized? Are you a good multitasker? Are you detail-oriented?

Then also think about what you don't enjoy doing and what you don't do particularly well. Do details bore you? Do you prefer to work independently? Do you dislike repetitive tasks?

No job is perfect. Even those of us who truly enjoy our work have some responsibilities that may not be fun, enjoyable, or suited to our skills, abilities, or interests. When you write down your strengths, abilities, skills, and preferences, you will have a better sense of what truly motivates you. Refer back to this list when considering an opportunity. You want to ensure that a new opportunity capitalizes on your skills, preferences, and abilities.

You offer a comment that inspired me -- going back to school. I am unsure how much education you have. In Massachusetts, and Boston in particular, an undergraduate degree is frequently a requirement for most professional positions. Research suggests that among full-time US workers, those with a four-year degree make 62 percent more than those with a high school diploma . There are certainly exceptions, but for the most part, a bachelor's degree is preferred and often expected in most professional positions. Returning to school may seem like burden but it will pay off.

Some thoughts to ponder: Could you consider a position at a company that offers growth opportunities and tuition aid? Perhaps you could attend school part time and not have the burden of tuition expenses. Or, could you join a local college or university and access free tuition and attend college part time?

To achieve your goal of landing a position that offers more interesting work and perhaps tuition aid, start researching employers that could offer you at least one of these benefits. A job search can be overwhelming. Try to break it into manageable steps. Schedule time to work on your job search to hold yourself accountable. And write it down to keep you honest!

Again as a first step, assess your strengths, abilities, and preferences. Then research companies that can offer you more interesting work and tuition aid. You may need to consider a warehouse position in a new company that offers growth potential and opportunity for advancement. If you do take another similar position, make sure that your new employer offers tuition aid, training opportunities, and promotes from within. You may have to prove yourself for a period of time. Never let your job frustrations affect your performance, though. Being a strong performer will move you ahead.

Patricia Hunt Sinacole, who has 20 years' experience in human resources, is president of First Beacon Group LLC (firstbeacongroup.com), a human- resources-consulting firm in Hopkinton. E-mail questions to jobdoc@globe.com or mail to Job Doc, Boston Globe, Box 55819, Boston, 02205-5819.

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