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A federal judge in Texas issued a nationwide injunction on Tuesday against an Obama administration regulation expanding by millions the number of workers who would be eligible for time-and-a-half overtime pay, the New York Times reported today. The regulation was scheduled to take effect on Dec. 1. It would raise the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660. The judge, Amos L. Mazzant III of the Eastern District of Texas, ruled that the Obama administration had exceeded its authority by raising the overtime salary limit so significantly. The ruling was hailed by business groups who argued the new rules would be costly and result in fewer hours for workers. The Labor Department said that it “strongly disagreed” with the decision and was “considering all of our legal options,” raising the possibility of an appeal in the waning days of the Obama administration. Ross Eisenbrey of the Economic Policy Institute, whose writings on the subject helped shape the administration’s regulation, called the ruling “a disappointment to millions of workers who are forced to work long hours with no extra compensation.”

Defunct telecommunications company Nortel Networks Inc. won a victory in its fight with federal pension regulators when a bankruptcy judge rejected a briefing schedule proposed by the Pension Benefit Guaranty Corp. (PBGC), Bloomberg BNA reported yesterday. Nortel, which filed for bankruptcy in 2009, had clashed with the PBGC over how to value the company’s unfunded pension liabilities. The PBGC claimed in 2009 that Nortel owed $593 million in pension payments, but the agency upped that amount to $708 million in 2014, a move that Nortel said lacked factual support. The judge’s decision yesterday setting an evidentiary hearing for Jan. 9-11, 2017, is a win for Nortel, which argued that the PBGC should be forced to turn over documents relevant to its valuation process. 

A fight is brewing in U.S. court that threatens to derail a settlement deal struck last month to conclude a seven-year battle over divvying up Nortel Networks Ltd.’s remaining $7.3-billion (U.S.) in assets, the Globe and Mail reported today. The Pension Benefit Guaranty Corp. (PBGC) has objected to the settlement plan, saying it may not receive enough to cover its $708-million claim, which represents the shortfall in Nortel’s U.S. pension plan after the company filed for chapter 11 bankruptcy protection in 2009. Nortel’s U.S. division has 22,000 pension plan members. PBGC said in a court filing it will “defend its claims aggressively” to ensure it receives the highest possible payout, and warns the settlement will not achieve the desired resolution of the case but will instead “needlessly instigate a lengthy and bitter dispute.”

Kentucky plans to pull more than half of its investments in hedge funds in the coming three years, a significant retreat for a state that had embraced Wall Street money managers following the last financial crisis, the Wall Street Journal reported today. The deeply indebted Kentucky Retirement Systems, or KRS, expects to withdraw at least $800 million out of $1.5 billion committed to hedge funds, David Eager, interim executive director, said yesterday after a meeting of the committee that oversees investments for the state’s pension and insurance funds. The investment committee drew up a plan to pull $600 million from hedge funds by July and the remaining $200 million by July 2019. The proposal must still be approved by the full board, which meets Dec. 1. Eager said that the investment committee hasn’t decided yet where those funds will be reinvested.

Bets on expensive but poorly performing hedge funds have cost pensioners in New York $3.8 billion in the last eight years, according to a report published by the state's financial regulator on Monday, Reuters reported. “Hedge fund managers continue to reap hundreds of millions of dollars in fees, regardless of their performance, which is a rip-off at the expense of pensioners,” Maria Vullo, superintendent of the New York State Department of Financial Services, said in a statement. The New York State Common Retirement Fund, which oversees $178 billion in assets and is the third-largest U.S. pension fund, paid $1 billion in fees to hedge fund managers over the last eight years, the regulator said in the report. The funds underperformed to the tune of $2.8 billion, said the regulator, which oversees banks and insurance companies in the state.

Twenty-one states yesterday requested that a federal judge block the Labor Department’s implementation of a new rule that raises the threshold for overtime payments, MorningConsult.com reported. The states filed a motion for a preliminary injunction in their case against the DOL in the U.S. District Court for the Eastern District of Texas. The request is not limited to the states that filed the lawsuit. If granted, it would apply nationwide. The rule, which more than doubles the salary threshold for overtime exemption to over $47,000, “visits harm upon the public by raiding state budgets, causing layoffs, and disrupting governmental functions” in violation of federalism and separation of powers, according to the motion. The rule takes effect on Dec. 1.