FOR IMMEDIATE RELEASE
IR #2008-69
November 25, 2008

CONTACT:
Dean Fryer
Erika Monterroza
(415) 703-5050
Internet: www.dir.ca.gov


Mervyns LLC in Default – Workers’ Comp Benefits To Be Paid by SISF

Sacramento – Department of Industrial Relations Director John C. Duncan advises all interested parties that Mervyns LLC is in default of its obligations to pay workers’ compensation benefits for injuries during the period it was self-insured, February 1, 1990 through August 28, 2004.

Mervyns LLC is the successor to Mervyns. Mervyns had been a “partial” participant in the alternative security program (ASP) within the Self Insurance Plans (SIP) program since its certificate of consent to self insure was revoked after its spin-off from Target Corp. At the time of revocation Mervyns posted $220,000 as required by regulations governing self-insured employers at that time. The balance of the deposit was covered by an ASP assessment which was paid yearly since 2003.

Both the deposit Mervyns had posted to secure these payments and the liability to pay benefits have been turned over to the California Self Insurers Security Fund (the Fund). By law the Fund has 30 days to initiate payment. Through prior arrangement all payments to injured employees have been made through the end of November.

Mervyns employees with workers’ compensation claims for injuries received in the period February 1, 1990, through August 28, 2004, may now contact the Tristar Risk Management Senior Claims Supervisor Juliann Ginn for assistance at 925-339-8822 ext. 1876, or e-mail her at Julieann.ginn@tristargroup.net.

The Fund is a non-profit mutual benefit corporation created by the State of California in 1984. Its purpose is to provide continuation of statutory workers’ compensation obligations to the employees of private employers which were legally self-insured for workers’ compensation in California and defaulted in their workers’ compensation obligations.

The Fund’s assets and operations, which are designed to assume the future workers’ compensation liabilities of private self-insureds in the event of default, help ensure the viability of a workers’ compensation self-insurance program option for private companies operating in California.

California mandates that all private self-insured employers for workers’ compensation share the joint and several liabilities of workers’ compensation claims arising from insolvent self-insureds (estates). The Fund provides the organization to manage estate claims and to ensure adequate funding. The Fund uses member assessments; investment income; member posted collateral; bankruptcy liens, and credit default risk transfer to accomplish its mission.

Self Insurance Plans (SIP), a program within the Director's Office of the Department of Industrial Relations (DIR), authorizes qualified employers to provide their own coverage for workers' compensation liabilities. The director of Industrial Relations is responsible for certification of public and private self insured employers, third-party administrative agencies that oversee self insurance programs, and individual claims adjusters. Self insurers are required to post a security deposit -- adjusted annually to cover liabilities incurred -- and to submit to SIP audits.

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