Compliance December 19, 2011

CVS Settles Pension Funds’ Suits for $20M

December 19, 2011 (PLANSPONSOR.com) - CVS Caremark Corp. has agreed to pay nearly $20 million to settle three lawsuits involving allegations that the company defrauded pension systems in three states.
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The whistleblower lawsuits, filed by two former CVS Caremark pharmacists, accused the company of reselling returned drugs, changing prescription orders to make them more expensive and submitting false reports about how long it took to fill prescriptions, according to the Los Angeles Times.  

Under terms of the settlements, CVS Caremark will pay nearly $7 million to the California Public Employees’ Retirement System (CalPERS), $4 million to the state of Illinois and $3 million to the state of Florida. Other money from the settlement went to plaintiff attorneys’ fees and costs, attorneys said in a news release.  

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CVS Caremark did not immediately respond to the Times’ request for comment.  

The news report said that despite the allegations, CalPERS agreed in June to pay CVS Caremark $575 million per year to provide prescription drug benefits to 346,000 members.
Benefits December 19, 2011

N.M. Retiree Health Care Authority Considers Age Limit

December 19, 2011 (PLANSPONSOR.com) - The New Mexico Retiree Health Care Authority is considering setting a minimum retirement age before retirees can receive benefits.
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According to the Santa Fe New Mexican, New Mexico subsidizes the cost of monthly healthcare premiums paid by retirees of state government, public school systems and local governments. If the minimum retirement age is adopted, that means individuals who retire before the minimum retirement age, whether 55 or 60, would pay the full freight of healthcare costs until they reach the prescribed age.  

“It’s still in the discussion phase,” said Wayne Propst, the authority’s executive director, who appeared before state lawmakers this week to talk about the agency’s discussions, according to the New Mexican.  

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Age limits are a novel step in New Mexico, where age isn’t a determinant for when public-sector retirees can qualify for pensions or healthcare benefits; however, with New Mexico’s two pension funds and the New Mexico Retiree Health Care Authority struggling with large gaps in funding, the concept of minimum retirement ages is appealing.

The Educational Retirement Board (ERB) in November narrowly voted to recommend setting a minimum retirement age of 55 (see New Rules Proposed for New Mexico Educators’ Pension). 

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