Products October 16, 2019

Firms Partner to Help Public Employees Save for Health Care in Retirement

BPAS and MOR Strategy Partners have partnered to deliver the Re$erveMOR benefits solution.

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BPAS and MOR Strategy Partners have partnered to deliver the Re$erveMOR benefits solution to public-sector employers and employees.

It addresses the need for employees to optimize their pay through the use of multiple tax-advantaged employee benefits. It’s a convergence of health care, retirement and wellness benefits designed to help public-sector employers and employees build health reserve dollars for retirement.

“The loss/sunset of retiree health coverage for employees in the public sector over the past decade has resulted in a significant economic challenge as they move from active employment,” says Nancy Melcher, chief engagement officer at MOR Strategy Partners. “The ordinary individual who retires with [a] pension, Social Security income and some savings will be significantly under-resourced to deal with health care costs under the current industry benefit structure. We are fixing that with Re$erveMOR.”

The program is currently being offered to select public-sector employers in Wisconsin. It is expected to expand nationally. For more information, contact Nancy Melcher at NancyM@MORStrategy.com.

Compliance October 16, 2019

Legislation to Help Multiemployer Plans Reintroduced

The bill would funnel money to the PBGC from imposed fees on financial companies seeking a DOL exemption in order to manage retirement plan funds.

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Senator Tammy Baldwin, D-Wisconsin, a member of the Senate Committee on Health, Education, Labor and Pensions (HELP), reintroduced her Pension Stability Act.

Current law requires entities convicted of financial crimes to seek an exemption from the Department of Labor in order to manage retirement plan funds. Baldwin’s reform would impose fees on entities seeking the exemption. The new revenue generated from the fees would be directed to the Pension Benefit Guaranty Corporation (PBGC), which insures multiemployer and single employer pension plans.

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The PBGC’s multiemployer pension program, which covers over 10 million participants, is projected to run out of money by the end of fiscal year 2025.

“Financial institutions convicted of a crime should have to pay a penalty that will provide funding to support workers and retirees who saw massive cuts to their pensions through no fault of their own. This reform helps us keep our promise to workers,” says Baldwin.

Baldwin is a cosponsor of the House-passed Butch Lewis Act, led by Senator Sherrod Brown, D-Ohio. The Act would provide funds for 30-year loans and new financial assistance, in the form of grants, to financially troubled multiemployer pension plans. As detailed in the text of the legislation, the program is designed to “operate primarily over the next 30 years.” However, the Congressional Budget Office (CBO) projects that about one-quarter of the affected pension plans would become insolvent in the 30-year loan period and would not fully repay their loans.

Baldwin says the Pension Stability Act would complement the Butch Lewis Act by providing additional funding to the PBGC, helping to shore up worker pension plans. More information about the proposed legislation is here.

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