State Advisers to Register in Federal Databank

August 23, 2004 (PLANSPONSOR.com) - State-registered investment advisers seeking investment manager status under federal benefits law must register electronically through the Investment Adviser Registration Depository (IARD).

The US Department of Labor’s Employee Benefits Security Administration (EBSA) announced the rule Monday covering advisers looking for the manager status under the Employee Retirement Income Security Act (ERISA).

The IARD is a centralized electronic filing system for investment advisers created by the US Securities and Exchange Commission (SEC) and state securities regulators.   A majority of state-registered investment advisers who are investment managers of ERISA-covered plans already file registration forms electronically through the IARD, the EBSA said in a news release.

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“Our rule allows plan fiduciaries to consult a single source to find out whether an investment advisor is registered, while also streamlining the process through the elimination of paper filings,” said Ann Combs, assistant secretary of EBSA, in the news release.

Under ERISA, plan trustees are relieved of certain liabilities relating to management of plan assets by a registered investment adviser, bank or insurance company who meet certain requirements to be appointed an investment manager for an ERISA-covered plan.

The EBSA said the final rule will apply to investment adviser registration filings due on or after October 25, 2004.  More information on IARD is at http://www.sec.gov/divisions/investment/iard.shtml .

CA Exploring Low-Cost Drug Alternatives

August 20, 2004 (PLANSPONSOR.com) - Governor Arnold Schwarzenegger is calling for a new program in California to offer drug discounts to the uninsured as an alternative to importing drugs from Canada.

Kimberly Belshe, the state’s health and human services secretary, has rejected legislative plans to set up a Web site for California residents to facilitate the purchase of Canadian drugs. Rather, Belshe sent a letter to legislative leaders that outlines the administration’s plans to take advantage of free drug programs sponsored by pharmaceutical companies and renew efforts by the state to use its leverage to negotiate discounts, according to a San Diego Union Tribune report.

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In the letter, Belshe said the free drug programs have not been sufficiently publicized or made accessible to people who qualify. Under the plan, participants would get a card they could present to a pharmacist, who would then find the lowest price for the drugs, whether through state-leveraged discounts or a manufacturer’s patient-assistance program.

Additionally, the state would contract with an outside vendor to negotiate price discounts from drug manufacturers and operate an enrollment system.

While the governor’s program would be targeted toward uninsured, lower-income residents, it would be available to families with incomes of up to 300% of the federal poverty level, or about $55,000 for a family of four.

Canadian Drug Efforts

The Democratic-controlled Legislature has given preliminary approval to two proposals for obtaining Canadian drugs. One would create a state Web site to make it easier for Californians to buy the cheaper drugs, while the other would put state agencies on the road toward buying them. The bills had been expected win final approval and sent to the Republican governor’s desk next week.

Pointing to efforts amongst legislatures to examine importation models, Belshe said such a proposal would expose the state to civil and criminal liability because it would violate a federal prohibition against importing drugs from Canada. Further, she added the l egislation “would at best be a symbolic gesture that would never be implemented and never bring relief to Californians who desperately need assistance.”

Even though federal law makes it illegal to import drugs from Canada, a variety of states are challenging the law. Earlier this week, Illinois Governor Rod Blagojevich announced plans on to set up a state Web site to facilitate individual purchases from Canada, Britain and Ireland (See Illinois Becomes Fifth State to Import Prescription Drugs from Abroad ). With the announcement, Illinoisbecame the fifth state to allow residents access to imported drugs – the others areMinnesota,Wisconsin,New Hampshire, andNorth Dakotabut it will be the first state to include countries inEurope.

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