Compliance June 19, 2015

Bill Would Block Multiemployer Plan Benefits Cuts

The bill would repeal the provision in recent pension reform that would allow multiemployer plans to cut benefits.
Reported by

U.S. Senator Bernie Sanders (I-Vermont) has introduced legislation to keep multiemployer pension plans from cutting benefits.

In the Multiemployer Pension Reform Act of 2014 (MPRA), Congress established a new process for multiemployer pension plans to propose a temporary or permanent reduction of pension benefits if the plan is projected to run out of money. A multiemployer pension plan sponsor that believes benefit reductions are needed must submit an application to the U. S. Department of the Treasury showing that reductions are necessary to keep the plan from running out of money.

Get more!  Sign up for PLANSPONSOR newsletters.

Sanders’ bill would repeal that provision and restore anti-cutbacks rules, so retirees in financially troubled multiemployer pension plans will be protected from having their earned benefits cut. The bill also establishes a legacy fund within the Pension Benefit Guaranty Corporation (PBGC) to make sure multiemployer pension plans can continue to provide pension benefits. The legislation is paid for by eliminating a loophole in the estate tax and a tax break on sales of expensive art and other collectibles.

“If we do not repeal this disastrous law, retirees all over this country could see their pensions cut by 30% or more.  We cannot let that happen,” Sanders said in a statement. “Instead of asking retirees to take a massive cut in their pension benefits, we can make these plans solvent by closing egregious loopholes that allow the wealthiest Americans in this country to avoid paying their fair share of taxes.”

The same version of the bill was also introduced in the U.S. House by Representatives Marcy Kaptur (D-Ohio) and Tim Ryan (D-Ohio).  The U.S. Department of the Treasury released proposed and temporary regulations to implement the suspension of benefits provisions of MPRA the same day the bill was introduced to lawmakers.

More information about Sander’s bill can be found here.

Compliance June 19, 2015

ERIC Makes Recommendations for Wellness Rule

The ERISA Industry Committee has commented on the EEOC’s proposed rules for employer wellness programs.
Reported by

The ERISA Industry Committee (ERIC) says that while the proposed rulemaking from the Equal Employment Opportunity Commission (EEOC) about employer wellness programs is a positive step forward, it could be improved. 

ERIC suggests the regulations should conform as closely as possible to the current regulations under the Patient Protection and Affordable Care Act (ACA) that govern workplace wellness programs.  Also, incentive limits should be aligned so that rewards in a self-only plan are based on the cost of self-only plans, and the incentives for families are based on the cost of family coverage. 

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

ERIC recommended that the EEOC adopt an effective date no sooner than January 1, 2017, and begin with a good faith interpretation standard for the first year.  In addition, it suggests employers should be permitted to use “gateway” designs in their benefit programs, where an employee is eligible for a certain benefit package or plan option as a result of participating in a wellness program. 

According to ERIC, the EEOC should not impose limits on wellness program incentives offered outside of a group health plan, and the agency should end Genetic Information Nondiscrimination Act prohibitions on the use of incentives in requests for family medical history information and use of family medical history in disease management outreach.

Experts in the health and wellness program industry say the proposal from the EEOC in April did not address all the issues between employer wellness programs and the Americans with Disabilities Act (ADA).  “The idea [behind issuing proposed rules for employer wellness programs] was to provide clarity and consistency, and while the EEOC was conceptually in the neighborhood, it provided a little more clarity, but a lot more inconsistency,” Michael Dermer, chief incentive officer at Welltok, a Denver-based company that created the CaféWell Health Optimization Platform, previously told PLANSPONSOR.

«