Compliance July 21, 2017

Committee to Pursue Policy Objectives for Multiemployer Plans

The NCCMP will pursue enactment of legislation for a new composite plan for multiemployer plan sponsors, among other things.
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At its annual meeting, the Board of Directors of the National Coordinating Committee for Multiemployer Plans (NCCMP) reaffirmed its commitment to pursue three significant pension policy objectives in 2017.

The committee will pursue enactment of the Composite Plan legislation that provides plan sponsors with the legal framework for a new voluntary pension plan design that fully funds the legacy defined benefit plan while creating a new type of plan going forward that incorporates the best features of both defined benefit and defined contribution plans. NCCMP has proposed a composite plan, viewed as shared-risk design that could be used if enacted. It is a concept of shared risk between the plan, participants and employer members.

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The NCCMP is committed to ensuring that the Kline-Miller Multiemployer Pension Reform Act of 2014 (MPRA) is a real tool for Trustees to restore troubled plans to solvency and protect beneficiaries from the even larger benefit reductions that they will see when their plan becomes insolvent and subject to the Pension Benefit Guaranty Corporation (PBGC) guaranty. Under the MPRA, troubled multiemployer plans can apply for a suspension or reduction in benefits to improve plan solvency.

The committee says it will continue to oppose PBGC premium increases. “While the PBGC must be a credible insurer that can honor its commitments, this must be accomplished in a way that does not require catastrophic premium increases that will destroy the viability of the multiemployer system. Congress passed MPRA to provide Trustees with the self-help tools needed to restore solvency to multiemployer pension plans, and which would also serve to remove these plans from the PBGC’s net deficit numbers. Faithfully implemented, MPRA’s tools would significantly reduce the need for additional PBGC premiums. Until this law is allowed to achieve its intended purposes, we will continue to oppose PBGC premium increases in any form,” the NCCMP says.

“The NCCMP remains committed to our ongoing efforts to preserve and strengthen multiemployer plans for the benefit of our participants and beneficiaries, as well as the success of the job creating employers of America,” says Sean McGarvey, Chairman of NCCMP.  “These efforts are critical to the financial health of pension plans, participants and beneficiaries, employers, the U.S. Government, state and local governments, and the U.S. economy.”

Benefits July 21, 2017

Out of Pocket Health Costs Could Lead Some to Dip into Retirement Savings

Medical bills are hurting the financial wellness of employees, particularly younger workers, a survey finds.
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With deductibles continuing to climb, many Americans who have health insurance through their employers, particularly younger workers, are struggling when it comes to out-of-pocket medical expenses, according to a survey from Securian Financial Group.

Nearly four in 10 workers on employer-sponsored health plans are personally experiencing or know someone who is having financial difficulty due to medical bills. More than half (52%) of Millennials on a health plan through their employer are personally struggling or know someone who is struggling to pay medical bills.

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According to the survey, 28% of employees with health insurance through work facing an out-of-pocket expense of $5,000 or more would use their personal savings to pay rather than other means, including a health savings account (8%) or supplemental group insurance (7%). However, a majority of respondents said they do not know how they would pay (21%), or that they would need to rely on credit cards (12%), a loan from their 401(k) (7%) or family/friends (4%), their tax return (5%), or by selling/pawning a personal possession (2%). Four percent said they would not pay at all.

While solutions for combating unexpected medical expenses are available, most workers do not know about them. The survey found that fewer than half of Americans with health insurance through work (44%) are aware that many employers provide supplemental group insurance options to help employees pay for out-of-pocket expenses and other costs associated with an accidental injury, hospital stay or critical illness.

Securian’s survey was conducted online by KRC Research from June 8 to June 12, 2017. A total of 1,010 survey respondents answered an initial screener question on the source of their health insurance. The rest of the survey was answered by a base of 573 respondents who participate in a health insurance plan provided by their employer or their spouse’s employer.

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