Benefits February 1, 2007

Empire Health Services to Freeze DB Plan

February 1, 2007 (PLANSPONSOR.com) - Washington state-based Empire Health Services announced that it will freeze its defined benefit plan on April 1 and shift to its 403(b) program.
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According to the Spokane Spokesman-Review, the health services firm mailed an outline of the changes to about 2,500 employees of Deaconess Medical Center and those at Valley Hospital and Medical Center last week.

Empire’s 403(b) plan promises a dollar-for-dollar match up to 4%. Empire spokeswoman Christine Varela said Empire’s match was a response to a competitive job market and good business sense. “It’s what we needed to do and we think the changes will be positive,” she told the newspaper.

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The Empire pension plan – considered to be well-funded – has 3,300 participants and assets totaling about $57 million, according to its 2004 filings with the Internal Revenue Service that the newspaper obtained.

According to the newspaper, the executives at the company met with 100 employees in focus groups last year to gauge what employees’ reaction would be to the switch. The employees in the meetings suggested that they wanted to have more control over their retirement accounts.

The company began offering its defined benefit plan in 1967, which permitted employee contributions. However, t ax laws led to a plan fully financed by Empire which automatically enrolled most workers beginning in 1987, said Empire benefits specialist Barb Brown.

Benefits January 31, 2007

FAA Chief Releases Pilot Retirement Change Proposal

January 31, 2007 (PLANSPONSOR.com) - Federal officials plan to formally propose allowing commercial pilots to stay in the cockpit for five more years - a change expected to affect thousands of pilots in years to come.
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According to a Wall Street Journal news report, as rumored (See FAA Mulling 65 as New Pilot Retirement Age ), Federal Aviation Administration (FAA) chief Marion Blakey has proposed to let older pilots keep flying until they are 65, reversing decades of strong agency support for a retirement at age 60 mandate.

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While pilots’ union leaders believe members generally are more willing to embrace the proposal, the unions want to make sure their voices are fully heard by avoiding congressional intervention. In line with that aim, the agency will undertake a detailed rulemaking exercise, according to the news report.

It is unclear how long it might take to implement the change, according to the news report. A hotly contested rulemaking process could stretch for 18 months or longer where. If pilots unions and other groups adopt a conciliatory stance, a fast-tracked rulemaking could be completed more quickly, the report said.

Regulators’ change of heart is a sign that the airline industry expects a tight pilots’ labor market as well as of eroding pilot pensions that are prompting more veterans to move to extend their careers.

Also, recent research on brain functioning could provide ammunition to counter arguments that older pilots would represent a danger to passengers. Recent discoveries of brain functions suggest that for many older people, experience and ingrained patterns of thinking actually can help keep them at the top of their game as pilots, air-traffic controllers and other professions.

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