Benefits October 17, 2005

Montana Ed. Panel Considers Health Coverage Alternatives

October 17, 2005 (PLANSPONSOR.com) - Montana state budget director David Ewer has come up with two possible health coverage changes for the state's troubled education system.
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At the latest meeting of the Quality Schools Interim Committee, Ewer offered two modifications to his original $14 million plan that would expand health insurance offerings to all districts in the state, BNA reported.

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The original plan was aimed at bringing down premium costs for school districts by having the state pay all claims greater than $150,000. A union official criticized the plan for excluding retirees. Ewer said school districts could keep the savings incurred by the lower premiums and use the money for retiree insurance, but he came back to the committee with two modified proposals, both of which include retired teachers, BNA reported.

One proposal would have the state fund claims over $150,000 and the other would have the state assume responsibility for claims over $100,000. Both would cost the state $14 million, he added.

The committee took no action on either proposal. Ewer also expressed the administration’s “qualified support” for an idea to fold teachers, who are county employees, into the health insurance pool for state employees.

The panel is charged with drafting a school funding proposal that will meet the requirements of the Montana Supreme Court. The court ruled March 22 that the state’s current system of education funding violates the constitutional mandate for a basic system of free quality public elementary and secondary schools.

Compliance October 14, 2005

UK Pension Insurer to Consider Special Pension Contributions

October 14, 2005 (PLANSPONSOR.com) - Officials at the UK Pension Protection Fund (PPF) take into account special cash contributions made by employers to make up funding deficits in their pension plans while calculating employer insurance levies.
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From April 2006, the PPF will charge a risk-based fee that will take into account the level of underfunding of an employer’s pension plan, the risk of insolvency of the sponsoring employer and the amount of benefits that the fund would have to pay if the pension plan were accepted into the PPF, Business Insurance reported.

The PPF said that as a result of public feedback, it would include the special contributions made by employers into their pension plans in its calculation of pension plan underfunding. Plus, the PPF said it would also consider the use of contingent assets – such as letters of credit – used by employers seeking to address their pension funding deficits.

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The PPF also said it would put off until March 31, 2006, a deadline for employers to provide the PPF with their valuations of pension fund assets and liabilities, as well as information about the structure of their pension plans.

The London-based Confederation of British Industry, which represents employers in the United Kingdom, welcomed the PPF’s announcement.  “It is vital, when calculating the levy, that the PPF takes into account the additional forms of security which companies are able to provide against their pension scheme liabilities,” the CBI said in  a statement .

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