Pension Vote Nears, But Which Version?

October 15, 2000 (PLANSPONSOR.com) - With several versions of H.R. 1102, the pension reform bill, before Congress this week, observers are wondering which version the legislators will accept.

The American Benefits Council reports that the issue of whether and to what extent to apply the nondiscrimination tests to H.R. 1102’s catch-up contribution remains a source of intense negotiations between the House and Senate. 

While the Clinton administration continues to signal that it will sign the legislation, there are still signs that it wants potentially significant changes made to the final bill.

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On October 6, Senator Jim Jeffords (R-VT) and Senator Ted Kennedy (D-MA) filed an amendment that would add certain ERISA pension reform provisions to H.R. 1102, according to the American Benefits Council. 

Most of these were in the original version of the bill introduced by Representative Rob Portman (R-OH) and Representative Ben Cardin (D-MD), but were taken out by the Senate Finance Committee during their deliberations.

The Jeffords-Kennedy amendment would:

  • Expand the Pension Benefit Guaranty Corporation’s (PBGC) Missing Participants program to include terminating multiemployer and defined contribution plans
  • Reduce PBGC premiums for new and small employer plans to a flat $5/participant for the first five years of operation, with a phased variable premium over the first six years
  • Authorize the PBGC to pay interest on premium overpayment refunds – at the same rate and manner as interest is charged on premium underpayments
  • Simplify the substantial owner benefit rules for terminated defined benefit plans
  • Increase the PBGC guarantee of benefits for multiemployer plans to account for changes in the social security wage index since 1980
  • Allow the Secretary of Labor to reduce or waive civil penalties for breach of fiduciary responsibility, removing disincentives to quickly settle disputes
  • Make parties that are jointly and severally liable for fiduciary violations also jointly and severally liable for the related penalty
  • Modify the rules regarding benefit suspension notices to require such notices be given only to beneficiaries who return to the workforce, since they are often regarded by employees who choose to work past normal retirement as a signal that the employer is trying to force them into retirement.

– Nevin Adams         editors@plansponsor.com  

If you’d like to read the amendment explanation, check out http://www.americanbenefitscouncil.org
/documents/pensiondescription10600.htm

The full amendment is at: http://www.americanbenefitscouncil.org/documents/slcoct5.pdf

Healthcare Costs Underestimated: Study

March 9, 2001 (PLANSPONSOR.com) - Employers may be underestimating the total costs of employee health conditions by as much as 80%, according to a new study.

The study, released by the Integrated Benefits Institute (IBI), found that the costs of medical treatment made up less than 20% of the $1.24 billion in health-associated costs during the 30-month study period.  Lost productivity alone accounted for nearly $1 billion.

Cost differences among health plans are driven more by short-term disability wage replacement than by medical care payments.

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Cost Components

Nine medical conditions account for three-fourths of all medical and disability costs, with musculoskeletal, cardiovascular and mental health combined accounting for nearly half.

Employees out on short-term disability represent only 11% of cases but account for more than half (53%) of total group health and short-term disability costs.

The research also noted that:

Total medical and disability costs differ significantly by health plan for the same medical condition, with employees covered by fee-for-service experiencing higher total medical/disability costs and longer disability durations than those treated by preferred provider network.  Total costs for:

  • mental health conditions averaged 22% higher
  • back and spine conditions were 18% higher, on average

IBI, in partnership with members CORE, INC. and The MEDSTAT Group, analyzed more than 300,000 group health and 32,000 related short-term disability episodes for a large Midwest manufacturer with 72,000 employees.


 

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