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Congress Debates Medicare Reform
As this issue of the Watson Wyatt Insider went to press, the House and Senate had approved
separate bills to reform Medicare and provide prescription drug coverage for seniors. There are some important differences between the Senate’s Prescription Drug and Medicare Improvement Act and the House-approved Medicare Prescription Drug and Modernization Act. Pension Plan Sponsors Looking for Funding Relief from “Perfect Storm” Conditions
Over the last few years, the investment climate has been marked by the equivalent of a perfect storm, leaving many defined benefit plan sponsors with underfunded plans. Unless we see
extraordinarily healthy investment performance very soon, plan sponsors will have to make
significant contributions to their pension plans over the next few years. Health Care Issues Hit Legislative Agenda
A range of health care issues — Medicare, drugs for seniors, genetic discrimination, generic drugs and health savings accounts — has been the focus of recent congressional attention. The Medicare and prescription drug debates are in full swing, and Congress is discussing legislation to ban
discrimination based on genetic information, to speed generic drugs to the marketplace and to authorize Health Savings Accounts. DOL Provides Flexibility on Plan Expenses
In Field Assistance Bulletin (FAB) 2003-3, the U.S. Department of Labor (DOL) gives plan
sponsors and fiduciaries considerable flexibility to determine — as a matter of plan design or administration — how to allocate defined contribution plan expenses among participants and beneficiaries. For the purposes of this guidance, the DOL assumes that the expenses are proper plan (not settlor) expenses and are reasonable amounts. The guidance does not address issues that could arise under IRS rules.
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