PPA Remains on Legislative Agenda
More than a year after its enactment, the Pension Protection Act of 2006 (PPA) remains under discussion on Capitol Hill and in the administration. Just before heading off for their month-long August recess, lawmakers introduced legislation that would make technical and clarifying changes to the PPA. |
Mental Health Parity Reform Nears Passage
There are two bills pending in the House and Senate to reform the Mental Health Parity Act of 1996. Under the bills, health plans could not impose different treatment limitations and financial requirements on mental health/substance abuse benefits than on medical/surgical benefits. The parity requirements would apply to all plans that offer mental health and substance abuse benefits. Debate has been focused on three broad issues: ERISA preemption, mandated benefits and medical management practices. Pay Discrimination Bill Would Affect Benefit Plans
Legislation pending in the House and the Senate to address pay discrimination could have unintended consequences for employer benefit plans. Representative George Miller (D-Massachusetts) introduced the Lilly Ledbetter Fair Pay Act of 2007 in the House, and Senator Edward Kennedy (D-Massachusetts) introduced the Fair Pay Restoration Act in the Senate. Both bills share nearly identical language that would eliminate the statute of limitations on federal employment discrimination lawsuits, effective retroactively to May 28, 2007. House, Senate SCHIP Bills Include Medicare, FMLA Provisions
The House and Senate approved separate bills to reauthorize and expand the State Children’s Health Insurance Program (SCHIP), setting the stage for conference negotiations in September. The bills also would make changes to Medicare and the Family and Medical Leave Act (FMLA) – with implications for employers. Representative Miller Introduces 401(k) Fee Legislation
The 401(k) Fair Disclosure for Retirement Security Act of 2007 (H.R.3185) would require plans to disclose more information about fees charged to 401(k) participants and potential conflicts of interest. It also would require that 401(k) plans offer an index fund. Cashing Out: A Threat to Retirement Security?
Many workers who leave their jobs must make a decision that may have significant ramifications down the road: what to do with their defined benefit (DB) or defined contribution (DC) plan. Sometimes one of the choices is to cash out the account — withdraw the money in one lump-sum payment. But workers who exchange tax-deferred savings for ready money may be dimming their later prospects for a secure, adequate retirement income. Workforce Management and Retirement in a 401(k) World
Media reports about private-sector employers — including many large, financially sound companies — freezing and terminating their defined benefit (DB) plans have appeared frequently in both business journals and the popular press. Commentators have proposed various theories to answer the “whys” of the recent employer shift from DB to defined contribution (DC) plans: maintaining competitiveness, exploding health costs, unmanageable pension costs and risks, changing workforce characteristics, and a punishing regulatory environment. Most of the media coverage focuses on how the change will affect workers, but the consequences will ripple to employers as well. Tying Health Benefits to Health Status: A Few Words of Caution
With health costs still rising at twice the rate of inflation, employers are looking for ways to get more from their health care dollars. To encourage workers to improve their health, some new insurance products provide supplemental benefits to members who meet specific health thresholds, such as a low body-mass index or cholesterol level, or practice certain healthy behaviors, such as not smoking. Pension Freezes: Has the Worst Passed?
The percentage of plan sponsors that froze their pension plans dropped from 7 percent in 2006 to 4 percent in 2007, according to a recent study by Watson Wyatt. Studies over the last few years have shown a gradual and steady increase in plan freezes, but this year we might be seeing the beginning of a slowdown. House SCHIP Provision Would Impose Fee on Health Plans
The Children’s Health and Medicare Protection Act of 2007 (CHAMP Act, H.R. 3162) would reauthorize and expand the State Children’s Health Insurance Program (SCHIP) for five years. It also would impose an annual fee on insured and self-insured health plans to fund a new research center to study health care services and procedures. Investment Issues on Congress’ Radar Screen
Recent publicity surrounding private equity firms, carried interest and hedge funds has drawn legislative attention to those issues. Key lawmakers have indicated that legislation is unlikely to advance in 2007, but the issues could move up the legislative agenda in 2008. Any new tax or disclosure rules for these investments could have significant implications for retirement plans. Developments in Retirement Programs in Spain
The retirement system in Spain includes three pillars: a generous, almost universal Social Security program; employer pension and insurance plans, which are mainly sponsored by large companies and cover fewer people; and a moderate but significant penetration of individual retirement savings products. Spain’s population is aging rapidly, and, like many developed countries, Spain must act soon to avert significant deficits later in its public retirement income programs.
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