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: Committees on Benefits Finance: Issues |
- Health Care Reform - Jan 2011
The long, windy and often bumpy road to reform the nation’s health care system finally ended when the House of Representatives voted 220-to-207 in late March to approve a reconciliation package that included reforms to health care and higher education. The reconciliation bill made changes to the health care bill that was crafted by the Senate and signed by President Obama on Tuesday, March 23.
FEI drafted and sent a letter to Congress that demonstrates the financial hardship that companies are already feeling from a provision in the new law that eliminated the tax deductibility of a subsidy that is offered to employers who continued to provide prescription drug coverage to their retirees.
FEI will continue to remain engaged as the Administration begins the rule-making process that will establish the regulations that correspond with the new law and will keep FEI members informed of new costs and impacts to businesses. FEI is also monitoring the efforts to repeal certain parts of the legislation.
- Pension Funding - Sep 2010
On June 25, 2010 President Obama signed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010” (the “Act”). Within the bill was a provision that provided defined benefit pension funding relief that would allow plan sponsors to amortize funding gaps over a longer period of time than is currently allowed. In addition, this legislation enables funding relief for up to two years.
Specifically, the bill would allow plan sponsors a choice between electing relief under the 2 and 7 rule (interest only payments would be made for the first two years) or the 15-year rule for any two plan years during the 2008-2011 period. However, there are strings attached that would require plan sponsors to make additional contributions to their pension plans in the amount equal to the sum of the aggregate excess employee compensation (i.e. taxable compensation over $1 million) and the aggregate amount of dividends and stock redemptions over a specified threshold.
This funding relief comes after a year of work by FEI and others in the business community who have supported pension funding relief for those pension plans hit hard by the recession and global economic turmoil. In October of 2009, the Committee on Benefits Finance helped to organize written testimony submitted by FEI President and CEO, Marie Hollein, to the House of Representatives’ Ways and Means Committee.
The testimony, along with FEI's pension discussion points, demonstrated to Congress that at a time when companies desperately need cash to keep their businesses afloat, funding rules will require huge, countercyclical and unexpected contributions to pension plans.
On September 16, 2010, Senate Finance Committee Chairman, Max Baucus (D-Mont.), introduced the Job Creation and Tax Cut Act of 2010. This bill would provide technical corrections to the pension funding relief bill signed by President Obama in June. A summary of what plan sponsors are seeking in terms of technical corrections can be found here.
FEI will continue to follow the process as corresponding rules and regulations are released.
- Chart Outlining Changes to COBRA laws - Mar 2009
New COBRA health coverage rules were signed into law by President Obama as part of the economic stimulus bill in February 2009. This chart identifies some of the many issues raised by the new law. Effective March 1, 2009, the new rules generally provide that certain individuals electing COBRA by reason of an involuntary termination of employment may purchase COBRA at a 65% discount for up to 9 months, with the government making up the difference in the form of a subsidy to be delivered to employer plan sponsors through reduced payroll tax obligations.
- Whitepaper on Plan Governance by PwC - Mar 2009
Plan governance in the United States has recently become an increasingly important topic for plan administrators, plan sponsors, and plan fiduciaries. This whitepaper provides an introduction to plan governance.
- Discussion Paper - The Credit Crisis and FEI Member’s Defined Benefit Plans - Mar 2009
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