October 2010Vol. 47, No. 10
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Global EAPs and the Challenges of Managing a Global Workforce
by Gregory A. Bayer
Employees far from home may be struggling to balance around-the-clock work demands, health, families and more. Globalization and advanced technologies can actually have an adverse effect on employee productivity, and many global companies lose millions of dollars in decreased worker productivity due to depression, illness and difficulty managing work/life issues. Global employee assistance programs are helping companies save money while increasing productivity and quality of life for employees. |
September 2010Vol. 47, No. 9
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Communicating Benefits: The Times They Are A’Changin
by Leanne Fosbre, CEBS
Many employees fail to read benefit communications. But because of health care reform, it’s especially important that employees do not ignore health care benefit communications—particularly annual enrollment material. Doing so can mean missed opportunities, misunderstandings, miscalculations for flexible spending accounts and a host of other problems. The author suggests points to consider in communicating changes created by health care reform—including a subtle message that costs may increase. |
April 2010Vol. 47, No. 4
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Piercing the Corporate Veil: Directors’ Liability for Unpaid Wages and Benefits
Corporations are considered as entities separate and distinct from the people who serve as office holders, directors, employees or other agents, and courts are reluctant to find directors responsible for a corporation’s debts. However, liability for employee wages and benefits is one area where the courts make an exception. This article discusses directors’ personal liability for unpaid wages under the Canada Labour Code, the Canada Business Corporations Act and the Ontario Employment Standards Act and Business Corporations Act. |
November 2009Vol. 46, No. 11
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Pension Plan Trends in the United States: A Comparison of DB and DC Plans
How are economic turmoil, workplace demographics, a stricter regulatory environment and other issues affecting U.S. pension plans? In this White Paper, the International Foundation of Employee Benefit plans has compiled summaries of 27 leading resources—including surveys, articles and research—that give a comprehensive picture of the state of pension plans. An easy-to-read chart presents the developments/threats impacting defined benefit and defined contribution plans and the ways in which plans are reacting. The paper offers reasons DB and DC plans will not disappear, while simultaneously examining other approaches to pension design. A brief summary and analysis of each resource follows the chart. |
October 2009Vol. 46, No. 10
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Tax Deductibility of Unpaid Employee Welfare Benefit Claims
by Wayne W. Wisong and Juan N. Kelly
The rules governing the deductibility of incurred but not reported claims (IBNR) in an employee welfare benefit program are complex, leading benefits and accounting professionals to offer differing interpretations to clients and employers. The purpose of this article is to clarify those rules and the circumstances under which employers may claim a deduction. The article provides an overview of sections of the Internal Revenue Code of 1986 and discusses tax issues such as the applicability of cash versus accrual accounting methods. It includes a judicial interpretation of the “all-events” test before and after the advent of “economic performance.” |
September 2009
Vol. 46, No. 9
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Qualified Domestic Relations Orders: How Far Can a Posthumous QDRO Reach From the Grave?
by Mark H. Lipton
The Retirement Equity Act (REA) of 1984 created qualified domestic relations orders (QDROs), significantly voiding ERISA’s antiassignment provisions. After REA, a state court order could require a pension plan to make pension payments to other than the employee participant. REA simultaneously created the joint and survivor annuity as the automatic form of benefit for married couples and the preretirement death benefit, also paid to the surviving spouse or the alternate payee under a QDRO if she or he were a prior spouse. Courts have introduced the posthumous QDRO, buttressed by the Pension Protection Act (PPA), adding more than a footpath to a well-traveled judicial highway where PPA, ERISA, REA and laws of 50 states intersect. |
July 2009
Vol. 46, No. 7
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Multiemployer Plan Strategies After the Great Recession
by William J. Ruschau
Even the best-funded pension plans face sizable deficits, and trustees are being required to make hard decisions in order to restore financial strength to them. This article warns about the counterproductive activities trustees should avoid and sets forth some of the positive steps they should consider. The author also spells out some of the options available under the tax code. |
June 2009
Vol. 46, No. 6
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Rebalancing Reset: A New Approach for Multiemployer Plan Trustees
by Kevin Matthews
Because of recent market conditions, institutional investors may want to reexamine how they rebalance portfolios. The author suggests taking a more flexible, less automated approach to this important portfolio management strategy. |
May 2009
Vol. 46, No. 5
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The DOL Provides Guidance to Plan Fiduciaries in the Wake of Madoff Scandal
by Neal S. Schelberg and Charles F. Seemann III
Plan fiduciaries are continuing to come to grips with losses in employee benefit plans that were invested with Bernard L. Madoff, who pled guilty in March to running the biggest investment fraud in Wall Street history. This article discusses the actions that the U.S. Department of Labor suggests fiduciaries take in handling Madoff-related losses in order to protect plan participants and beneficiaries. |
April 2009
Vol. 46, No. 4
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The New Mandatory Medicare Secondary Payer Reporting Rules: What Administrators of Multiemployer and Multiple Employer Group Health Plans Need to Know
by Leslye G. Laderman
Administrators of self-insured multiemployer and multiple employer plans face new mandatory quarterly reporting requirements for group health plans that cover Medicare-eligible individuals. This article explains the requirements—including registering during the month of April 2009 with the Centers for Medicare and Medicaid Services coordination of benefits contractor—and discusses challenges plans may face in complying with the new reporting process. |
February 2009
Vol. 46, No. 2
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The Credit Crisis Provides an Opportunity for Those With Dry Powder to Invest in Infrastructure Asset Class
by Michael Underhill
Notwithstanding the current credit crisis, infrastructure deals are still getting done and infrastructure funds are still raising money. Because of their long-life cash flow profile, these assets continue to be attractive to investors on several levels. Infrastructure assets have a long history of low volatility along with steady cash flows, which provide a degree of comfort in these unstable times. When investing in infrastructure, one can easily identify the most significant risk factors and control them in a straightforward manner. |
January 2008
Vol. 45, No. 1
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An Update on USERRA From the Multiemployer Perspective
by Laure van Heijenoort and William G. Walker
The effect of the Uniformed Services Employment and Reemployment Rights Act (USERRA) on multiemployer employee pension and health care plans is the subject of this Q&A. |
December 2007
Vol. 44, No. 12
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Health Care Vendor Summits Promote Integration of Services
by Michael Garrett
Plan sponsors that must deal with a plethora of health care management and wellness vendors are pushing for greater coordination and integration among vendors. This trend stems from the fact that employee populations today have a variety of health and wellness issues that require different levels of interventions, such as case management to direct the delivery of care, and disease management for those who have chronic illnesses, as well as health coaching, wellness and prevention. To improve outcomes, such as cost-effectiveness, clinical improvements for individuals served and increased satisfaction for those accessing the services, vendor integration is essential. This is particularly important for ensuring that service providers share information and commit to timely and appropriate referrals. |
November 2007Vol. 44, No. 11
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Health Savings Accounts—American Idol?
by James J. O'Connell
Consumer-driven health care (CDHC) is a 21st century change-driver that has the potential to revolutionize health care financing and the roles of both employers and employees. Out-of-control health costs and growing numbers of uninsured have fueled speculation that health savings accounts (HSAs) and CDHC will emerge as the future “stars” of U.S. health care policy. Whether CDHC wins broad workplace acceptance in the next five years, as “consumer-driven retirement" through 401(k)s caught on in the 1980s, will depend on the comfort level employers and employees ultimately have with HSAs, in the author’s opinion. This article examines current trends. |
October 2007Vol. 44, No. 10
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Six Steps for Cutting Spending for Multiemployer Self-Funded Health Plans
by David J. Gibson
Based on the analysis of multiemployer self-funded health plans across multiple markets, the author estimates that these plans spend approximately $50 per member per month more than is appropriate to provide high-quality medical services. This breaks down as $10 for ambulatory diagnostic and therapeutic services, $20 for inpatient services and $20 for provider cost shifting to the health plan. This $50 represents a 27% overpayment for health care services within the typical reactively managed preferred provider organization (PPO) or self-funded health plan. This article discusses this issue and provides six recommendations that directly address the overpayment problem. |
September 2007Vol. 44, No. 9
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Physicians and Pharmacists Collaborate at Workplace to Improve Value
by Sharon Glave Frazee, Raymond Fabius, Pamela Ryan,
Rochelle Broome and James Manfred
The burden of prescription drug costs to employers has risen precipitously over the past few decades, without evidence that it has produced better health outcomes. This has led employers, insurers, benefit plan consulting companies and the health care industry at large to use benefit changes to promote effective, lower cost options. This article focuses on one illustrative area, antibiotic prescribing, and describes an approach that improves the value of prescription drug spending through collaboration between physicians and pharmacists dedicated to serving patients at a workplace health center. This collaboration can effect real change in prescribing behaviors of physicians to optimize the quality and value of prescription drug dollars.Moving beyond pharmacy benefit management to pharmacy clinical leadership can change prescribing patterns to improve health care quality and clinical outcomes, manage costs and align health care delivery to best serve an employer’s community. |
August 2007Vol. 44, No. 8
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Automatic Contribution Arrangements in Government DC Plans
by John J. (Jamie) Kalamarides
Automatic contribution arrangements can be one step in a sound retirement plan. How does one know if an automatic contribution arrangement is right for a particular plan? This article explains automatic contribution arrangements and offers key points to consider when determining if such an arrangement is the right way to go. |
July 2007Vol. 44, No. 7
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An Overview of U.S.Health Care Reform Proposals and Employer Initiatives
by Gita K. Sharma
With health care costs consistently increasing and the uninsured and underinsured population on the rise, proposals to reform the ailing U.S. health care system have attracted the public’s attention. Policy makers at federal and state levels offer competing solutions for consideration. This article examines some of the noteworthy health care reform proposals and assesses the likelihood of reaching consensus on a solution to this mounting national crisis. In addition, the article explores employer initiatives, such as health risk appraisals and programs to manage chronic conditions. It appears that effective program designs revolve around strategies to engage employees in healthier lifestyles, identify appropriate and cost-effective intervention delivery based on the size and resources of the employer, and integrate initiatives to create a comprehensive health management strategy. |
June 2007Vol. 44, No. 6
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Creating Better-Informed Pharmacy Consumers
by Mike Medel, Ph.D.
Employee health plan sponsors that include a pharmacy benefit component face an increasing challenge with effectively educating beneficiaries due to emerging trends in consumer-focused plan designs. These plans are meant to help control rising costs, better inform beneficiaries and improve the quality of care. The most successful plans are those that provide sufficient member decision support tools that empower members while aligning health care choices with program goals. Recent surveys, however, suggest that plan sponsors are not taking adequate measures to do this. |
May 2007
Vol. 44, No. 5
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How to Comply With the Minimum Wage Laws
by Mark Cheskin and Kristen Foslid
Federal and state minimum wage laws present a multitude of compliance requirements. Liability for wage and hour violations is perhaps the highest employment law risk facing employers today. Employers must be vigilant about their payroll practices, keeping them in accord with the Fair Labor Standards Act (FLSA), to avoid a wage and hour lawsuit. FLSA does not limit its reach to large employers. In fact, all employers face potentially significant liability, given that many employers unknowingly violate FLSA. FLSA litigation often arises out of disputes concerning overtime claims, misclassification claims and off-the-clock claims. This article covers the top 12 compliance mistakes that many employers make and offers tips to avoid them. |
April 2007Vol. 44, No. 4
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Economic Analysis in ERISA Class Actions Involving Employee Investments in Company Stock
by Cathy M. Niden
Recent years have witnessed an onslaught of class action suits brought under the Employee Retirement Income Security Act (ERISA) on behalf of employee participants who invest a portion of their retirement savings in company stock. These cases typically are preceded by a decline in the market price of company stock and allege that the company, its directors, auditor and/or the trustee of the retirement plan breached their fiduciary duties to plan participants by: (1) making material misstatements or omissions concerning the true value of company stock; (2) including company stock among the investment vehicles available to retirement plan participants when the stock was an “imprudent” investment. In this article, the author discusses the similarities and differences between such ERISA class actions and federal securities class actions alleging securities fraud. This article also covers economic methodologies that can be employed to analyze ERISA class action allegations. |
March 2007Vol. 44, No. 3
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Developing Time Horizons for Use in Portfolio Analysis
by Kevin C. Kaufhold
This article provides a time-referenced perspective to portfolio analysis. Time-horizon modeling should be an integral component of any portfolio’s investment policies and practices. Risk and return take on probabilistic meanings, while asset streams must be balanced with and fund the liability streams. Instead of investment tradeoffs being limited to risk and return only, the investing experience is seen as a more sophisticated and complex mix of risk, return, time and liability concepts. |
February 2007Vol. 44, No. 2
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401(k) Plans in the Multiemployer Environment
by Ellen Mondress and Gavin M. Parr
This article briefly reviews the legal structure of multiemployer 401(k) plans, including the impact of the Pension Protection Act. Types of contributions, Tax Code limits, investments, loans and hardship distributions are discussed. The article is based on the presentation by Ellen Mondress at the Foundation’s 2006 Annual Employee Benefits Conference. |
January 2007Vol. 44, No. 1
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Currency Debate:To Hedge or Not to Hedge
by Gregory J. Chrispin
Currency risk can no longer be ignored. This article discusses the issues surrounding currency risk in Canadian pension plans and looks at ways of developing a currency policy that addresses and manages these risks. With the increasing opportunities available in global markets, this issue will take center stage in pension committees. Given the recent strength of the Canadian dollar, investors must understand the potential effects of currency movements and the elements to be considered in a currency policy. |
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December 2006
Vol. 43, No. 12
The Battle for ID Security
by Richard Kam
Identity theft and identity fraud mean any type of crime in which someone wrongfully obtains and uses another person’s individual data in some way that involves fraud or deception, typically for economic gain. Employer liability for identity theft may be growing, and human resource departments are continually implementing new protection methods.We list several strategies for protecting your employee and customer information. |
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November 2006
Vol. 43, No. 11
Prepaid Legal Services Plans
by Jacquelyn Frazier-Lyde, Robert C. Cohen, Catherine Autrey and Paul B. Himmel
Prepaid legal services plans can be an important benefit that enhances quality of life in the workplace. The plans are fringe benefit funds to which signatory employers make contributions via collective bargaining agreements. Prepaid legal services plans covered under the Employee Retirement Income Security Act of 1974 (ERISA) are considered employee welfare benefits plans and must comply with Department of Labor (DOL) regulations. The plans offer legal services that address topics from criminal matters to traffic tickets, from domestic relations matters to consumer matters. This is one plan’s story. |
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October 2006
Vol. 43, No. 10
True Transparency: PBM Cost-Control Model of the Future
by Allan Zimmerman
Some traditional pharmacy benefit management companies have attempted to define and embrace the concept of transparency. Purchasers of pharmacy benefits are beginning to recognize the value and meaning of true transparency. |
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September 2006
Vol. 43, No. 9
Retirement Horizon Looking Better Research on Plan Design, Other Trends
by Laura White
A national investment advisory firm specializing in retirement plans surveyed some of the nation’s leading authorities on employer- and trustee-sponsored retirement benefits. Survey results showed an optimistic view of the future on a range of topics, including plan design and communication trends as well as fiduciary and regulatory issues. Results run contrary to much recent research, which painted a largely dismal retirement savings forecast. |
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August 2006
Vol. 43, No. 8
Fiduciary Investment Issues in Defined Contribution Plans
by Joseph L. Paller Jr.
The recent emergence of multiemployer 401(k), profit-sharing and money purchase plans as important retirement tools has led to a reexamination of the respective roles and responsibilities of trustees, money managers, consultants, brokers and other service providers. This article reviews trustee fiduciary duties relating to DC plan investments; shielding trustees from fiduciary liability for poor investment performance; and controlling investment costs and fees. |
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July 2006
Vol. 43, No. 7
Health Insurance Premium Audits: A Cost-Cutting Solution
by Dixon Greer
A health insurance premium audit is a complete, unbiased “re-underwriting” of a company’s health care package, that reviews the underlying assumptions of risk made by the insurance carriers and examines the underwriting formulas carriers use to set a company’s premium rates. Audits find discrepancies such as math errors, incorrect or unreasonable assumptions and subjective rating practices. In today’s high-cost health care world, health insurance premium audits can provide a financially risk-free method of ensuring the best possible benefits plans at the best possible prices. |
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June 2006
Vol. 43, No. 6
Data Mining-Driven Return on Investment: Health Care Cost Management
by Howard M. Gerver and Janice Barrett
Plan sponsors can reduce or avoid future health care costs by at least 5% or 10% annually through the use of evidence-based data-mining technology. Data mining is emerging as the new health care cost-management gold standard, since most employers have exhausted traditional savings opportunities by modifying plan design, shifting costs and making health plan vendor changes. The ability to morph disparate data into actionable information through the integration of census, enrollment, Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), medical claims, mental health claims, prescription drug claims and, to the extent desired, performance and workers’ compensation claims data is becoming increasingly resource-effective with the application of relational technology. |
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May 2006Vol. 43, No. 5
Managing the Impact of GASB Statement 45
by Brian B. Murphy and Paul Zorn
Although most governments provide some form of retiree health care, very few prefund these benefits. Until recently, governments did not have to recognize long-term retiree health care costs in their financial statements. However, recent actions by the Governmental
Accounting Standards Board (GASB) have changed all that. Under GASB’s new accounting rules, state and local governments that
provide retiree health care (and other nonpension postemployment benefits) will have to measure and report the long-term costs of
these benefits in their financial statements. This article provides steps for facilitating a smooth process for complying with GASB
standards. |
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April 2006Vol. 43, No. 4
Becoming an Employer of Choice: Strategies for Worker Recruitment and Retention
by Marc R. Anderberg and Richard C. Froeschle
The demographics of the nation tell us we are getting more culturally diverse and increasingly “older,” with a large segment of “baby boomers” nearing retirement age. Already there are certain skill shortages emerging that will only be compounded as large numbers of skilled workers leave the labor force. It seems inevitable that employers will face a skills shortage in the near future. Skill shortages create a sellers’ market where employers will have to compete aggressively for the services of talented and technology-savvy workers. Human resource (HR) management practices must be adapted to sellers’ market conditions. Productivity and profits will fall among firms that can’t recruit, reward and retain highly skilled workers during the coming shortage. However, firms that become employers of choice can hold on to their market shares and remain competitive in the global economy. |
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March 2006
Vol. 43, No. 3
Lessons From the Social Security Debate
by Christian E. Weller
The debate over Social Security’s future highlighted the crucial role it plays in ensuring the basic income needs of middle-class families; it illustrated the different possible paths to improving Social Security solvency; and it raised the profile of a national debate over ways to increase retirement wealth in addition to Social Security. The outlook for its long-term finances shows no cost explosion, but rather a gradually widening gap between income and expenditures that can be addressed by a sensible combination of additional revenue and small benefit reductions. |
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February 2006
Vol. 43, No. 2
Defined Benefit and Defined Contribution Plans: A History, Market Overview and Comparative Analysis
by Stephen P. McCourt
This article describes the historical evolution of defined benefit and defined contribution plans, discusses the current utilization of employer-sponsored defined benefit and defined contribution plans, and investigates the efficacy of the two types of retirement plans. The article then highlights some potential risks in the current trends of our employer-sponsored retirement plans. |
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January 2006
Vol. 43, No. 1
Communicating With Special Audiences: Have You Met the Legal Requirements?
by Marilyn A. Monahan
An effective communication strategy requires an understanding of who makes up your audience. Does your audience include participants who are non-English speakers, seniors, visually impaired or hearing impaired? Does it include individuals with low literacy skills or education levels? These special audiences may require adjustments in your communication strategy, which could affect the content and form of your employee benefit plan communication pieces, as well as how you distribute them. This article focuses on a health plan’s legal obligations when communicating with special audiences. |
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December 2005
Vol. 42, No. 12
Investing in Private Equity
by Peter C. Arnold
Whether in Canada or the United States, private equity is an investment in a private company or a portfolio of private companies. This article gives the reader perspective on private equity, not only as an asset class but also how it integrates within a pension plan’s investment governance process.
Human Behavior: The Other Side of Controlling Drug Costs
by David J. M. Whitehouse
Understanding how human psychology and health psychology impact compliance with medication regimens and drug-related costs can control expenses and attain the best possible outcomes for patients.
Apprenticeship Programs and Federal Employment Law
by Sandra Rae Benson
An apprenticeship program is both an employer and a training institution and is therefore governed by many employment-related laws. This article provides an overview of laws affecting the most common issues that apprenticeship programs will face. |
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November 2005
Vol. 42, No. 11
Employment Law: What Every Trustee and JATC Member Should Know
by Robert E. Jesinger
A Joint Apprenticeship and Training Committee (JATC) is subject to numerous federal and state laws. JATC members should review the committee’s hiring practices and employment contracts and establish job descriptions and essential job functions for apprentices.
The Auditor’s Written Communication to Trustees
by David P. Dorsey
An auditor of an employee benefit plan is required to communicate in a management letter to the board of trustees any reportable conditions or material weaknesses found during the audit. Auditors can often make useful suggestions for operational improvements.
Advanced Bankruptcy Proceedings
by Scott Graham
Trustees responsible for collection of delinquent contributions often will deal with bankruptcy. Some of the important terms and issues that arise under Chapter 7 and Chapter 11 of the Bankruptcy Code are the automatic stay, the bankruptcy estate, liquidation and the plan of reorganization. Trustees must know their rights. Valuable information can be obtained from government Web sites. |
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October 2005
Vol. 42, No. 10
Educating Tomorrow’s Workforce: The Impact of Demographics on Training and Education
by Steve Gunderson
The workplace of today and tomorrow presents the challenges of demand, diversity and delivery. The increasing demands for worker training, the diversity in the workplace, and the delivery methods of educational and training programs will help to implement successful workforce development policies.
Disability Law Affecting Training and Education Funds
by Robert E. Jesinger
This article presents an overview of disability law as it affects training and education funds. It defines types of disability, discusses “essential functions” and differentiates them from across-the-board standards, and explains disability law regarding preemployment examinations and inquiries and reasonable accommodations in selecting and retaining apprentices.
Alternative Investments: An Introduction
by Edward D. Patchett
Alternative investments are complex and often present unique investment and fiduciary risks for trustees. This article provides a brief overview of the alternative investments class and highlights some key investment characteristics and risks associated with alternative investments. |
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September 2005
Vol. 42, No. 9
Primer on Withdrawal Liability
by Ira R. Mitzner and Stanley I. Goldfarb
Trustees of multiemployer plans have a fiduciary duty to understand and collect withdrawal liability, monitor the plan professionals that provide advice and counsel, make the decisions for their plans and assume responsibility under Employment Retirement Income Security Act of 1974 (ERISA).This article helps trustees and administrators carry out their responsibilities.
Japan—Is the Sun Finally Rising?
by Patricia A. Croft
If Japan, the United States and China form a team that drives the world economy today, Japan is the financier of the team.This article looks at Japan’s economic history over the past 60 years, highlighting its real estate and stock market bubble of the 1980s; examines the aftermath of the bubble; and asks “what we can learn” from Japan’s experience.
Union Self-Directed Annuity Plans: Present Trends and Future Directions
by Edmond F. Ryan
Trustees who manage retirement plans for union members have the financial future of every union member in their hands. Trustees, especially those recently elected, need to understand the basics of pension plans and the reasons for benefit trends. |
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August 2005
Vol. 42, No. 8
Canadian Labour and Employment Law: An Introduction
by Stewart D. Saxe
In Canada, employment relationships are most often governed by provincial laws. There are federal statutes governing private sector employment relationships, but they apply only to work that falls within the legislative authority of the Federal Parliament, such as banking and interprovincial transportation. This article discusses the nonunion employment relationship, termination of the employment relationship, written employment agreements and other provincial legislation.
Avoiding Imminent Minimum Funding Violations for Multiemployer Plans
by Lee A. Trucker
Pension plans must satisfy certain “minimum” funding standards under the Internal Revenue Code and ERISA. This article explains the three principal ways provided by the Code to avoid, or at least delay, an imminent violation. Trustees or professionals of multiemployer plans should consider the practical implications of each method on the plan, the participants and the bargaining parties.
Skilled Trades Mentoring
by Howard Hipes and Ann Marinoni
Mentoring is an investment in workers, rather than an expense. A mentor program is a strategic plan to cultivate and retain skilled craftworkers. This article describes such a program within a union local that was formed with the assistance of a state university. |
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July 2005
Vol. 42, No. 7
Developing a Fraud Policy
by Lawrence R. Beebe
To meet the requirements of today’s business world, benefit plans will find it necessary to spell out and document certain basic procedures, such as a plan fraud policy statement. Such a statement helps create an atmosphere of honesty and ethical behavior and provides a thorough understanding of expectations of those working for or doing business with the plan.
The Pharmacist: Partner in Providing Health Care Benefits
by Ellena A. Anagnostis and Kimberly D. Griego
The objective of this article is to show the evolving role of the pharmacist, whose expertise can lead to improved patient outcomes while decreasing health care costs. The work between a pharmacist and an International Brotherhood fo Electrical Workers (IBEW) local union, as well as other studies, demonstrate a unique approach.
Apprenticeship and Training Funds: Legal/Fiduciary Issues
by Harold G. Korbee
This article focuses on the legal and fiduciary issues arising out of the establishment, maintenance and administration of apprenticeship and training funds and the impact of ERISA on trustees who administer such funds. With due diligence and good recordkeeping, most apprenticeship programs can avoid the expense and potential damages involved in the litigation process. |
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June 2005
Vol. 42, No. 6
Selecting and Monitoring Investment Professionals
by Rory Judd Albert
ERISA imposes a variety of technical and, in some cases, extremely complex rules with which employee benefit plan fiduciaries must comply when investing ERISA plan assets. These rules are applicable to all plan fiduciaries responsible for effectuating or monitoring ERISA plan assets including, among others, boards of trustees of collectively bargained plans; boards of directors of corporations sponsoring ERISA-covered plans and plan administrators, as well as investment; managers, investment consultants, broker-dealers, banks, custodians and similar financial institutions. If you are one of these, it behooves you to obtain at least a rudimentary understanding of ERISA’s fiduciary responsibility rules, burgeoning regulations and evolving unique case law. This article addresses salient legal issues confronting plan fiduciaries today in connection with the investment of employee benefit plan assets. |
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May 2005
Vol. 42, No. 5
The Brave New World of Deferred Compensation
by Jay Dorsch, Karen E. Gelula and Paul M. Ritter
The American Jobs Creation Act of 2004 established a new tax regime for nonqualified deferred compensation arrangements, effective January 1, 2005. Until the act, there was a general consensus as to the tax treatment of nonqualified deferred compensation arrangements except, perhaps, for arrangements that were on the outer edge of common practice. Under applicable tax rules and doctrines prior to the act, there was substantial flexibility in designing, funding and operating nonqualified deferred compensation arrangements. The act added Section 409A to the Internal Revenue Code and imposed strict new requirements that such arrangements must satisfy in order to avoid Draconian tax consequences and penalties. This article will first provide a summary of the tax rules and doctrines applicable to deferred compensation practices that led to the provisions of the act. It will then provide an overview of the major aspects of the new rules, taking into account Notice 2005-1. |
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April 2005
Vol. 42, No. 4
New Pharmacy Benefit Strategies for Union Trusts
by Sheela Andrews
Developing attractive and affordable pharmacy benefit programs has become a significant challenge for union trusts today. Issues such as collective bargaining and demands from members for access to a wide array of prescription drugs are coming into conflict with the reality of rising pharmacy costs and the difficult job of managing union resources. What’s more, external issues such as the growth of consumerism, Medicare legislation and uncertainties over pending legislation serve to further complicate the task of developing cost-efficient and member-attractive pharmacy benefit programs. While the current health care environment is challenging, there are steps plan sponsors can take to ensure their pharmacy benefit program is focused on securing the best outcomes at the lowest possible cost and still keep union members satisfied with their benefit. |
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March 2005
Vol. 42, No. 3
Creating Benefit Value Statements
by Dennis R. Ackley
Many employees do not understand the fundamental economics of employer-sponsored, self-funded health plans. They may think “insurance” pays the costs of health care, when costs are actually paid by the employer and employees themselves. Benefits statements need to show employees the value of their benefits, not just the estimated individual cost to employees—which could lead to unintended consequences. Statements should also shatter the “insurance illusion” and tell employees what they can do to help control the medical plan’s costs. |
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February 2005
Vol. 42, No. 2
Making 401(k) Plans a Win-Win Proposition: Getting Participants to Help Themselves and Fiduciaries to Fulfill Their Responsibilities
by Richard D. Glass, CEBS
401(k) plan fiduciaries and providers may face countless lawsuits in the future as participants realize that their 401(k) accounts are not large enough to provide them with the retirement lifestyle they have anticipated. Plan sponsors, plan fiduciaries and service providers themselves will be the cause of many of these lawsuits, because they have not presented to employees a realistic picture of what it takes to achieve the retirement lifestyle of their dreams. This paper discusses the actions that should be taken to minimize the risk of such lawsuits and also help participants achieve financial security. Plan sponsors must tell their participants the whole, hard truth— Employees, not employers, are responsible for their retirement security and must make full use of their 401(k) plans.
Exploring Retiree Benefit Plans
by Brian Freiberg
How are many employers that want to offer retiree health plans doing so in light of increased expense? The good news is that employers now have additional means of controlling expenses, thanks in part to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. |
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January 2005
Vol. 42, No. 1
Workers’ Compensation Managed Care Pharmacy Benefit Program: Cost Savings
by Shadi Saleh and Stephanie Washington
The burden of prescription drug costs to the workers’ compensation (WC) program is increasing. This article is a followup to an article in the December 2003 Employee Benefits Journal. It reports on a study of New York State government employees who filed workers’- compensation-related prescription drug claims through a recently established WC/managed care prescription drug benefit: ONECARD Rx. Study results showed that the use of ONECARD Rx produced total cost savings of $322,067 ($48.04 per claim) in 2002. Integrated WC/managed care prescription drug programs have the potential to produce significant cost savings for employers. |
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December 2004
Vol. 41, No. 12
The Next FronTIER in Tiered Pharmacy Plan Design
by Glen Stettin
Multitiered pharmacy plans can provide financial incentives for plan members to choose lower cost prescription drug options. The next frontier in plan design is beyond the third tier, in some cases reaching six tiers or more.
Class Action Suits Are Changing the Pension and Benefits Landscape in Canada
by Murray Campbell
Litigation has become a fact of life for pension and employee benefit plan administrators and sponsors since the mid-1980s, and the scope and frequency of such litigation is increasing. This paper examines this increase and comments on the related role of class action legislation. |
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November 2004
Vol. 41, No. 11
Institutional Investors, Shareholder Activism and Class Actions: The Preservation of Market Integrity
by Dimitri Lascaris
Recent developments in the capital markets have caused an erosion of investor confidence. The ability of securities regulators to restore investor confidence is limited by regulatory resources. In this context, a private right of action is an indispensable means of enhancing investor protection and restoring investor confidence. Moreover, fund managers are subject to a duty of reasonable care which, in appropriate circumstances, may oblige them to prosecute claims against violators of the securities laws. In the global economy, class actions are frequently the optimal method of procuring a remedy for large groups of parties who have been damaged in similar ways. Because of their size and sophistication, institutional investors are particularly well suited to act as lead plaintiffs and to prosecute class-based claims on behalf of aggrieved investors. |
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October 2004
Vol. 41, No. 10
Background Checks in Hiring and Compensation: The Next Generation
by Doug Eisenschenk and Elaine Davis
Concern over workplace security has increased since September 11 and the emergence of corporate corruption scandals. Background checks are more common as employers increase the rigors of screening. Until recently the process of completing a background check has been manual and time-consuming. Screening processes are now conducted through technical applications integrated with enterprise system providers and allow organizations to make better hiring decisions. | |
September 2004
Vol. 41, No. 9
Chronic Disease Management in a Taft-Hartley Indemnity Plan: An Overview
by Susan Manning
One plan's story of how a mobile health-screening program evolved into a chronic disease management program, helping members live with diabetes and heart disease. Patient-driven and clinically managed disease management programs can provide significant return on investment in quality of life and in clinical and economic outcomes. This article is based on Susan Manning's presentation at the Foundation's Trustees and Administrators Institute held in February 2004 in Orlando, Florida. |