Author: Site Staff

Western Union Financial Services Inc. will make a $4.1 million cash contribution to its defined-benefit plans, under an agreement with the Pension Benefit Guaranty Corp., according to a news release from the pension insurer.

Under the agreement, Englewood, Colorado-based Western Union will make the contribution—in addition to any other required payments—to its plans by September 11, according to the release.

The PBGC said in the release that the agreement was made because ERISA requires the agency to seek additional protection when more than 20 percent of a company’s employees covered by a pension plan lose their jobs at a company facility. Western Union shut down a call center in Bridgeton, Missouri, on August 7, 2008, resulting in 153, or 44 percent, of the call center’s 351 employees losing their jobs.

“Under the agreement, Western Union is putting more money into the plan for the benefit of participants and to reduce risk to the PBGC insurance program by enhancing the plan’s financial health,” the news release said.

Steve Gawlik, a Western Union spokesman, said the company did not release the total assets in its two defined benefit plans, which he said are frozen.

According to a company 10-Q filing with the Securities and Exchange Commission, Western Union’s two plans had unfunded pension obligations of $107.1 million as of December 31.

According to the 2009 Money Market Directory, one of Western Union’s defined benefit plans had assets of $357 million as of December 2007, while the other had assets of $28 million as of September 2007.

Along with the $4.1 million contribution, the SEC filing said the company estimated it would be required to contribute $25 million to the plans in 2010.

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Federal health care reform legislation is ailing, but experts and observers say it’s far from dead.

When the health care reform drive began early this year, Obama officials and Democratic congressional leaders brimmed with optimism.

They predicted fast congressional action, with the House and Senate approving bills by the August recess, differences in those two bills being ironed out during the break and a final measure going to the president by mid-September or early October.

Although President Barack Obama last week predicted such legislation will pass Congress by year’s end, the reform drive still seems to be in trouble, Washington observers say.

The House has yet to take up a bill already approved by three House committees.

In the Senate, the pivotal Finance Committee has struggled for months to hammer out a package that will attract support from at least a few of the committee’s Republican members, with no sign of an imminent agreement. Until that committee acts, the full Senate can’t take up a bill.

Meanwhile, public support for reform legislation has slipped. A poll earlier this month by the Kaiser Family Foundation found that just 45 percent of respondents believe the U.S. would be better off if Congress passes reform legislation, down from 51 percent a month earlier.

At the same time, some congressional backers of reform legislation were shouted down during town hall meetings during the past few weeks.

‘Something will pass’
Despite the delays in congressional action and rising public concerns, Washington observers and others say the reform effort is far from dead.

“In the end, a version of reform legislation will pass. There is too big a risk to both sides” if a bill isn’t approved, said Frank McArdle, a consultant in the Washington office of Hewitt Associates Inc.

“The Democrats will be perceived as being unable to deliver, while Republicans will be portrayed as obstructionist,” McArdle said.

“At the end of the day, something will pass,” said Chantel Sheaks, a consultant with Buck Consultants in Washington.

“Reform is very much alive, but we are far from knowing the final outcome,” said Kathryn Wilber, senior counsel-health reform with the American Benefits Council in Washington.

But a final bill is likely to be significantly different and slimmed down from the one approved by the House panels and the Senate Health, Education, Labor and Pensions Committee.

“We are going to see a scaling back,” said Steve Wojcik, vice president of public policy with the National Business Group on Health in Washington.

The most likely provision to be scaled back is setting up an optional public health care plan.

Establishing such a plan—dubbed by former Vermont Gov. Howard Dean as Medicare for the nonelderly—has stoked fears that it would drive out private plans and ultimately lead to a single-payer system. Some say it is certain that the provision will be revamped, if not eliminated.

“The idea of a public plan option has been pretty much ended,” Wojcik said.

Others see nonprofit health care cooperatives replacing a public health plan in the reform legislation.

“If I were a betting man, I’d see co-ops as a compromise” proposal that could win congressional passage, said Michael Thompson, a principal with PricewaterhouseCoopers in New York.

Buck Consultants’ Sheaks said one scenario that could develop is Congress passing insurance underwriting reforms and possibly an individual coverage mandate this year, leaving tougher issues for next year or later.

Such reforms, which have no serious opposition, could include a ban on excluding pre-existing medical conditions in the personal lines market. Congress in 1996 curbed the use of such exclusions, but only in the group market, as part of a broader law.

Provisions may fail
Other reforms legislators might embrace include guaranteed issue and renewals.

At the same time, provisions now in the bills that are not directly related to health care reform might be discarded as legislators move to slim the measures and defuse business opposition. Some provisions include making it more difficult for employers with retiree health care to reduce benefits, expanding COBRA health care continuation coverage and giving states the ability to create single-payer systems.

“In order for a bill to be successful, it will have to be one that is more moderate and be something that employers will feel comfortable with,” McArdle said.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The Equal Employment Opportunity Commission can proceed in a case it filed on behalf of two women who claim they were terminated after reduction-in-force assessments at the Boeing Co. because of sex discrimination, says a federal appeals court in a ruling that overturns a lower court’s opinion.

The 9th U.S. Circuit Court of Appeals also held in its decision Tuesday, August 18, in Equal Employment Opportunity Commission v. The Boeing Co. that one of the plaintiffs could proceed with her retaliation claim.

According to the decision, plaintiff Antonia Castron worked in the electrical engineering department at Chicago-based Boeing from 1997 until 2003. Her supervisor “frequently made negative comments about women,” but refused her request to transfer to a particular work group, the opinion says.

Instead, he eventually transferred her to another group that “required substantially different skills” than the ones used at her previous post. Furthermore, the supervisor at her new group referred to her as a “little girl,” according to the opinion.

Two months after her transfer, she was given low scores in a reduction-in-force evaluation and terminated.

Based on the supervisor’s comments, “a jury might reasonably infer that [his] decision to transfer Castron, rather than a male co-worker about whom she complained, to a new position where her job was less secure may have resulted from improper motivations, including discriminatory intent, retaliatory intent or both,” the decision says. The supervisor may have “deliberately set Castron up to fail,” it said.

Similarly, after Boeing substantiated plaintiff Renee Wrede’s complaint of sexual harassment by her direct supervisor, she was transferred to another group. Although several men subsequently received lower evaluations, she was the only one to be terminated in a reduction in force.

A jury also could reasonably conclude in Wrede’s case that her discharge “resulted from discrimination on account of sex,” says the opinion, which remands the case for further proceedings.

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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