Two years ago, the government employer s

Transcription

1 GASB 43 & 45 OPEBs New Problems, Old Solutions? By Lawrence L. Bell Two years ago, the government employer s version of Financial Accounting Standards (FAS) and International Accounting Standards (IAS) required that the funding for retiree health care be shown on the government organization s books. There are 85,000 state and local government employers, and 77 percent of these employers provide post-retirement employee benefits (OPEB). s have traditionally not funded these benefits while the employees have earned them. This pay-as-you-go approach has created hundreds of billions of dollars in unfunded retiree health care liabilities. The growing health care fiscal imbalance is a focus of much to do in the private sector with the cut backs and layoffs in the automobile manufacturers and bankruptcies in the airlines industry. General Motors and Ford recently announced the legacy cost for health care is $1,275 per car. The most recent GM annual report (in footnote 16) reported that there is a $57 billion short-fall in its retiree health care plans. These facts heighten the need for local and state government (LSG) employers to address the problems head on. The new Government Accounting Standards Board (GASB) Statement No. 43 and 45 Accounting and Financial Reporting by s for Post-Employment Benefits other than Pensions (OPEB) requires transparency in reporting. This 2004 standard requires governmental employers to account for post-retirement healthcare benefits on an actuarial basis during the employee s working life instead of on a pay-as-you-go basis during retirement. While Lawrence L. Bell, J.D., LTM, CLU, ChFC, CFP, AEP, is a Principal at Advisors, LLC in Kensington, Maryland. He can be reached at larrybell@theuniquesolution.com. The new standard is intended to address concerns that the previous accounting rules were not transparent and obscured the magnitude of government employers financial obligations. these rules apply only to government employers, they are very similar to the rules (and principals) generated by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) in FASB 106 and IASB 19. In the United States, the tax accounting rules also follow this approach with 419A(c)(2) indicating benefits should be funded over the working life of the employees. The courts have also followed this approach in Wells Fargo. 1 The new standard is intended to address concerns that the previous accounting rules were not transparent and obscured the magnitude of government employers financial obligations. In the earlier standards, the funded status of post-retirement obligations was not disclosed and was not recognized on the financial statements. These new accounting standards will affect a tremendous number of government employers and plan participants. The majority of public plans provide health benefits for retirees. Sixty-six percent of large public employers provide coverage to retirees under age 65 and 55 percent provide coverage to retires 65 or older. The cost of these benefits will only grow. In a WASHINGTON POST report on retiree medical coverage, liabilities in Washington Metropolitan jurisdictions are as follows 2 : Maryland: $20 Billion Montgomery County: $2 Billion Howard County: $400 Million Charles County: $50 Million Calvert County: $33 Million Virginia: $5 Billion Fairfax County: $826 Million Alexandria: $80 Million Washington D.C.: $509 Million JOURNAL OF RETIREMENT PLANNING 29

2 GASB 43 & 45 OPEBs New Problems, Old Solutions? Chart 1A Comparison of Alternatives Key Features PayGo VEBA 401(h) HSA COLI Asset Management Non- Administration Agency Participation Participation Generally mandatory for covered employees Substantiation Administrative None Trustee may manage assets Participants may direct accounts Combination None Entity may establish and administer one VEBA on behalf of participating agencies None Mandate probably requires state law change Generally mandatory for covered employees May limit covered carriers, Trustee may manage assets Participants may direct accounts Combination Entity managing pension plan may establish and administer 401(h) account on behalf of participating agencies Mandate probably requires state law change Generally mandatory for covered employees May limit covered carriers, Accounts owned by participant and are portable; asset management by authorized employee Entity can offer HSAs through a qualified financial institution, employees must enroll in HDHPs (through employer, individual market, etc.) but little or no mechanism for control or uniformity Mandate probably requires state law change Election of HDHC Plan (i.e., difficult or impossible to mandate) owned selects investment OPEB Bond 115 Trust* owned selects investment Accounts beneficially owned by participant and maybe portable; asset management by authorized employer Yes or No No Entity can offer HSAs through a qualified financial institution, employees must enroll in HDHPs (through employer, individual market, etc.) but little or no mechanism for control or uniformity Mandate probably requires state law change Mandate probably required check state law Mandate probably required check state law 115 Trust & OPEB Bond* Same as 115 plan Yes or No Mandate pbably required check State law Mandatory Mandatory Mandatory Mandatory None None None May limit covered carriers, IRR 2% 8% 8% 2% 2% Net 3% 8 % 15+% Legal Basis 104 Covered Expenses Health care as specified under Code Sec. 213 * U.S. Patent #6,609, (c)(9) Health Care as specified under (h) , 72, 101 Health Care as specified under 213 Health Care as specified under IRC 213 (allowable premiums limited to COBRA, LTC, Medicare A, B, D and employer s Medicare retiree plan) Health Care as specified under IRC Health Care as specified under 115, 223, 72 Health Care as specified under , 115, 223, 72 Health Care as specified under Code Sec

3 Chart 1B Comparison of Alternatives Key Features PayGo VEBA 401(h) HSA COLI OPEB Bond 115 Trust* Permitted Contributions Limit on Contributions Tax Treatment of Earnings Tax Treatment of Health Benefits Tax Treatment of Payments After Death of Retiree -Pre-tax Pretax Employee (discretionary) - After-tax Employee (mandatory) Pre-tax (salary givebacks can essentially convert employee contributions into pre-tax employer contributions Qualified Asset account limitation 419A None None for governmental entities (should obtain legal opinion before implementing unlimited contribution feature) Pretax Employee (discretionary) Potentially pretax (analogous to service purchase) Employee (mandatory) Pre-tax (salary givebacks can essentially convert employee contributions into pre-tax employer contributions) 25% of total Pension Plan contributions for each year (cannot contribute if pension is overfunded and no contributions are made to pension plan. Pre-tax Employee - Pre-tax via payroll deduction - After-tax otherwise but deductible on tax return Annual limit based on HDHC Plan (indexed) Individual Min. $1,000 - Max $2,600 Family Min $2,000 - Max $5,150 After-tax Employee After-tax None Underwriter s Review NONE Pre-tax Employee (discretionary) Pre-tax Employee (mandatory) Pre-tax Portion of pay Flat amount Unused leave (all or fixed portion) Unused vacation (all or fixed portion) Profit Sharing 115 Trust & OPEB Bond* None None Underwriter s Review Tax-Free UBTI Tax-free Tax-free Tax-free Tax-Free Tax-free Tax-Free 213 No continuing benefit *U.S. Patent #6,609, Tax-free Tax-free 213 Account may be used for dependents medical taxfree; benefits to other beneficiaries are taxable Account may be used for dependents medical tax-free; true death benefit not available Account may be transferred to spouse taxfree; transfer to other dependents taxed at normal rate (but no 10% excise) Account may be transferred to spouse tax-free; transfer to other dependents taxed at normal rate (but no 10% excise) 213 Account may be used for dependent medical tax-free; benefits to other beneficiaries are taxable Tax-free Tax-Free Account may be used for dependents medical tax-free; benefits to other beneficiaries are taxable Account may be used for dependents medical taxfree; benefits to other beneficiaries are taxable JOURNAL OF RETIREMENT PLANNING 31

4 GASB 43 & 45 OPEBs New Problems, Old Solutions? These numbers were previously not reported as the responsibility of the local and state governments. These liabilities are now required to be factored into the costs of the OPEB plans. The process of determining how much should be set aside currently to provide for future benefits has to be based on many assumptions. The valuation must take into effect the historical experience, the amount of resources necessary in the future to finance the agreed upon healthcare benefits. The factors include but are not necessarily limited to: how many employees a government employer is expected to have that will qualify for healthcare benefits; how long participants are expected to work for the government employer; how long the participants are expected to live after retiring; how much healthcare costs are expected to increase; and how large a return on investments a government employer shall receive on its investments. Making these calculations and determining how much should be contributed will ensure that an adequate amount of resources is available in the future. The economic and demographic considerations should then be discounted to their present value to determine the amount of money to be set aside now to meet the contingencies that will occur. In line with reasonable, accepted actuarial principles, the actuarial present value will be spread over the working life of the participants in the plan. This approach is called normal cost. The portions allocated to the remaining years of employment are future normal costs. There are Chart 2 Comparison of Forecasted Annual Required Contributions Computed Under Discount Rates of 8% and 2% to the Pay-As-You-Go Amounts $ (millions) The process of determining how much should be set aside currently to provide for future benefits has to be based on many assumptions many different methodologies an actuary can chose to determine how to measure the OPEB plans: OPEB Liability. In order to determine the plan s funding goal, there must be a realization of what has already been earned Fiscal year ending in as well as what benefits are expected to be earned. Government employers have promised OPEBs for many years before GASB 45 required the benefits to be actuarially determined. The actuarial present value calculation that is allocated to previous years of employment is the actuarial accrued liability (AAL). OPEB Assets. To the extent the OPEB plan has cash, insurance and investments, it is considered funded by the AAL. These assets are directed to fund the actual accrued liability. For financial reporting purposes, gains and losses in plan assets are averaged over many years. This issue has been reviewed in light of FAS and IAS experience so the period is now a matter of years, usually three to five, not 10, 20 or 30 years. This is due to the volatility of the benefit costs and market fluctuations. Unfunded Liabilities. The excess of the liabilities over the pan assets is the unfunded actuarial 2% discount rate 8% discount rate Benefit payments (= pay-as-you-go amount) 32

5 accrued liability. Under GASB 45 the unfunded liability will be spread over a period of up to 30 years in level amounts or level percentages of projected payroll. Similar to qualified asset accounts in welfare benefit plans, the contributions should be funded in substantially similar amounts over the working lives of the participants. Most government employers use this approach when reporting their pension benefits as experienced in other situations. OPEB Contributions. The current costs and the catch-up costs to be spread out over the working lives make up the annual required contributions (ARC) of the government employer for the reporting period. The ARC is actuarially determined under GASB 45 so if continually paid, it will provide sufficient funds to pay for participants benefits. Each year is spread out or smoothed. The government employers contributions may go directly to or for retirees, premium payments to insurers, and transfers to a Special Purpose Government Trust. The Special Purpose Government Trust provides healthcare benefits to retirees in accordance with the terms of the plan. If irrevocable, the benefits will be legally protected from creditors of the government employer and plan administrator or trustee. The trust then will secure the interest of the retirees. OPEB Expenses and Obligations. The that the plan occurs will either be an expense if it is a single government employee plan or if there is a cost sharing multiple employer arrangement there will be a reduction in the contractually required contributions. Consistent with these actuarially measured tools, the government employers will accumulate funds to pay the future costs of retiree health insurance coverage and medical benefits. The funds will offset the present value of the future liability and the goals will be met. Similar to retirement plans, retiree OPEB plans can be funded on a defined contribution or a defined benefit approach. Defined benefit arrangements, which are common under most payas-you-go plans, require the government employer to commit to provide the benefit regardless of the cost of the benefit or the length of providing the benefit The effect of GASB 43 & 45 will generate both real cost savings from investment earnings and more favorable liability calculations. (the participant s life). In line with these funding measures, there are a number of different ways to pre-fund benefits: Health Reimbursement Account (HRA). HRAs are accounts maintained by the government employer on behalf of their employees. The tax code does not permit HRAs to receive employee contributions. But mandatory employee contributions can be reclassified as employer contributions and it will qualify. The employer maintains ownership of the funds in its account. In this manner the HRAs could be the source of funds in a defined contribution type retiree health benefit plan, or additional source of funds for the defined benefit approach. Voluntary Employee Benefit Association (VEBA). VEBAs provide tax-deferred contributions to a trust account on behalf of the employee. The VEBA can also be the recipient of an employee cashing out their accumulated leave or sick pay upon retirement or VEBAs may be funded under Code Sec. 419A over the working life of an employee in substantially equal payments. While the deductibility of the contribution to a VEBA by a government employer is of no benefit to the government employer, the ability to expense the cost of a future benefit by the government employer to the taxpayers is a fiscal plus. Health Savings Account (HSA). An HSA is an individual health spending account that is owned by the employee and may be used for the payment of current and future medical, or as retirement funding. Income. An ancillary requirement of an HSA is that it must be coupled with a high deductible health plan. This may prevent the use of an HSA as a pre-funding vehicle directly tied into a GASB qualifying approach. 401(h) Pension Funds. A government employer may fund retiree health benefits in sync with a qualified plan. The retiree health benefit portion is a separate account under the pension plan. Through a separate account all of the administration, investment management and record keeping are performed by the pension plan thereby avoiding the need to create a separate JOURNAL OF RETIREMENT PLANNING 33

6 GASB 43 & 45 OPEBs New Problems, Old Solutions? Chart 3 Forecast of Funding and GASB Expense Under a Discount Rate of Two Percent Fiscal Year Ending in Amortization of the Unfunded Actuarial Liability Annual Required Contribution (Expense) retiree health plan. Up to 25 percent of the government employer s pension contribution can be designated for the retiree health benefit account Special Purpose Governmental Trust ( 115). A special purpose trust can be used to designate funds for employee, dependent and retiree health insurance and. The trust can be funded and operated similar to a VEBA or pension trust. The use of a special purpose trust will accelerate the accounting and balance sheet benefits to the government employer of the plan and further assure the participants of the benefit of the plan. By using a trust vehicle, the LSG employer is permitted to use a more attractive discount rate so Pay-As-You-Go Cost (Projected Benefits) Normal Cost (Service Cost) Difference 2005 $72,705,377 $23,893,312 $96,598,689 $13,695,117 $82,903, ,340,646 25,087, ,428,623 17,908,149 83,520, ,157,678 26,342, ,500,054 19,925,148 86,574, ,165,562 27,659, ,825,057 21,801,367 90,023, ,373,840 29,042, ,416,310 24,199,409 93,216, ,792,532 30,494, ,287,125 27,567,094 95,720, ,432,159 32,019, ,451,482 31,411,629 98,039, ,303,767 33,620, ,924,056 34,984, ,939, ,418,955 35,301, ,720,258 38,053, ,667, ,789,903 37,066, ,856,272 40,415, ,441, ,429,398 38,919, ,349,085 42,796, ,552, ,350,868 40,865, ,216,539 45,559, ,656, ,568,411 42,908, ,477,366 48,532, ,944, ,096,832 45,054, ,151,235 51,767, ,383, ,951,674 47,307, ,258,797 55,106, ,152, ,149,258 49,672, ,821,737 58,119, ,701, ,706,721 52,156, ,862,824 60,954, ,908, ,642,057 54,763, ,405,965 63,488, ,917, ,974,160 57,502, ,476,264 66,090, ,385, ,722,868 60,377, ,100,077 68,982, ,117, ,909,011 63,396, ,305,080 71,653, ,651, ,554,462 66,565, ,120,335 74,621, ,498, ,682,185 69,894, ,576,351 77,345, ,231, ,316,294 73,388, ,705,169 80,026, ,678, ,482,109 77,058, ,540,427 82,518, ,021, ,206,214 80,911, ,117,448 84,979, ,137, ,516,525 84,956, ,473,321 87,825, ,648, ,442,351 89,204, ,646,987 90,968, ,678, ,014,469 93,664, ,679,337 93,838, ,841, ,265,192 98,348, ,613,303 96,446, ,167, ,228, ,228,452 99,053, ,174,762 that the impact on the balance sheet is substantially curtailed. If the government employer uses a pay-as-yougo approach, then the expensing is only out of pocket so there is no assistance against the accruing liability. The net effect to the governmental employer is that by using the pay-asyou-go approach they reflect as much as a 300-percent greater liability than using the pre-funding methodology. There are additional benefits as shown on the Schedule. The balance sheet effect on Bond Ratings Agencies should not be dismissed. Bond rating agencies will take into account any unfunded liability when assessing the financial conditions of any government entity. In December 2004 Standard & Poor s, the largest rating agency stated in their report: The new reporting may reveal cases in which the actuarial funding of post-employment health benefits would seriously strain operations, or, further, may uncover conditions under which employers are unable or unwilling to fulfill these obligations. In such cases, these liabilities may adversely affect the employers creditworthiness. All Standard & Poor s rated employers will be monitored closely in terms of their reporting under GASB 45. Upon implementation of these new standards, we will include the new information as part of our ongoing analytical surveillance of ratings. 34

7 Chart 4 Forecast of Funding and GASB Expense Under a Discount Rate of Eight Percent Fiscal Year Ending in How the Obligation Can Be Reduced Amortization of the Unfunded Actuarial Liability Annual Required Contribution (Expense) The government employer should consider a number of mitigation steps with risk management techniques and pre-funding tools. Defined benefit OPEB plans are plans that specify the benefit to be provided in dollars or as a type or level of coverage at or after separation of employment. Defined contribution OPEB plans are more like a profit sharing or 401K plan as they (1) provide for individual accounts for each covered employee, and (2) give instructions as to how each covered employee s account is to be determined. As with a 401(k) plan, the benefits are what are in the covered employee s account. GASB Pay-As-You-Go Cost (Projected Benefits) Normal Cost (Service Cost) Difference 2005 $17,922,551 $20,651,129 $38,573,680 $13,695,117 $24,878, ,818,679 21,683,685 40,502,364 17,908,149 22,594, ,759,613 22,767,870 42,527,483 19,925,148 22,602, ,747,594 23,906,263 44,653,857 21,801,367 22,852, ,784,974 25,101,576 46,886,550 24,199,409 22,687, ,874,223 26,356,655 49,230,878 27,567,094 21,663, ,017,934 27,674,488 51,692,422 31,411,629 20,280, ,218,831 29,058,212 54,277,043 34,984,539 19,292, ,479,773 30,511,123 56,990,896 38,053,230 18,937, ,803,762 32,036,679 59,840,441 40,415,110 19,425, ,193,950 33,638,513 62,832,463 42,796,123 20,036, ,653,648 35,320,439 65,974,087 45,559,724 20,414, ,186,330 37,086,461 69,272,791 48,532,939 20,739, ,795,647 38,940,784 72,736,431 51,767,603 20,968, ,485,429 40,887,823 76,373,252 55,106,621 21,266, ,259,700 42,932,214 80,191,914 58,119,923 22,071, ,122,685 45,078,825 84,201,510 60,954,459 23,247, ,078,819 47,332,766 88,411,585 63,488,260 24,923, ,132,760 49,699,404 92,832,164 66,090,978 26,741, ,289,398 52,184,374 97,473,772 68,982,977 28,490, ,553,868 54,793, ,347,461 71,653,384 30,694, ,931,561 57,533, ,464,834 74,621,467 32,843, ,428,139 60,409, ,838,075 77,345,125 35,492, ,049,546 63,430, ,479,979 80,026,869 38,453, ,802,023 66,601, ,403,978 82,518,471 41,885, ,692,124 69,932, ,624,176 84,979,744 45,644, ,726,730 73,428, ,155,385 87,825,195 49,330, ,913,067 77,100, ,013,155 90,968,805 53,044, ,258,720 80,955, ,213,812 93,838,326 57,375, ,771,656 85,002, ,774,503 96,446,008 62,328, ,460, ,460,239 99,053,690 (21,593,451) standards apply to defined benefit OPEBs but not to defined contribution OPEB plan, as a defined contribution OPEB is considered funded, so there is no downside. The advance funding of OPEB plans provides the government employer with the ability to create an asset to offset the actuarially accrued liabilities and provide for payment of some or all of the benefits as they come due in future years. The continued contributions will create a stable fund as they are spread over the working life of the covered employees. The advanced funding of the health care liability will not reduce the health costs per se but the outcome will be more predictable because the actuarially funded benefit plans stabilize the contribution rates. Due to the dynamics of the health care industry, actuarially determined contributions to OPEB plans may be more susceptible to change than funding for pension benefits. The growth in real assets through advanced funding also will provide greater assurances for covered employees, since the growth in the funding is measurable and can be viewed by the group. As the fund grows, a greater amount of the expensing for the benefit will be reflected from the fund. This is a design component and has been the experience of pension funds in the United States since their inception. Another advantage to government employers from advance funding OPEB plans comes from the JOURNAL OF RETIREMENT PLANNING 35

8 GASB 43 & 45 OPEBs New Problems, Old Solutions? Chart 5 PaYGO VEBA 401(h) HSA COLI OPEB 115Trst Bond 115Trust&OPEB Bond Subject to Claims of Eers Creditors Yes No No Maybe Yes Yes Maybe No Pre-Tax Employee Contributions No No No No Yes No Yes Yes Death Benefit Features Yes Somewhat No No Yes No Yes Portability No Yes Yes No No No yes No Discount Rate 8% 8% 8% 8% 2% 2% 8% 12%+ IRS APPROVAL No Yes Yes Yes No No Yes Yes ability under GASB 45 to use a higher discount rate to value liabilities than under the pay-as-you-go method. The use of higher discount rates will result in lower actuarial liabilities and expense calculations. For employers that can contribute amounts greater than the annual of the current benefit, a discount rate based on the long-term expected rate of return on the OPEB plan s assets would be used. Plan assets can be invested in a portfolio of securities, qualifying insurance and other assets designed to generate a higher long-term rate of return in line with pension funds (the seven to eight percent range is prudent) when government employers with no plan assets are required to use a discount rate based on the government employer s own investments which might be in the one to three percent range. s that have some plan assets would be able to use a blended rate. The effect of GASB 43 & 45 will generate both real cost savings from investment earnings and more favorable liability calculations. As the state of Vermont s forecast, dated June 30, 2004 (see schedules), indicates using the pay-as-you-go approach is more than two and one-half times (250 percent greater) more expensive than pre-funding using the 115 trust. Some government employers may choose to fund a portion of their OPEB actuarial liability through the use of a bond offering. Local governments who are authorized by state or local statutes to issue bonds may be able to fund all or a portion of the unfunded liabilities by issuing OPEB bonds. Many jurisdictions have used this technique to issue pension bonds for the unfunded pension liability of their pension plans. Because the future liabilities cannot be accurately predicted due to the fluctuation of health care costs over a 30-year or more period, the use of bond financing will probably be one of many tools a prudent local government would institute. The local government will recognize several benefits by issuing OPEB bonds: There may be a possibility because of current low-interest rates that the total debt service payments on the OPEB bonds and the ARC over the long term will be lower than the ARC that would have been required had the OPEB bonds not been issued. Chart 6 GASB 43 & 45 Implementation Steps 1. Group of government employers want to create a joint special purpose government trust (115) to assure availability of retiree health care benefits. 2. Actuary confirms ability to use eight-percent discount rate on trust assets and requires current interest assumptions two percent on pay-as-you-go method. 3. Government employers independent advisor/actuaries(a/a) confirms validity of approach for GASB 43 & 45 compliance. 4. A/A provides measurements for funding for liabilities every two years. 5. Work with provider of products to determine life funding and investment selection model to meet current costs and fund death benefit to pay extended-future medical insurance premiums and/or. 6. File private letter ruling submission on behalf of group of government employers. 7. Institute Plan. Use special purpose group trust to reduce liabilities more efficiently. Consider group arrangements and not employer by employer. This approach reduces costs, time and energy. Consider doing it regionally (i.e., Virginia Retirement System Association of Financial Officers, Coalitions of Counties). 36

9 Chart 7 OPEB Obligation (OPEBOB) Bond Mechanics (State or Local Governments) Sells OPEBOB OPEBOB Proceeds OPEB Contributions Investment Income OPEB Benefits OPEB Repayment & Debt Service Plan The OPEB bond issue will free up general revenues of the issuer for other government uses. The returns on the retiree medical plan trust funds (VEBA or 115 trust) may exceed the interest on the bonds. However, the interest expense will become a fixed cost. Issuing bonds does not remove the risk that future unfunded liabilities will exist. It does provide for an additional smoothing of funding as opposed to payas-you-go approach.without a plan to deal with the ever-increasing costs of retiree medical plans, the rating agencies (see above) are more likely to focus on the issue. The city of Gainesville issued such bonds in July 2005 to fund an unfunded actuarial accrued liability for the local government s retiree medical plan. Conclusion A variety of options are available to local governments in addressing the mandatory compliance under GASB 43 and 45. The options extend from doing nothing and pay-as-you-go or starting now and addressing pre-funding retiree health benefits. ENDNOTES In order to comply, the government employer must do the following: The government employer or group of employers must determine what the amount of the liability is. The government employer should determine the ability to pre-fund and how much the ARC will be after current are subtracted. The government employer working with the actuaries should factor in the reduced funding requirements based upon the increased discount rate available because of pre-funding to the trust. In pre-funding the tax issues must be addressed with a letter ruling or Application for Determination Form The government employer must institute the plan. The governmental employer should obtain bi-annual actuarial certification of the assets that are available through the pre-funding. There are substantial benefits to the local and state governments to start now, both from a reporting and balance sheet perspective and also in providing more certainty to the employees that the benefits will be there as promised when promised. 1 Wells Fargo & Co., 120 TC 69, Dec. 55,037 (2003). 2 Bill Torque, Costly Change Looming for Retiree Benefits, WASHINGTON POST, Jan. 30, 2006, at B-1. This article is reprinted with the publisher s permission from the JOURNAL OF RETIREMENT PLANNING, a bi-monthly journal published by CCH INCORPORATED. Copying or distribution without the publisher s permission is prohibited. To subscribe to the JOURNAL OF RETIREMENT PLANNING or other CCH Journals please call or visit All views expressed in the articles and columns are those of the author and not necessarily those of CCH IN COR PO RAT ED or any other person. JOURNAL OF RETIREMENT PLANNING 37