Retirement Security in a Post-FASB Environment

March 1992
EBRI Issue Brief #124 | Special Report SR-15
Paperback, 21 pp.
PDF, 234 kb
Employee Benefit Research Institute, 1992

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Executive Summary

  • Employers want flexibility to manage their finances—including the power to terminate plans if the expense becomes financially crippling; employees want security—they want to receive benefits they have been promised. —Charles C. Morgan, Prudential Asset Management Co.
  • Companies have found they are no longer in the business of merely making widgets. They are in the business of making widgets and also in the (health) insurance business. —William Reimert, Milliman & Robertson
  • I think we are heading toward a new definition of necessary benefits, or a core set of benefits, that employers are going to be willing to provide, and those are the predictable ones, the capped ones, and more manageable for them. —Meredith Miller, AFL-CIO
  • FAS 106 put truth in packaging, but perhaps an unintended effect has been the taking away of benefits that might not otherwise have occurred at the same point in time. —David Skovron, Kwasha Lipton
  • The financial impacts associated with changes in retiree health benefits are likely to be quite small. The increased annual expense to retirees, resulting from retiree health benefits cost-shifting, will average only $257 a year. —Christopher J. Ruhm, University of North Carolina at Greensboro
  • Market analysts generally had figured a company's retiree health care liabilities at 10 to 15 times its current annual pay-as-you-go expense. Announcements to date, however, show this number seems to be misleadingly low. The true figure could be 20 times or more. —Douglas J. Elliott, J.P. Morgan
  • It would be real difficult, real difficult for any prefunding tax incentives to pass in the next couple of years. A lot of folks would feel that if we're going to spend the precious federal dollars that we have, it's better off trying to increase access to the people who do not have health care coverage, and/or trying to reduce the overall cost of the system. —Rick Grafmeyer, Senate Finance Committee
  • Retiree health coverage purchased, at the employer's discretion, with prefunded amounts attributable to employer contributions under a VEBA or a 401 (h) retiree health account qualifies as employer-provided coverage under (IRC) section 106. —Harry J. Conaway, William M. Mercer, Inc.
  • There is a fundamental problem with how we provide health care to retirees in this country, which warrants systemic reform. Worrying about funding takes us off on the wrong track. —David Hirschland, United Auto Workers of America