EEOC issues report on the OGC's FY 2005 operations & accomplishments.  The US Equal Employment Opportunity Commission (EEOC) has issued its FY 2005 Annual Report on the Operations and Accomplishments of the Office of the General Counsel. According to the report, the Office of the General Counsel (OGC) filed 383 merits lawsuits in FY 2005. Merits suits include direct suits and interventions alleging violations of the substantive provisions of the EEOC's statutes and suits to enforce administrative settlements. Of the 383 merits suits filed, 379 were direct suits, 1 was an intervention and 3 were actions to enforce conciliation agreements. Additionally, the OGC filed 33 actions to enforce subpoenas issued during EEOC investigations.

The 383 merits lawsuits filed are characterized as follows: 297 had Title VII claims; 49 had ADA claims; 43 had ADEA claims; 13 had EPA claims; 139 cases sought relief for multiple aggrieved individuals; and 16 were concurrent suits. Sex discrimination (46.9%) and retaliation (35.8%) were the bases alleged most often in merits suits. Race (21.1%), disability (12.8%), age (11.2%) and national origin discrimination (7.8%) were the bases next most frequently alleged. The total exceeds 100% because multiple bases are often alleged. When constructive discharge is included, discharge was an issue in over 61% of the merits suits filed in FY 2005. Harassment (of all types) was an issue in 44.6% of the suits filed and sexual harassment was an issue in 25.8% of the suits filed.

In fiscal year 2005, the OGC resolved 337 merits suits, which resulted in monetary relief of approximately $107.7 million, according to the report. The 337 merits suit resolutions were obtained in the follow manner: 79.8 by consent decree; 7.7% settlement agreement; 5.1% by favorable court order; 5.6% by unfavorable court order; and 1.8% by voluntarily dismissal. The percentage of merits suits successfully resolved in FY 2005 was 92.6% (includes consent decrees, settlement agreements and favorable court orders). Of the 337 merits suit resolutions, 116 sought relief for multiple aggrieved individuals. The EEOC's FY 2005 Annual Report on the Operations and Accomplishments of the Office of the General Counsel is posted at the agency's website at http://www.eeoc.gov/litigation/05annrpt/index.html.

EEOC posts EEO data pursuant to the No Fear Act.  The EEOC has posted summary statistical EEO data for the agency's internal complaint activity and for government-wide hearings and appeals for the fiscal year 2005 through the first quarter of 2006.

Section 301 of the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No Fear Act) (CCH EMPLOYMENT PRACTICES GUIDE ¶3408), requires each federal agency to post summary statistical data pertaining to complaints of employment discrimination filed against it by employees, former employees, and applicants for employment under 29 CFR Part 1614. The specific data to be posted is described in section 301(b) of the Act and 29 CFR 1614.704. In addition, section 302 of the No Fear Act requires the EEOC to post government-wide, summary statistical data pertaining to hearings requested under 29 CFR Part 1614 and appeals filed with EEOC. The specific data to be posted is described in section 302(a) of the Act and 29 CFR 1614.706. The posting of EEO data on agency public websites is intended to assist Congress, federal agencies and the public to assess whether and the extent to which agencies are living up to their equal employment opportunity responsibilities. The EEOC's No Fear Act data is available on the agency's website at: http://www.eeoc.gov/stats/nofear/index.html.

EEOC issues final rule notice on its Privacy Act fee schedule.  The EEOC has published a final rule notice that it is adopting the proposed revisions to its Privacy Act fee schedule (71 FR 11309). The updated schedule of fees conforms to the EEOC's Freedom of Information Act (FOIA) fee schedule, which was updated on October 3, 2005 (70 FR 57510).

Background. On December 12, 2005, the EEOC published a notice of proposed rulemaking intending to amend 29 CFR 1611.11. This section contains a schedule of fees utilized by the EEOC for purposes of assessing costs to individuals who seek access to records under the Privacy Act (5 USC 552a). The revision amends 29 CFR 1611.11 to conform the fees charged under the Privacy Act to the fees charged under the FOIA. See 29 CFR 1610.15, as amended by 70 FR 57510 (2005). In effect, the fees for duplication, attestation and certification of records under the Privacy Act are being made consistent with the fees charged for those services under the FOIA. Comments from the Public were due on or before January 11, 2006, but none were received. Therefore, the EEOC is adopting the proposed revisions, without change, as its final rule.

Revised Regulation. PART 1611 -- PRIVACY ACT REGULATIONS

1. The authority citation for part 1611 continues to read as follows: Authority: 5 U.S.C. 552a.

2. Section 1611.11 is revised to read as follows:

Sec. 1611.11 Fees.

(a) No fee shall be charged for searches necessary to locate records. No charge shall be made if the total fees authorized are less than $1.00. Fees shall be charged for services rendered under this part as follows:

1. For copies made by photocopy--$0.15 per page (maximum of 10 copies). For copies prepared by computer, such as tapes or printouts, EEOC will charge the direct cost incurred by the agency, including operator time. For other forms of duplication, EEOC will charge the actual costs of that duplication.
2. For attestation of documents--$25.00 per authenticating affidavit or declaration.
3. For certification of documents--$50.00 per authenticating affidavit or declaration.

(b) All required fees shall be paid in full prior to issuance of requested copies of records. Fees are payable to "Treasurer of the United States."

For further information please contact: Thomas J. Schlageter, Assistant Legal Counsel, or Michelle Zinman, Senior General Attorney at (202) 663-4640 (voice) or (202) 663-7026 (TTY). This notice is also available in the following formats: large print, Braille, audiotape and electronic file on computer disk. Requests for this notice in an alternative format should be made to the EEOC's Publication Center at 1-800-669-3362.

Labor/Wage Hour     Top of Page

Federal Labor Relations Authority appointments announced.  Federal Labor Relations Authority (FLRA) Chairman Dale Cabaniss has announced the appointment of a career member of the Senior Executive Service, Jill M. Crumpacker, as Executive Director, following a vote of the three-member Authority in accordance with the Federal Service Labor-Management Relations Statute. The FLRA is an independent agency responsible for administering the labor-management relations programs for more than one million non-Postal Service Federal employees worldwide, the majority of whom are exclusively represented in more than 2,000 bargaining units. The FLRA conducts its case-processing activities through four components: the General Counsel of the Authority (OGC), the Office of Administrative Law Judges (OALJ), the Authority decisional component (Authority), and the Federal Services Impasses Panel (Panel). Presidential appointees head three of these four components (OGC, Authority, and Panel).

Crumpacker brings nearly 20 years of broad management and legal experience, at both the Federal and State levels, to her new position. Most recently, she served as Director of Policy & Performance Management for the FLRA. Crumpacker has also served in a senior labor relations position at the Internal Revenue Service and as staff counsel to two previous National Labor Relations Board Members. Her state administrative experience includes serving as Director of Employment & Training for the Kansas Department of Labor and as Senior Governmental Affairs Liaison for a Kansas Governor. Crumpacker holds an MPA from the University of Kansas, a JD from Washburn School of Law, and an LL.M., with distinction, from the Georgetown University Law Center. During law school, Jill served as editor-in-chief of the Washburn Law Journal. She also holds a Senior Professional in Human Resources (SPHR) certification through the Society for Human Resource Management and is a member of the State of Kansas, U.S. District of Kansas, and U.S. Supreme Court bars.

Additionally, FLRA General Counsel Colleen Duffy Kiko has announced the appointment of Donald S. Harris to be Deputy General Counsel for the Office of the General Counsel. Before his appointment, Harris served as Attorney-Advisor with the Office of the Solicitor, US Department of the Interior. In this role, which he held since 1995, Mr. Harris represented the Department in litigation before the Merit Systems Protection Board, the Equal Employment Opportunity Commission and the Department of Labor. He also handled grievances and arbitrations for the Department. Much of Mr. Harris' workload consisted of litigating whistleblower retaliation complaints before the Department of Labor related to the employee protection provisions of the environmental statutes. During his tenure in the Office of the Solicitor, Harris has supervised litigation attorneys and was responsible for issues related to the Freedom of Information Act, the Privacy Act and the Department's budget.

Prior to his work in the Office of the Solicitor, Harris served for five years as an attorney in the Office of the Secretary, Office of the Legislative Counsel, within the Department of Interior. From 1984 to 1987, Harris was a legislative attorney with the American Gas Association, and from 1979 to 1984, he worked at the Federal Energy Regulatory Commission. Harris holds a B.A. degree from the University of Maryland, and graduated "With Distinction" from The George Mason University School of Law, where he served as the Business Editor of the Law Review.

Comment period extended on two proposed OFCCP regulatory revisions.  The Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has extended the deadline for comments on two proposed regulatory revisions from March 21, 2006 to March 28, 2006. One of the proposed regulatory revisions would remove the current requirement for nonconstruction federal contractors to file the Equal Opportunity (EO) Survey. The other proposal would amend the OFCCP's regulations implementing the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), 38 USC §4212, to incorporate the amendments made by the Jobs for Veterans Act (JVA) of 2002. Both proposals were published in the Federal Register on January 20, 2006 (71 FR 3373 and 71 FR 3351).

Due to an upgrade in the OFCCP's computer system, the original email address published in the proposals is not currently functioning and is not receiving email comments. Accordingly, the email address previously published (ofccp-mail@dol.esa.gov) has been corrected to: OFCCP-Public@dol.gov. The comment period has been extended to ensure that all public comments are received. Respondents who sent comments to the earlier email address are encouraged to contact James C. Pierce at the following address to find out if their comments were received or need to be resubmitted: James C. Pierce, Acting Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue, NW, Room N3422, Washington, DC 20210. Telephone: (202) 693-0102 (voice) or (202) 693-1337 (TTY). Notice of the deadline extension and correction of the email address for comments on these proposals was published in the Federal Register on March 21, 2006 (71 FR 14134-14135).

OFCCP may revise EO 11246 regulations to coordinate with EEO-1 Report changes.  Beginning in 2007, employers, including federal contractors, will collect and report data about the racial, ethnic, and gender composition of their workforces on a revised Employer Information Report, commonly known as the EEO-1 Report. Noting these changes, the OFCCP has announced the start of an internal review to identify regulatory changes that may be necessary to coordinate its data collection and reporting requirements with the changes to EEO-1 Report. The announcement is posted on the OFCCP's website at: http://www.dol.gov/esa/regs/compliance/ofccp/eeo1rpt.htm.

Changes to EEO-1 form. The existing EEO-1 report form calls for workforce data to be broken down by nine job categories, using five race and ethnic categories. The revised EEO-1 report contains changes to the race and ethnic categories (See CCH EMPLOYMENT PRACTICES GUIDE, ¶5184). A new category titled "two or more races" has been added, and the category "Asian or Pacific Islander" has been divided into two separate categories -- "Asian" and "Native Hawaiian or other Pacific Islanders." In addition, the approved revisions to the EEO-1 report include an increase in the number of job categories as a result of dividing the Officials and Managers category into two subgroups -- Executives/Senior Level and First/Mid Level Officials. The changes were approved by the Office of Management and Budget on January 27, 2006. The revised EEO-1 report must be filed for the first time for the calendar year 2007 report, which is due by September 30, 2007. Employers are to continue using the current format for calendar year 2006 EEO-1 report submissions.

Executive Order 11246 regulations. The regulations implementing Executive Order 11246 (EO 11246) require contractors to collect, maintain, and report information about the gender, race and ethnicity of their employees. The race and ethnic categories specified in the current EO 11246 regulations -- Blacks, Hispanics, Asians/Pacific Islanders and American Indians/Alaskan Natives -- are the same categories used on the current EEO-1 report form, and found in the standards for the classification of federal data on race and ethnicity issued in 1977. The 1977 standards have since been superseded by the Standards for the Classification of Federal Data on Race and Ethnicity issued by the Office of Management and Budget in 1997 (62 FR 58782; CCH EMPLOYMENT PRACTICES GUIDE, ¶4931)("1997 Revised Standards"). Federal data collection and reporting requirements that include racial and ethnic information are required to be consistent with the 1997 Revised Standards. Thus, the revised EEO-1 report adopts race and ethnic categories that are in line with the 1997 Revised Standards. Likewise, changes must be made to the race and ethnic categories specified in the regulations implementing EO 11246 to conform to the 1997 Revised Standards.

Coordination of requirements. During the public comment period on the proposed revisions to the EEO-1 report, the OFCCP announced its intention to coordinate its data collection and reporting requirements with the changes to EEO-1 report to avoid imposing inconsistent burdens on the federal contractor community. To that end, the OFCCP has started an internal review to identify regulatory changes that may be necessary. In addition to the changes to race and ethnic categories, the revisions to the EEO-1 job categories may necessitate other changes in the regulations implementing EO 11246. According to the OFCCP, any changes to the OFCCP's data collection and reporting requirements to incorporate the 1997 Revised Standards and the EEO-1 report revisions will be published in the Federal Register for public comment. Moreover, the OFCCP states that it will provide federal contractors a reasonable transition period before any regulatory changes become effective.

Benefits Top of Page

FDIC issues interim regulations to reflect increase on guarantee for retirement plan deposits. The Federal Deposit Insurance Corporation (FDIC) has issued interim regulations that amend the agency's existing deposit insurance regulations to implement provisions of the Federal Deposit Insurance Reform Act of 2005 (P.L. 109-171), which increased the deposit insurance limit for certain retirement accounts from $100,000 to $250,000 (indexed). The interim regulations appeared in the March 23rd Federal Register.

The Federal Deposit Insurance Reform Act of 2005 increased the deposit insurance limit for certain retirement accounts from $100,000 to $250,000. The types of retirement accounts covered by the law include individual retirement accounts, IRC Sec. 457 deferred compensation plans, and individual account plans defined in ERISA Sec. 3(34) (e.g., 401(k) plans).The 2005 law also provides per-participant coverage to employee benefit plan accounts, even if the depository institution at which the deposits are placed is not authorized to accept employee benefit plan deposits. This coverage is referred to as "pass-through" coverage because the insurance passes through the employee benefit plan administrator to each of the participants in the plan. The law eliminated the former requirement that an insured depository institution meet prescribed capital requirements before employee benefit plan deposits accepted by that institution would be eligible for pass-through coverage. As a result, pass-through coverage for employee benefit plan deposits no longer is dependent on the capital level of the institution where such deposits are placed. The interim regulations amend Part 330 of the FDIC's existing rules to reflect these provisions of the 2005 law. The interim regulations are effective April 1.

HIPAA security rule takes effect for small plans.  Most health care plans with annual premiums of less than $5 million have until April 21, 2006, to comply with the security standards of the Health Insurance Portability and Accountability Act (HIPAA). Health care plans that must meet these requirements are those that create, maintain, or transmit electronic protected health information (PHI). In order to ensure compliance, employers should first conduct an analysis to determine if any of their computer systems contain PHI that is subject to the HIPAA security rules. If no electronic PHI is discovered, the employer likely will have no further obligations. The same is true of self-funded group health plans that do not receive e-PHI from their third party administrators or any other business associate.

Plans also should document that they have conducted an analysis and whether PHI was discovered. Of course, if electronic PHI exists in employer systems, the group health plan must comply in full with the security standards. The Centers for Medicare and Medicaid Services (CMS) issued final regulations to implement the HIPAA standards for security of PHI in electronic form in 2003. The compliance date was April 21, 2005, except for small plans (those with annual premium receipts of less than $5 million), which have until April 21, 2006. The requirements for security standards are part of HIPAA's administrative simplification provisions. Under HIPAA's security standards, a covered entity that creates, maintains or transmits PHI electronically must assess potential risks and vulnerabilities to PHI; develop, implement, and maintain appropriate security measures to protect it from unauthorized access, alteration, deletion and transmission; and document and maintain its security measures.

Mental Health Parity Act extended to end of 2006.  The Department of Labor's Employee Benefits Security Administration (EBSA) has issued an interim amendment to the agency's existing regulations that extend the sunset date of final regulations under the Mental Health Parity Act (MHPA) to December 31, 2006, to be consistent with legislation recently enacted by Congress. The amendment was published in the March 20th Federal Register. President Bush signed the extension December 30, 2005, as part of the Employee Retirement Preservation Act (PL 109-151, 119 Stat. 2886). The original MHPA contained a sunset provision requiring that the provisions of the act would not apply to benefits for services furnished on or after September 30, 2001. MHPA has been amended four times before to extend the sunset date. MPHA requires that annual or lifetime dollar limits for mental heath benefits be no lower than the dollar limits for medical/surgical benefits offered by a group health plan. The act applies to group health plans or health insurance coverage offered by issuers in connection with a group health plan that offers both mental health and medical/surgical benefits. However, it does not require plans to offer mental health benefits.

Senate panel approves association health plan bill.  A Senate committee passed a bill that would allow small businesses to join together to offer group health insurance. The Senate Health, Education, Labor and Pensions (HELP) Committee approved the bill – the Health Insurance Marketplace Modernization and Affordability Act (S 1955) – on March 15th. Under the bill, sponsored by HELP Committee Chairman Michael Enzi (R-WY), businesses and trade associations could band together to offer their members health coverage. The bill, Enzi said, will allow associations to gain leverage when negotiating the price of insurance, resulting in lower costs for policy holders. The bill would make it easier for associations to offer health insurance across state lines by exempting state coverage requirements. Associations could offer a basic healthcare package to small businesses, but would be required also to offer a more comprehensive plan.

Democratic opponents of the proposed legislation unsuccessfully offered a number of amendments that would have added coverage requirements for health plans offered through business and trade associations. Sen. Edward Kennedy (D-MA) commented, "although the bill has been presented as legislation for small businesses, the effects of this bill go far beyond the 'small business plans' and would sweep away important protections for patients in every state-regulated insurance market." Enzi brushed aside the criticism. "If you can't afford insurance you aren't getting coverage for any procedures, mandated or not," Enzi said. "My bill would allow a small business benefit health association to offer a more affordable healthcare package that may not include some of the state's benefit mandates, but it would be required to offer a comprehensive alternative package." President Bush supports insurance coverage through associations, and the House has passed association health plan legislation a number of times in the past years, including a bill (HR 525) in July 2005. The Senate has been unable to advance similar legislation.

Payroll Top of Page

Senate to consider bill with employment eligibility verification provision. The Senate is taking up a bill previously passed by the House which contains provisions that would amend the Immigration and Nationality Act by creating a new employment eligibility verification system. Under the bill, the Department of Homeland Security would establish a verification system through which the Department would respond to inquiries made by employers about an individual's identity and authorization to be employed. The inquiries would be made through a toll-free phone number or other electronic media. The Department would also maintain records of all inquiries made and of verifications, or nonverifications, provided. Verification or tentative nonverification of an individual's identity or employment eligibility would be made within three days of the inquiry. In the case of a tentative nonverification, the Department, in consultation with the Social Security Administration (SSA), will specify a secondary verification process that can be used to confirm the validity of the information provided and to provide a final verification or nonverification within ten days after the date of the tentative nonverification.

Secure method of verification. As part of the verification system, the SSA will establish a reliable and secure method to compare the name and social security account number provided in an inquiry against the information maintained by the SSA in order to validate, or not validate, the information provided regarding an individual whose identity and employment eligibility must be confirmed.

Employer requirements. Under the verification system, employers will be required to seek verification of the identity and work eligibility of an individual no later than the end of three working days after the date of hiring, or within a specified time period for previously hired individuals. Employers will also be required to retain verification forms for three years after the date of hire, or one year after the date of the employee's termination.

IRS finalizes proposed changes to regulations on withholding of US source income paid to foreign persons. The Internal Revenue Service has issued final versions of proposed amendments to existing regulations governing the withholding of US source income paid to foreign persons. The proposed amendments cover a number of issues raised in Notice 2001-4, 2001-1 CB 267; Notice 2001-11, 2001-1 C.B. 464; and Notice 2001-43, 2001-2 CB 72, and in amendments to Code Sec 1441 that were made by the American Jobs Creation Act of 2004 (PL 108-357). The final regulations adopt the proposed amendments with two minor changes from the rules as proposed.

TIN requirements. First, under the existing regulations, a taxpayer identification number (TIN) must be stated on a withholding certificate from a person representing to be a foreign grantor trust with five or fewer grantors. The proposed rules eliminated the TIN requirement for withholding certificates provided by such persons to qualified intermediaries, but retained it for certificates provided to other withholding agents if the certificate was executed on or before December 31, 2003. The final regulations provide a uniform rule without regard to the identity of the certificate's recipient. Thus, a withholding certificate issued on or after January 1, 2001, and provided to a qualified intermediary or any other withholding agent by a person representing to be a foreign grantor trust with five or fewer grantors does not need to state a TIN for the certificate to be valid.

Treaty-based return positions. Second, the rules in the proposed regulations governing the reporting of treaty-based return positions are adjusted. The existing regulations require that if a taxpayer takes a return position that a tax treaty overrules or modifies any Internal Revenue Code provision in a way that results in lower tax, that position must be disclosed. The proposed regulations restricted the reporting requirement to certain listed positions and also added a de minimis exception to the requirement. The final regulations waive the reporting requirement for amounts properly reported on Form 1042-S, Foreign Person's US Source Income Subject to Withholding, by a withholding agent that is a reporting corporation under Code Sec 6038A(a), a US financial institution, a qualified intermediary, or, in some cases, a withholding foreign partnership or withholding foreign trust. The de minimis exception to reporting applies to taxpayers who are not individuals or states that receive amounts that have been properly reported on Form 1042-S, do not exceed $500,000 and are not received through an intermediary or flow-through entity. These waivers from reporting do not apply if reporting is specifically required by the instructions to Form 8833, Treaty-Based Return Position Disclosure Under Code Sec. 6114 or Code Sec. 7701(b). (71 FR 13003, March 14, 2006.)

IRS discontinues EDI, proprietary filing of Forms 940 and 941. The IRS plans to discontinue acceptance of electronically filed Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and Form 941, Employer's Quarterly Federal Tax Return, in the EDI and Proprietary formats effective October 28, 2006. Decline in use of these formats, coupled with increasing costs to maintain these formats, prompted this decision. The change pertains to e-filers who develop software or electronically transmit Forms 940 and 941. The IRS will continue to support the XML file format for electronically filed Forms 940 and 941.

IRS postpones tax deadlines in Katrina hit areas. Filing and payment deadlines for taxpayers hit hardest by Hurricane Katrina have been further postponed. Taxpayers in Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles and St. Tammany parishes in Louisiana and in Hancock, Harrison and Jackson counties in Mississippi automatically have through August 28, 2006, to file returns and make certain tax payments that had a due date or extended due date on or after August 29, 2005, and on or before August 28, 2006. These deadlines had previously been postponed until February 28, 2006. Taxpayers who suffered severe hurricane damage outside of these areas should identify themselves as impacted to receive postponement. The disaster area that is eligible for additional relief by self-identification includes eleven counties in Alabama, 24 parishes in Louisiana and 46 counties in Mississippi. Self-identification can be accomplished by writing Hurricane Katrina in red ink at the top of the return when filed, or by calling the IRS disaster hotline at 1-866-562-5227. Most tax returns are affected by this relief, including individual returns, corporate returns, partnership returns, S corporation returns, trust returns, estate, gift and generation-skipping transfer tax returns and employment and certain excise tax returns. The postponement does not, however, apply to information returns in the Form W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. The postponement also does not apply to employment and excise tax deposits; however, the IRS will abate penalties for failure to make these deposits in a timely manner if the deposits were due on or after August 29, 2005, and on or before August 28, 2006, provided the taxpayer made these deposits by August 28, 2006 (IRS News Release IR-2006-30, February 17, 2006; IRS Notice 2006-20, IRB 2006-10).

Pension Law Top of Page

Pension conference starts following House vote to instruct conferees.   A House-Senate conference on pension reform legislation got underway on March 8, 2006. A conference agreement is needed to iron out differences between the Senate-passed reform measure and the House-passed bill. A looming April 15 deadline for quarterly pension payments led Senate Finance Committee Chairman Charles Grassley (R-IA) to comment "we need to get this pension bill done by April 15."

House conferees named. The seven Republican House members who were named to the pension conference are House Ways and Means Committee Chairman Bill Thomas (R-CA), Dave Camp (R-MI), House Majority Leader John A. Boehner (R-OH), House Education and the Workforce Chairman Howard P. McKeon (R-CA), Sam Johnson (R-TX), Patrick J. Tiberi (R-OH), and John Kline (R-MN). The four Democratic conferees are House Education and the Workforce ranking member George D. Miller (D-CA), Ways and Means ranking member Charles B. Rangel (D-NY), Donald M. Payne (D-NJ), and Robert E. Andrews (D-NJ).

Senate conferees. In addition Senators Tom Harkin (D-IA) and Barbara A. Mikulski (D-MD), Democratic conferees are Senate Finance Committee ranking member Max Baucus (D-MT), Kent Conrad (D-ND), John D. Rockefeller IV (D-WV), Jeff Bingaman (D-NM), and Edward M. Kennedy (D-MA). The Republican conferees are: Grassley, Trent Lott (R-MS), Orrin Hatch (R-UT), Budget Committee Chairman Judd Gregg (R-NH), Olympia J. Snowe (R-ME), Mike DeWine (R-OH), Rick Santorum (R-PA), Michael Enzi (R-WY), and Johnny Isakson (R-GA). The Senate conferees were named on March 3, 2006.

House instructs its conferees on airline provisions. On March 8, House lawmakers approved a Democratic motion to instruct the 11 members named to the pension conference. Lawmakers disregarded criticism from Thomas and voted 265-158 to approve the nonbinding motion. The Democratic motion instructs the House conferees to produce legislation in the conference report that allows airlines to fully fund their employee pension plans. The conferees were also instructed to produce legislation that stops benefit cuts for pilots who are forced by federal regulations to retire at age 60. "Airlines that have slid into financial trouble because of 9/11 and high gas prices ought to get extra time to make good on the pension promises they make to their employees," said Miller. "This is just common sense and, today, a majority of the House made a clear statement that it should also be the law."

Thomas said that the Democratic motion was unnecessary because House lawmakers from both parties are concerned about protecting the pension of workers in the airline industry. "The rash of high-profile corporate bankruptcies and pension plan terminations over the past several years are a symptom of a larger problem," McKeon said in his opening statement at the start of the pension conference. "Too many employers and unions have negotiated benefits for employees and retirees on which they know they cannot follow through."

PBGC Executive Director Bradley Belt announces resignation.  Bradley D. Belt, Executive Director of the Pension Benefit Guaranty Corporation (PBGC), has announced that he will be leaving the agency at the end of May. "It has been a privilege and an honor to serve the public interest in your Administration, first as a member of the Social Security Advisory Board and for the past two years as the head of the PBGC," Belt said in his resignation letter to the President (www.pbgc.gov/docs/belt_resignation_letter.pdf). "This past two years has been a particularly tumultuous period for the PBGC, which has had to confront unprecedented operational, financial, and policy challenges. Due to the extraordinary efforts of its dedicated public servants, I am proud to say that PBGC rose to the occasion."

During Belt's tenure, the PBGC experienced a record level of pension plan terminations, a dramatic increase in risk exposure, and a near doubling of its customer base. As a result, the number of participants for which PBGC is responsible increased to 1.3 million and the assets managed by the Corporation increased to more than $56 billion. During this period, the Corporation was involved in numerous complex bankruptcies and corporate restructurings, including settlement of the $10.2 billion claim in the United Airlines case, the largest in the agency's history. Belt led a reorganization of the Corporation to better enable it to serve its customers and respond to marketplace developments. The Corporation also enhanced its risk monitoring and management capabilities, implemented robust financial management and internal control systems used as a model by the Office of Management and Budget for other government agencies, launched a series of online services for participants and practitioners, and implemented a new liability-driven investment policy. The PBGC also became the first government agency to be given full certification by OMB and the Office of Personnel Management for its executive performance system based on linkage of organizational performance to executive performance. "Serving in your Administration has been the most rewarding experience of my professional career, but the time has come to pursue other opportunities," Belt said in his letter. "I also want to express my appreciation for the invaluable contributions of PBGC's Board of Directors--Secretary of Labor Elaine Chao, Secretary of Treasury John Snow, and Secretary of Commerce Carlos Gutierrez--to fulfillment of PBGC's important mission."

Prior to being appointed as head of the PBGC, Belt had held executive positions in financial services and public affairs. He previously served in senior staff positions at the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and at the Securities and Exchange Commission.

Social Security Top of Page

SSA proposes rules on reductions in Medicare Part B subsidies.  The Social Security Administration (SSA) is proposing regulations that determine when and under what circumstances the premium for coverage under Medicare Part B would be increased based on a beneficiary's income. Although the Centers for Medicare & Medicaid Services (CMS) are responsible for determining the annual Medicare Part B standard monthly premium amounts and premium increases for late enrollment, the SSA is responsible for making initial determinations and reconsiderations about income-related monthly adjustment amounts to the Part B premium.

Background. The Medicare Part B premium, which is set by CMS, covers approximately 25% of Medicare Part B program costs. The remaining 75% is subsidized by the federal government. However, beginning in 2007, this subsidy will be reduced for approximately four to five percent of the approximately 40 million Medicare Part B beneficiaries under Section 811 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the MMA). The proposed amendments, a new subpart B to Part 418 of Title 20, CFR, would implement this section of the MMA and would contain the rules for determining when, based on income, a "monthly adjustment amount" will be added to a Supplementary Medical Insurance (Medicare Part B) beneficiary's standard monthly premium. The adjustment amount would reduce, also based on income, the federal subsidy for payment of the Medicare Part B premium, resulting in a premium increase.

The proposed regulations are being issued by the Social Security Administration, rather than CMS, because MMA Section 1839(i) requires the SSA to determine the income-related monthly adjustment amount for Medicare beneficiaries with modified adjusted gross incomes above an established threshold.

Threshold initially $80,000 ($160,000 for joint filers). The MMA provides that in 2007 the modified adjusted gross income threshold is $80,000 for individuals who file their federal income taxes as single filers and $160,000 for married individuals who file a joint tax return. The MMA requires that the threshold amount be adjusted yearly based on the Consumer Price Index. The proposed rules describe what the new subpart is about; what information the SSA would use to determine whether a claimant will pay an income-related monthly adjustment amount, as well as the amount of the adjustment when applicable; when the SSA will consider a major life-changing event that results in a significant reduction in a claimant's modified adjusted gross income; and how a claimant may appeal the SSA's determination about his or her income-related monthly adjustment amount.

Comments due by May 2, 2006. Comments on the proposed regulations must be received by May 2, 2006, in order be considered by the SSA.

SSA finalizes revision of its medical equivalence regulations. The SSA has finalized its revision of regulations under Titles II (SSDI) and XVI (SSI) that relate to the evidentiary requirements for making findings about medical equivalence. The revision follows in the wake of the Seventh Circuit's holding in Hickman v. Apfel, 187 F.3d 683 (7th Cir 1999) that an Administrative Law Judge may not rely on nonmedical testimonial evidence in determining if an impairment is medically equivalent to a listed impairment. That holding was based on the regulation's language, which stated that "[w]e will always base our decision about whether your impairment(s) is medically equal to a listed impairment on medical evidence only."

The holding spawned Acquiescence Ruling 00-2(7), which the SSA has rescinded, effective March 30, 2006, now that the medical equivalence regulations have been revised. (Medical equivalency determinations are made at step three of the disability determination process, in which disability may be found if a claimant's impairments meet or equal an impairment that is listed in 20 CFR Part 404, Subpart P, Appendix 1) The revised regulations, Regs §404.1526 and §416.926, clarify that all relevant evidence, other than the vocational factors of age, education, and work experience, will be considered when making medical equivalency findings.

Other changes conform equivalency language in both titles. As part of the revision of the medical equivalency regulations, the SSA also is changing the language of Reg. §404.1526 to match the language of the corresponding Title XVI regulation, Reg §416.926. This change is rooted in a 1997 revision of Reg §416.926 in which the SSA adopted more detailed rules for determining medical equivalence in both adults and children. At the time, the SSA stated there was no substantive difference between Regs §404.1526 and §416.926, but did not make changes to the Title II regulation. Other changes to these two regulations remove out-of-date references and clarify who is responsible for determining medical equivalence at each level of the administrative review process.

Minor changes made to Regs. §404.1525 and §416.925. In these regulations, the SSA is replacing the headings with questions, deleting the word "medical" from the phrase "medical criteria" and reorganizing and revising text to put it into the active voice and simplify the language. The SSA also is updating the descriptions of the Part B criteria to reflect current listings. Changes also are being made to Regs §404.1528 and §416.928 by deleting an opening statement, which said that "[m]edical findings consist of symptoms, signs, and laboratory findings." The SSA believes that the deletion will help to remove any confusion about the evidence it considers wherever it uses the term "medical findings" in its rules. Another minor change involves replacing Regs §404.1529(d)(2) and §416.929(d)(2) with the text of prior Regs §404.1525(f) and §416.925(f). Except for minor editorial revisions, the language is unchanged.

Effective date. The revised regulations will become effective on March 31, 2006.

No change in interest rates for second quarter of 2006. The IRS has announced that there will be no change in the interest rates for the calendar quarter beginning April 1, 2006. The interest rates are as follows: seven percent for overpayments (six percent in the case of a corporation); seven percent for underpayments; nine percent for large corporate underpayments; and four and one-half percent for the portion of a corporate overpayment exceeding $10,000. Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point. These interest rates are computed from the federal short-term rate based on daily compounding determined during January 2006 (IR-2006-41, March 9, 2006; Rev Rul 2006-12, IRB No 2006-12, March 20, 2006).