See All Federal Law Change Summaries in the Library

Employment Law Top of Page

EEOC seeks extension of existing record retention regulations under Title VII and ADA.  The US Equal Employment Opportunity Commission (EEOC) has published a notice of its intention to submit to the Office of Management and Budget a request for an extension without change of the existing recordkeeping requirements related to Title VII and the Americans with Disabilities Act (ADA) found in 29 CFR part 1602 et seq. The EEOC's notice was published in the Federal Register on November 20, 2006 (71 FR 67125). The EEOC seeks public comments on the proposed extension.

Background. The EEOC enforces Title VII of the Civil Rights Act of 1964 and Title I of the ADA, which prohibit discrimination on the basis of race, color, religion, sex, national origin or disability. Under section 709(c) of Title VII, 42 USC 2000e-8(c) and section 107(a) of the ADA, 42 USC 12117(a) the EEOC is required to establish regulations pursuant to which employers subject to those Acts must make and preserve certain records that will assist the EEOC in assuring compliance with the nondiscrimination in employment requirements of those Acts. The recordkeeping regulations promulgated by the EEOC under those authorities are contained in 29 CFR part 1602 et seq. While not requiring the creation of any particular records, those regulations generally require employers to preserve any personnel and employment records they make or keep for a period of one year. The EEOC is seeking an extension of these regulations without change.

Only employers with 15 or more employees are subject to Title VII and the ADA. Since the recordkeeping requirement does not require any reports or the creation of new documents, but merely requires retention of documents made or kept by the employer, the burden imposed by these regulations is minimal. The burden is estimated at less than one hour per employer.

Seeking public comment. The EEOC is soliciting public comment to enable it to:

  1. evaluate whether the proposed collection of information is necessary for the proper performance of the Commission's functions, including whether the information will have practical utility;
  2. evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  3. enhance the quality, utility, and clarity of the information to be collected; and
  4. minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

Written comments on the EEOC's Notice must be submitted on or before January 19, 2007 to Stephen Llewellyn, Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, 10th Floor, 1801 L Street, NW, Washington, DC 20507. The Executive Secretariat will also accept comments totaling six or fewer pages by fax at: (202) 663-4114 (not a toll-free number). This limitation is necessary to assure access to the equipment. Fax receipt will not be acknowledged, but the sender may request confirmation of receipt by calling the Executive Secretariat staff at: (202) 663-4070 (voice) or (202) 663-4074 (TDD) (not toll-free numbers). Copies of comments submitted by the public will be available for review at the EEOC's library, Room 6502, 1801 L Street, NW, Washington, DC 20507 between 9:30 a.m. and 5 p.m. Further information may be obtained by contacting Thomas J. Schlageter, Assistant Legal Counsel or Mona Papillon, General Attorney, at: (202) 663-4660 or TDD (202) 663-4074.

EEOC posts Job Classification Guide, FAQs for EEO-1 reports.  On November 6, 2006, the EEOC posted on its website the new Job Classification Guide that employers will use to complete EEO-1 reports beginning in 2007. The agency has also posted Questions and Answers: Implementation of Revised Race and Ethnic Categories, which provides answers to employers' frequently asked questions (FAQs) about how to implement the revised race, ethnic and job categories that are part of the revised EEO-1 report.

The EEO-1 report is the principal reporting form by which covered employers provide the federal government with a count of their workforces by ethnicity, race and gender, divided into job categories. Submitted annually to the Joint Reporting Committee, which includes the EEOC and the Office of Federal Contract Compliance Programs, the report must be filed by: (1) private employers with 100 or more employees; and (2) employers with federal government contracts of $50,000 or more and 50 or more employees. In 2005, the EEOC approved revisions to the EEO-1 report's job categories and race and ethnic categories, which will be effective for the 2007 reporting cycle. The new Job Classification Guide reflects the revisions to the EEO-1 report's job categories. It cross-references the 2000 Census job codes and the new EEO-1 report's ten job categories. The Guide is designed to help employers correctly classify employees according to the ten job categories listed in the new EEO-1 report. Individual job categories are explained in the EEO-1 Instruction Booklet, which provides a definition and examples of the types of jobs that are included in each category.

The EEOC's FAQ answers to many questions that employers may have about implementing the revisions to the EEO-1 report. For example, it states that the new EEO-1 report, which is due on September 30, 2007, must be based on employment figures from any single pay period between July and September, 2007. While the EEOC encourages employers to resurvey current employees using the new race and ethic categories as soon as possible, the document clarifies that the agency will not require employers to resurvey those employees for the September 30, 2007 report. The FAQ sheet also states that employers should seek self-identification of new hires under the new race and ethnic categories as soon as possible. If an employer believes that an employee is of a different race or ethnicity than he or she claims to be, that identification must nonetheless be accepted. When an employee refuses to self-identify, an employer may use existing employment records or visual observation to make the identification. The EEOC's new Job Classification Guide and FAQ, along with other documents related to the revised EEO-1 report, are posted on the agency's website at: http://www.eeoc.gov/eeo1/index.html.

EEOC posts FY 2006 EEO data pursuant to 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 fiscal year (FY) 2006. The agency's FY 2006 runs from October 1, 2005 through September 30, 2006. Section 301 of the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No Fear Act) (See 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 No Fear Act and 29 CFR 1614.704. Additionally, 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 the EEOC. The specific data to be posted is described in Section 302(a) of the No Fear 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.

EEOC internal complaints. The posted data shows that for FY 2006, there were fewer EEOC internal complaints (21) than in FY 2005 (26). The 21 complaints in FY 2006 were filed by 19 individuals. As in FY 2005, reprisal was the most frequently alleged basis of discrimination for EEOC internal complaints. The data showed there was one final action finding discrimination based on disability.

Government-wide hearings. Government-wide, 7,812 hearings were requested by 7,374 employees, former employees or applicants, with race being the most frequently alleged basis of discrimination. This is a substantial decrease from the 10,279 hearings requested by 9,634 individuals in FY 2005. There were 203 findings of discrimination in FY 2006, compared to 232 in FY 2005. Sex was the most frequent basis for a finding of discrimination in FY 2006.

Government-wide appeals. Government-wide appeals also decreased, with 6,743 filed in FY 2006 by 5,765 individuals, compared to 7,490 filed in FY 2005 by 6,356 individuals. As in FY 2005, among appeals, reprisal was the most frequently alleged basis of discrimination. There were 134 findings of discrimination on appeal in FY 2006, a decrease from the 145 such findings in FY 2005. In FY 2006, reprisal was the most frequent basis for a finding of discrimination.

The EEOC's No Fear Act data is available on the agency's website: http://www.eeoc.gov/stats/nofear/index.html.

Labor/Wage Hour     Top of Page

USCIS seeks comments on the Form I-9.  The Department of Homeland Security's US Citizenship and Immigration Services (USCIS) has submitted an information collection request on its Employment Eligibility Verification (Form I-9). The information collection is published to obtain comments from the public and affected agencies. Comments are encouraged and will be accepted for sixty days until January 12, 2007.

All US employers are responsible for completion and retention of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-9. On June 21, 2005, the Department of Homeland Security (DHS) announced that it rebranded the Form I-9 to eliminate outdated references to the former Immigration and Naturalization Service (INS) and its parent agency, the Department of Justice. Aside from replacing outdated references to the Department of Justice and the former INS with references to DHS and its components, the current edition of Form I-9 is the same as the 11/21/91 edition.

The edition date on the rebranded Form I-9 reads "(Rev. 05/31/05)Y." Employers may meet their employment verification requirements under the law by completing a Form I-9 that has an edition date of either "(Rev. 5/31/05)Y," "(Rev. 05/31/05)N," or "(Rev. 11/21/91)N" in the lower right corner of the form. DHS has previously stated that it is in the process of making substantive changes to the Form I-9 and plans to introduce a new Form I-9 at the end of this process.

Written comments and/or suggestions regarding the Form I-9, especially comments regarding the estimated public burden and associated response time, should be directed to the Department of Homeland Security (DHS), USCIS, Director, Regulatory Management Division, Clearance Office, 111 Massachusetts Avenue, Suite 3008, Washington, DC 20529. Comments may also be submitted to DHS via facsimile to 202-272-8352 or via email at rfs.regs@dhs.gov. When submitting comments by email please make sure to add OMB Control Number 1615-0047 in the subject box.

Written comments and suggestions from the public and affected agencies should address one or more of the following four points:

  1. evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
  2. evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  3. enhance the quality, utility, and clarity of the information to be collected; and
  4. minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

If you have additional comments, suggestions, or need a copy of the proposed information collection instrument with instructions, or additional information, please visit the USCIS website at: http://uscis.gov.

NLRB reports on case production in FY 2006.  The National Labor Relations Board (NLRB) issued 477 decisions during fiscal year 2006, which ended September 30. Of this total, 324 were unfair labor practice (C) cases, and 153 were representation (R) cases. In the previous fiscal year, the Board issued 508 decisions (348 C, 160 R). While production declined by 6% since FY 2005, the inventory of pending cases was reduced for the fourth year in a row (from 484 at the beginning of the fiscal year to 305 at the end).

In a statement, Chairman Robert J. Battista remarked:

We regret the drop in case production, but we issued some difficult decisions in FY 2006, and that had an adverse impact on our overall production. We are hopeful, with a full Board for all of FY 2007, we will see improved productivity. On the positive side, we were able to keep lowering our case backlog. We would like to take this opportunity to thank our staffs for their hard work and dedication to the mission of the agency.

The Board did not fully accomplish its FY 2006 goal under the Government Performance and Results Act (GPRA). The Board's performance goal was to issue 90% of C cases that, if not issued by September 30, 2006, would then have been pending for more than 17 months; and 90% of R cases, that if not issued by September 30, 2006, would then have been pending for more than 12 months. In other words, C cases assigned on or before April 30, 2005 and R cases assigned on or before September 30, 2005. The Board began FY 2006 with 295 GPRA C cases and 129 GPRA R cases. The Board issued 137 GPRA C cases (46%) and 100 GPRA R cases (77%) by the end of FY 2006.

Dennis Boren appointed Regional Attorney in NLRB's Detroit, Michigan Regional Office, Sheryl Josephson named Regional Attorney in NLRB's Denver, Colorado Regional Office.  National Labor Relations Board's General Counsel Ronald Meisburg has announced the appointment of Dennis Boren as Regional Attorney in the agency's Regional Office in Detroit, MI (Region 7) and Sheryl Josephson as Regional Attorney in the agency's Regional Office in Denver, Colorado (Region 27).

Boren. A career NLRB attorney, Boren had been serving as Deputy Regional Attorney in that office. In his new position, Boren will assist Regional Director Stephen Glasser in the enforcement and administration of the National Labor Relations Act in the four eastern-most counties in the upper peninsula and the entire lower peninsula of Michigan. A native of Detroit, Michigan, Boren joined the NLRB in 1981 as a Field Attorney in the Detroit Office. He received his J.D. and B.A. degrees in 1977 and 1974, respectively from Wayne State University. In 2002, Boren was promoted to Supervisory Attorney, and in 2003, he was promoted to Deputy Regional Attorney. Boren is a member of the Michigan bar.

Josephson. In her new position, Josephson will assist Regional Director Michael Josserand in the enforcement and administration of the National Labor Relations Act in Colorado, Wyoming, Utah and certain counties in Nebraska, Idaho and Montana. A native of the Chicago area, Ms. Josephson joined the NLRB in 1971 as a Field Examiner in the Chicago, IL Regional Office (Region 13). While working full time for the Agency, she attended law school at night and she received her J.D. degree in 1979 from DePaul University. In 1980, Ms. Josephson converted to a Field Attorney. She continued to work in that capacity in Region 13 until October 1997, when she transferred to Region 27. In 1999 she was promoted to Supervisory Attorney and in 2000 she was promoted to Deputy Regional Attorney in the Denver Office. Josephson received a B.A. degree in psychology from the University of Illinois at Champaign-Urbana in 1970. She is a member of the Illinois Bar.

Benefits Top of Page

Smartcards, debit cards may be used to provide qualified transportation fringe benefits. The Internal Revenue Service (IRS) has described circumstances in which an employer may use smartcards, debit or credit cards, and other electronic media to provide employees with qualified transportation fringe benefits that are excludable from gross income. In 2006, the exclusion is limited to $105 per month for commuting expenses and transit passes and $205 a month for parking.

In Situation 1, "smart cards" (plastic cards with an imbedded memory chip) purchased by an employer from a transit company for use by its employees qualified as a transit system voucher because the cards were only usable as fare media. Since the value of the fare media stored on the cards was no more than $105 per month, the value of the fare media was a qualified transportation fringe benefit and excludable from gross income. Employees were not required to substantiate the use of the cards.

In Situation 2, "terminal-restricted" debit cards purchased by an employer from a third-party debit-card provider and loaded with no more than $105 per month also qualified as a transit system voucher because the debit cards could only be used at points of sale where nothing other than fare media for the transit system was sold. The value of the fare media provided to the employees was excludable from income and substantiation was not required.

In situation 3, an employer also purchased debit cards from a third party. Although the cards were coded to restrict use with merchants that sell fare media, it was possible to use the card to purchase items other than fare media from those merchants. As a result, the cards could not qualify as transit system vouchers (see Reg. Sec. 1.132-9(b) Q/A-16(b)(2)). Nevertheless, because no other types of vouchers were available, the employer was able to use the debit cards to provide qualified transportation fringe benefits under a bona fide reimbursement arrangement by implementing reasonable substantiation procedures.

Substantiation procedures were reasonable where, in the first month of participation, an employee paid his or her own transportation expenses and then substantiated the expenses and certified that the card was only used to purchase fare media. The amount substantiated by the employee was then reimbursed by crediting the debit card (in an amount that did not exceed $105). After the first month, the employer's reimbursement substantiation procedures were based on the examination of periodic statements (presumably monthly statements provided by the debit card company) that included the identity of merchants and the date and amount of each transaction. Monthly employee certifications were required except with respect to recurring items described in the periodic statement that were previously substantiated as a transit pass expense. However, the employer required annual recertification that the debit card was used only to purchase fare media.

Situation 4 provides that a bona fide reimbursement arrangement did not exist where an employer provided a merchant-restricted debit card (as described in situation 3) and the employee at no time substantiated the amount of fare media expenses incurred. The fact that the employee certified that the card was only used to purchase transit passes and the card itself was stamped with a similar statement was not sufficient to meet the substantiation requirements. The ruling is effective January 1, 2008, but may be relied upon for prior transactions.

Source: Rev. Rul. 2006-57, I.R.B. 2006-47, Nov. 20, 2006.

IRS issues 2007 LTC, MSA, adoption benefit and transit COLAs. The IRS has issued a number of cost-of-living adjustments (COLAs) to various types of benefits, including long-term care insurance contracts, medical savings accounts (MSAs) and various transit benefits.

MSAs. MSAs are available to certain employees of small businesses only when used in conjunction with a high deductible health plan whose deductibles are indexed for inflation. Thus, for 2007, for individual coverage, the deductible must range from $1,900 to $2,850 with an out-of-pocket maximum of $3,750. For family coverage, the deductible range is $3,750 to $5,650 with an out-of-pocket maximum of $6,900.

Long-term care COLAs. Generally, benefits from qualified long-term care contracts that pay a set dollar benefit for each day of long-term care service are tax free under Code Sec. 7702(B)(d)(4) up to a set dollar amount, also adjusted annually for inflation. Thus, the "$175 exclusion amount," as indexed, is $260 per day for 2007. The annual amount of long-term care insurance premiums qualifying as "medical expenses" under Code Sec. 213(d)(10) for 2007 are as follows:

  • if the insured is not more than 40 by the end of the tax year, the annual limit is $290;
  • for ages 41 to 50, the annual limit is $550;
  • for 51 to 60, the annual limit is $1,110;
  • for 61 to 70, the annual limit is $2,950; and
  • for 71 or older, the annual limit is $3,680.

Transit COLAs. For tax years beginning in 2007, the monthly limit under Code Sec. 132(f)(2)(A) for employer-provided vanpooling and transit passes is $110 (up from $105). The monthly limit under Code Sec. 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $215 (up from $205).

Adoption assistance. For tax years beginning in 2007, the maximum amount that can be excluded from an employee's gross income under Code Sec. 137(b)(1) for amounts paid or expenses incurred by the employee for qualified adoption expenses under an adoption assistance program is $11,390. The excludable amount begins to phase out under Code Sec. 137(b)(2)(A) for taxpayers with modified adjusted gross income (AGI) in excess of $170,820.

Source: Rev. Proc. 2006-53, I.R.B. 2006-48, Nov. 27, 2006.

Treasury, IRS issue indexed amounts for HSAs. The Treasury Department and IRS have issued new guidance on the maximum contribution levels for Health Savings Accounts (HSAs) and out-of-pocket spending limits for high deductible health plans (HDHPs) that must be used in conjunction with HSAs. These amounts have been indexed for cost-of-living adjustments for 2007.

New annual contribution levels for HSAs. For 2007, the maximum annual HSA contribution for an eligible individual with self-only coverage is $2,850. (Note: for any individual, the maximum contribution is the lesser of the indexed amount or the deductible of the HDHP.) For family coverage the maximum annual HSA contribution is $5,650. Catch-up contributions for individuals who are 55 or older is increased by statute from $700 to $800 for 2007.

Both the HSA contribution and catch-up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual, and, with respect to the catch-up contribution, the number of months of the year that the taxpayer is age 55 and over.

New amounts for out-of-pocket spending on HSA-compatible HDHPs. The maximum annual out-of-pocket amount for HDHP self-coverage for 2007 increases to $5,500 and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,000.

Minimum deductible amounts for HSA-compatible HDHPs. For 2007, the minimum deductible for HDHPs increases to $1,100 for self-only coverageand $2,200 for family coverage.

Source: IRS Rev. Proc. 2006-53, IRB 2006-48, Nov. 27, 2006.

Payroll Top of Page

IRS Announces Inflation Adjustments for 2007.   Personal exemptions and standard deductions will rise, tax brackets will widen and income limits for IRAs will increase in 2007, thanks to inflation adjustments, announced the Internal Revenue Service. By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2007. Key changes affecting 2007 returns, filed by most taxpayers in early 2008, include the following:

  • The value of each personal and dependency exemption, available to most taxpayers, will be $3,400, up $100 from 2006.
  • The new standard deduction will be $10,700 for married couples filing a joint return (up $400), $5,350 for singles and married individuals filing separately (up $200) and $7,850 for heads of household (up $300). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
  • Tax-bracket thresholds will increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket will be $63,700, up from $61,300 in 2006.

In 2007, for the first time, inflation adjustments will raise the income limits that apply to the retirement savings contributions credit, contributions to a Roth IRA and deductible contributions to a traditional IRA where the taxpayer or the taxpayer's spouse is covered by a retirement plan at work. Revenue Procedure 2006-53, containing a complete rundown of inflation adjustments, is posted on the IRS website and will appear in Internal Revenue Bulletin 2006-48, dated Nov. 27, 2006.

2006 inflation adjustment rate for foreign earned income exclusion provided.  The inflation-adjusted rate for the foreign earned income exclusion amount under Code Sec. 911(b)(2)(D)(i) for tax years beginning in 2006 is $82,400. The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) (P.L. 109-222) provided that this annual exclusion amount must be adjusted for inflation in any tax year beginning in a calendar year after 2005. Rev. Proc. 2005-70, I.R.B. 2005-47, 979, is amplified (Rev. Proc 2006-51, I.R.B. 2006-47, Nov. 3, 2006).

IRS issues tax calendars for 2007.  Tax Calendars for 2007, have been released by the IRS. The publication notes the extended due date for Forms 1098, 1099, and W-2, if filed electronically. If filed electronically (not by magnetic media), the due date for filing these forms with the IRS or Social Security Administration is extended to April 2, 2007 (IRS Pub. 509, (Rev. Oct. 2006)).

Standard mileage rates released for 2007.  The standard mileage rate for computing the value of the business use of an automobile will increase to 48.5 (currently, 44.5) cents-per-mile. For medical and moving expense purposes, the rate will increase to 20 (currently 18) cents-per-mile. The mileage rate for charity purposes will remain 14 cents-per-mile. Employers may use the standard mileage rate to pay for auto expenses incurred by employees under a reimbursement or expense allowance arrangement and thereby substantiate and adequately account for such expenses, provided that accountable plan requirements are satisfied. The standard automobile cost for fixed and variable rate allowance purposes will increase to $27,600 (currently, $27,400) (IRS News Release IR-2006-168, November 1, 2006; IRS Rev. Proc. 2006-49, IRB 2006-47, Nov. 20, 2006).

Pension Law Top of Page

PBGC proclaims lower deficit for FY 2006.   The Pension Benefit Guaranty Corporation's (PBGC) insurance program for single-employer pension plans posted a deficit of $18.1 billion in fiscal year 2006, compared with the $22.8 billion shortfall recorded a year ago, according to the agency's Annual Management Report submitted to Congress today. The $4.7 billion net improvement is attributable mainly to the airline relief provisions in the Pension Protection Act that led to a sharp reduction in the amount of "probable" liabilities reflected on the agency's balance sheet.

"The PBGC's financial condition appears to have stabilized for the time being," said Interim Director Vince Snowbarger. "Our current assets can cover pension payments coming due for a number of years into the future, and our exposure to additional losses has declined."

As of September 30, the single-employer program reported assets of $60 billion and liabilities of $78.1 billion. In addition to on-balance-sheet liabilities, the report showed the PBGC's potential future exposure to losses from pension plans sponsored by financially weak employers decreased to $73 billion, compared to $108 billion in 2005. Higher interest rates, and improved credit ratings and plan funding among some employers were factors for the reduced risk of claims. Total underfunding of insured single-employer plans decreased to approximately $350 billion, compared to $450 billion estimated in 2005.

During the year, the single-employer program took in 94 terminated pension plans with a total of $600 million in assets and $1.1 billion in future benefit liabilities, for an average funded ratio of about 50 percent. All but $200 million of this liability was already reflected on the PBGC's balance sheet at the end of fiscal year 2005. The program insures the pensions of 34 million Americans in about 28,800 plans. The PBGC was responsible for the pension benefits of 1.3 million workers and retirees in 2006, reflecting no net change from 2005. The amount of benefits paid increased from $3.7 billion in 2005 to $4.1 billion in 2006 and is projected to rise to $4.8 billion in 2007.

The PBGC's separate insurance program for multiemployer pension plans posted a net loss of $404 million in fiscal year 2006, versus a $99 million net loss in 2005, increasing the program s net deficit to $739 million from the $335 million recorded a year earlier. The $305 million increase in net loss is due primarily to a projected $257 million increase in loss from providing financial assistance to multiemployer plans, partially offset by a $32 million increase in premium income. Reasonably possible exposure to pension plans that may require financial assistance in the future declined to $83 million from $418 million in 2005. The agency estimated total pension underfunding in the multiemployer system at $150 billion in 2006, down from about $200 billion in the previous year. Overall, the multiemployer program has about $1.2 billion in assets to cover $1.9 billion in liabilities. It insures the pensions of almost 10 million Americans in some 1,540 plans.

The PBGC's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements for fiscal year 2006 received an unqualified audit opinion. Clifton Gunderson LLP performed the audit under the direction and oversight of the agency's Inspector General.

Social Security Top of Page

SSA to implement database for identity verification cards.  The Social Security Administration (SSA) has announces that it is establishing a new system of records, the Identity Management System (IDMS), which will become effective on December 5, 2006, barring the receipt of comments that would warrant a delay. The database will hold personal information about individuals for whom it issues a Personal Identity Verification (PIV) card. The PIV card was mandated by a presidential directive that requires all federal agencies to implement a standard identification card that can be used by individuals who require access to federal, or federally controlled, buildings. Individuals for whom a PIV card might be issued include applicants for employment or contracts, federal employees, contractors, students, interns, volunteers, affiliates, as well as individuals authorized to perform or use services provided in agency facilities (for example, credit union, fitness center, etc). The SSA's announcement, which was published in the November 3, 2006, Federal Register (71 Fed. Reg. 64751), details the specific information that will be maintained in the database, the routine uses for which the information will be disclosed, and the safeguards that will be employed to protect the privacy of the information.

SSA issues spam alert regarding 2007 COLAs. Following several reports of an email message with the Social Security Administration's letterhead in circulation with the subject "Cost-of-Living for 2007 update," the SSA on November 7 issued a warning to consumers not to respond. The message provides information about the 3.3 percent benefit increase for 2007 and contains a warning that the SSA needs the individual to update his or her personal information or the agency "will be forced to suspend your account indefinitely." The reader is then directed to a website designed to look like Social Security's Internet website. Once directed to the phony website, the individual is asked to register for a password and to confirm their identity by providing personal information such as his or her Social Security number, bank account information and credit card information. To report receipt of this email message or other suspicious activity to Social Security's Office of Inspector General, the SSA stated that individuals should call the OIG Hotline at 1-800-269-0271. (If an individual is deaf or hearing-impaired, the OIG TTY number should be called at 1-866-501-2101). A Public Fraud Reporting form is also available online at OIG's website http://www.socialsecurity.gov/oig.

[ Return to top of document ]