Office of Management; Request for Public Comment on Department of Energy Contractor Employee Pension and Medical Benefits Challenge, 14266-14267 [E7-5545]
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Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices
and outcomes of different internal
arrangements and agency decisions.
(d) Increased knowledge of ‘‘best VR
practices’’ for prioritizing and providing
services to individuals with the most
significant disabilities. The RRTC must
contribute to this outcome by
conducting research on the extent to
which individuals with the most
significant disabilities are given priority
for services from their respective State
VR programs, and identifying best
practices among the State VR programs
in ensuring that individuals with the
most significant disabilities receive
services on a priority basis. Collection
and analysis of data for this research
must be coordinated with and informed
by research on the disability
employment service and VR structures
described in paragraphs (b) and (c) of
this priority. This coordination will
allow ‘‘best practices’’ findings to be
properly contextualized, and therefore
more likely to be successfully applied in
other States or agencies.
(e) Increased knowledge of ‘‘best VR
practices’’ for individuals with
developmental disabilities (DD) and
individuals with mental illness (MI).
The RRTC must contribute to this
outcome by conducting research on best
practices for placing or retaining
individuals with DD and individuals
with MI in jobs. Collection and analysis
of data for this best practices research
must be coordinated with and informed
by research on the disability
employment service and VR structures
described in paragraphs (b) and (c) of
this priority. This coordination will
allow ‘‘best practices’’ findings to be
properly contextualized, and therefore
more likely to be successfully applied in
other States or agencies.
(f) Enhancement of the knowledge
base of State and Federal administrators
of the VR program and other
employment programs for individuals
with disabilities, through disseminating
research results and providing training
and technical assistance based on the
new knowledge about the disability
employment service structures
described in paragraphs (b) and (c) of
this priority, and ‘‘best practices’’
knowledge described in paragraphs (d)
and (e) of this priority.
In addition, this RRTC must:
• Collaborate with RSA’s technical
assistance mechanisms to effectively
disseminate best practices materials
developed in the research component of
this RRTC.
• Coordinate its research,
dissemination, training, and technical
assistance efforts with grantees in
NIDRR’s Employment domain, as
appropriate.
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Executive Order 12866
This notice of proposed priority has
been reviewed in accordance with
Executive Order 12866. Under the terms
of the order, we have assessed the
potential costs and benefits of this
regulatory action.
The potential costs associated with
the notice of proposed priority are those
resulting from statutory requirements
and those we have determined as
necessary for administering these
programs effectively and efficiently.
In assessing the potential costs and
benefits—both quantitative and
qualitative—of this notice of proposed
priority, we have determined that the
benefits of the proposed priority justify
the costs.
Summary of potential costs and
benefits: The potential costs associated
with this proposed priority are minimal
while the benefits are significant.
The benefits of the Rehabilitation
Research and Training Centers have
been well established over the years in
that similar projects have been
completed successfully. This proposed
priority will generate new knowledge
and technologies through research,
development, dissemination, utilization,
and technical assistance projects.
Another benefit of this proposed
priority is that the establishment of a
new RRTC conducting research projects
will support the President’s NFI and
will improve the lives of persons with
disabilities. This RRTC will generate,
disseminate, and promote the use of
new information that will improve the
options for individuals with disabilities
to perform regular activities in the
community.
Applicable Program Regulations: 34
CFR part 350.
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(Catalog of Federal Domestic Assistance
Number 84.133B, Rehabilitation Research
and Training Centers Program.)
Program Authority: 29 U.S.C. 762(g) and
764(b)(2).
Dated: March 22, 2007.
John H. Hager,
Assistant Secretary for Special Education and
Rehabilitative Services.
[FR Doc. E7–5590 Filed 3–26–07; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF ENERGY
Office of Management; Request for
Public Comment on Department of
Energy Contractor Employee Pension
and Medical Benefits Challenge
ACTION:
Request for public comments.
SUMMARY: The Department of Energy
(DOE) is seeking public comments and/
or recommendations on how to address
the challenge it faces due to increasing
costs and liabilities associated with
contractor employee pension and
medical benefits. Under the
Department’s unique Management and
Operating (M&O) and other site
management contracts, DOE reimburses
its contractors for allowable costs
incurred in providing employee pension
and medical benefits to current
employees and retirees who are eligible
to participate in the contractors’ pension
and medical benefit plans. DOE has
established a Web site for the public to
submit comments and/or
recommendations on how it should
address the financial challenge it faces
on contractor employee pension and
medical benefits.
DATES: Comments are due on or before
May 11, 2007.
ADDRESSES: Interested parties may
submit comments electronically, via
traditional mail service, or by facsimile
to the addresses identified below. The
Internet address for the Web site is
https://management.energy.gov/
request_for_comments.htm. E-mail
comments to
contractorpensions@hq.doe.gov.
Transmit submissions by facsimile to
Stephanie Weakley, Director, Office of
Resource Management, at 202–287–
1305. Public comments and other
information received from the public
will be posted on this Web site. To the
extent your comments contain
proprietary or business sensitive
information, please so indicate and
include a redacted version of your
comments.
FOR FURTHER INFORMATION CONTACT:
Stephanie Weakley, Office of
E:\FR\FM\27MRN1.SGM
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Federal Register / Vol. 72, No. 58 / Tuesday, March 27, 2007 / Notices
Procurement and Assistance
Management, U.S. Department of
Energy, 1000 Independence Avenue,
SW., Washington, DC 20585, telephone
202–287–1645.
SUPPLEMENTARY INFORMATION:
sroberts on PROD1PC70 with NOTICES
I. Introduction
Under the Department’s unique
Management and Operating (M&O) and
other site management contracts, DOE
reimburses its contractors for allowable
costs incurred in providing employee
pension and medical benefits to current
employees and retirees who are eligible
to participate in the contractors’ pension
and medical benefit plans. DOE intends
to continue its approach to reimbursing
costs incurred by its contractors for
these benefits consistent with
Government-wide rules on cost
allowability; however, DOE believes an
examination of its policies and practices
is appropriate to ensure prudent fiscal
management of taxpayer dollars.
In FY 2006, DOE reimbursed 46
contractors a total of $1.077 billion for
contractor employee pension and
medical benefits—more than a 226
percent increase since FY 2000. In
addition, the Department in its FY 2006
financial statement reported $11.9
billion in accrued unfunded liabilities
for contractor employee pension and
medical benefits—a 68 percent increase
since FY 2000. Costs and liabilities
associated with these benefits are
projected to grow over the next several
years at a rate that significantly exceeds
likely increases in the Department’s
budget.
To address these rising costs and
liabilities, on April 27, 2006, DOE
issued Department of Energy Notice
351.1, Contractor Employee Pension and
Medical Benefits Policy. This Notice
updated and revised the Department’s
policy concerning reimbursement of
M&O and site management contractor
pension and medical benefit costs. On
June 19, 2006, the Secretary of Energy
suspended implementation of the
revised policy to permit consultation
with stakeholders.
II. Challenge Presented by Increasing
Departmental Obligations to Reimburse
Contractor Employee Benefits
The Department of Energy is faced
with the growing challenge of
determining how to best balance its
responsibility for funding important
national missions, including energy and
nuclear security, scientific discovery
and innovation and environmental
clean-up—with providing contractors
sufficient flexibility to offer benefits that
will attract and retain highly qualified
workers and to treat incumbent
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16:38 Mar 26, 2007
Jkt 211001
contractor employees, retirees and
dependents fairly.
A. Background
The Department of Energy relies on
contractors to manage and operate its
specialized scientific, engineering,
production and clean-up sites and
facilities. DOE is the only Federal
agency that uses these unique M&O
contracts to conduct its missions.
The Department obligates
approximately 80 percent of its
estimated annual $24 billion budget to
46 major cost-reimbursement contracts
for management of DOE sites and
facilities in 20 states. Pension and post
retirement benefit programs sponsored
by contractors include 45 contractor
defined benefit pension plans, 37
contractor defined contribution pension
plans, 23 contractor life insurance
plans, and approximately 260 contractor
medical benefit plans. These benefits
are provided to approximately 100,000
active employees and 100,000 retirees,
dependents and beneficiaries. Although
DOE reimburses its contractors for
certain costs associated with contractor
employee benefits, DOE contractors
employ their own workforces and
sponsor and serve as fiduciaries for all
benefit plans.
Most DOE M&O and site management
contractors provide defined benefit
plans that are supplemented by defined
contribution plans and generously
subsidized medical benefit plans.
According to Department of Energy
market comparisons, on average, the
pension benefits received by DOE
contractor employees are higher than
the benefits earned by Federal or private
sector employees. In addition, on
average, DOE contractor employees
contribute less for their medical benefit
costs than Federal employees or private
sector workers.
The scope of DOE’s obligations for
contractor employee benefit costs is
significant and growing. In FY 2006, the
Department’s accrued unfunded
liabilities associated with contractor
employee pension and medical benefits
were $11.9 billion. In FY 2006, DOE
reimbursed its contractors $1.077 billion
for pension and medical benefit plans.
Costs and liabilities for these benefits
are projected to grow at a rate that
significantly exceeds projected increases
in the Department’s budget. Absent
actions to control benefit escalation,
contractor benefit cost reimbursements
will continue to increase. Further, the
volatility and unpredictability of
contractor benefit cost reimbursements
will continue to make it difficult for the
Department to plan and execute
budgets. The Pension Protection Act of
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Sfmt 4703
14267
2006 generally accelerates required
contributions to defined benefit pension
plans and is expected to increase the
amount that DOE reimburses contractors
for pension benefits over the next 5 to
7 years.
B. Description of DOE Notice 351.1
In April 2006, the Department of
Energy issued Notice 351.1 to address
concerns about contractor employee
pension and medical benefits. However,
due to concerns raised about the policy,
in June 2006, it was suspended pending
consultation with stakeholders.
The goals of the Notice were to
improve the Department’s stewardship
of taxpayer dollars by mitigating the
cost growth associated with benefit
liabilities, moderating the volatility and
improving the predictability of the
Department’s cost reimbursement
obligations for benefits, ensuring that
costs for contractor employee pension
and medical benefits are more
consistent with market trends, and
ensuring fairness to incumbent
contractor employees.
The major provisions of the Notice
included continuing to reimburse
contractors for costs for current and
retired contractor employee pension and
medical plans under existing contract
provisions; requiring market-based
defined contribution pension plans and
market-based medical plans for new
employees, except where to do so would
be inconsistent with the terms of a
collective bargaining agreement;
requiring the Secretary of Energy to
approve the costs of contractor proposed
benefit augmentations; and separately
assessing the value of pension and
medical benefits to ensure that both are
market-based. The policy also provided
for the continuation of pension and
medical benefit commitments made by
contractors through collective
bargaining agreements.
Issued in Washington, DC on March 19,
2007.
Ingrid A.C. Kolb,
Director of Management, U.S. Department of
Energy.
[FR Doc. E7–5545 Filed 3–26–07; 8:45 am]
BILLING CODE 6450–01–P
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]]>Agencies
[Federal Register Volume 72, Number 58 (Tuesday, March 27, 2007)]
[Notices]
[Pages 14266-14267]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-5545]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Office of Management; Request for Public Comment on Department of
Energy Contractor Employee Pension and Medical Benefits Challenge
ACTION: Request for public comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Energy (DOE) is seeking public comments and/
or recommendations on how to address the challenge it faces due to
increasing costs and liabilities associated with contractor employee
pension and medical benefits. Under the Department's unique Management
and Operating (M&O) and other site management contracts, DOE reimburses
its contractors for allowable costs incurred in providing employee
pension and medical benefits to current employees and retirees who are
eligible to participate in the contractors' pension and medical benefit
plans. DOE has established a Web site for the public to submit comments
and/or recommendations on how it should address the financial challenge
it faces on contractor employee pension and medical benefits.
DATES: Comments are due on or before May 11, 2007.
ADDRESSES: Interested parties may submit comments electronically, via
traditional mail service, or by facsimile to the addresses identified
below. The Internet address for the Web site is https://
management.energy.gov/request_for_comments.htm. E-mail comments to
contractorpensions@hq.doe.gov. Transmit submissions by facsimile to
Stephanie Weakley, Director, Office of Resource Management, at 202-287-
1305. Public comments and other information received from the public
will be posted on this Web site. To the extent your comments contain
proprietary or business sensitive information, please so indicate and
include a redacted version of your comments.
FOR FURTHER INFORMATION CONTACT: Stephanie Weakley, Office of
[[Page 14267]]
Procurement and Assistance Management, U.S. Department of Energy, 1000
Independence Avenue, SW., Washington, DC 20585, telephone 202-287-1645.
SUPPLEMENTARY INFORMATION:
I. Introduction
Under the Department's unique Management and Operating (M&O) and
other site management contracts, DOE reimburses its contractors for
allowable costs incurred in providing employee pension and medical
benefits to current employees and retirees who are eligible to
participate in the contractors' pension and medical benefit plans. DOE
intends to continue its approach to reimbursing costs incurred by its
contractors for these benefits consistent with Government-wide rules on
cost allowability; however, DOE believes an examination of its policies
and practices is appropriate to ensure prudent fiscal management of
taxpayer dollars.
In FY 2006, DOE reimbursed 46 contractors a total of $1.077 billion
for contractor employee pension and medical benefits--more than a 226
percent increase since FY 2000. In addition, the Department in its FY
2006 financial statement reported $11.9 billion in accrued unfunded
liabilities for contractor employee pension and medical benefits--a 68
percent increase since FY 2000. Costs and liabilities associated with
these benefits are projected to grow over the next several years at a
rate that significantly exceeds likely increases in the Department's
budget.
To address these rising costs and liabilities, on April 27, 2006,
DOE issued Department of Energy Notice 351.1, Contractor Employee
Pension and Medical Benefits Policy. This Notice updated and revised
the Department's policy concerning reimbursement of M&O and site
management contractor pension and medical benefit costs. On June 19,
2006, the Secretary of Energy suspended implementation of the revised
policy to permit consultation with stakeholders.
II. Challenge Presented by Increasing Departmental Obligations to
Reimburse Contractor Employee Benefits
The Department of Energy is faced with the growing challenge of
determining how to best balance its responsibility for funding
important national missions, including energy and nuclear security,
scientific discovery and innovation and environmental clean-up--with
providing contractors sufficient flexibility to offer benefits that
will attract and retain highly qualified workers and to treat incumbent
contractor employees, retirees and dependents fairly.
A. Background
The Department of Energy relies on contractors to manage and
operate its specialized scientific, engineering, production and clean-
up sites and facilities. DOE is the only Federal agency that uses these
unique M&O contracts to conduct its missions.
The Department obligates approximately 80 percent of its estimated
annual $24 billion budget to 46 major cost-reimbursement contracts for
management of DOE sites and facilities in 20 states. Pension and post
retirement benefit programs sponsored by contractors include 45
contractor defined benefit pension plans, 37 contractor defined
contribution pension plans, 23 contractor life insurance plans, and
approximately 260 contractor medical benefit plans. These benefits are
provided to approximately 100,000 active employees and 100,000
retirees, dependents and beneficiaries. Although DOE reimburses its
contractors for certain costs associated with contractor employee
benefits, DOE contractors employ their own workforces and sponsor and
serve as fiduciaries for all benefit plans.
Most DOE M&O and site management contractors provide defined
benefit plans that are supplemented by defined contribution plans and
generously subsidized medical benefit plans. According to Department of
Energy market comparisons, on average, the pension benefits received by
DOE contractor employees are higher than the benefits earned by Federal
or private sector employees. In addition, on average, DOE contractor
employees contribute less for their medical benefit costs than Federal
employees or private sector workers.
The scope of DOE's obligations for contractor employee benefit
costs is significant and growing. In FY 2006, the Department's accrued
unfunded liabilities associated with contractor employee pension and
medical benefits were $11.9 billion. In FY 2006, DOE reimbursed its
contractors $1.077 billion for pension and medical benefit plans.
Costs and liabilities for these benefits are projected to grow at a
rate that significantly exceeds projected increases in the Department's
budget. Absent actions to control benefit escalation, contractor
benefit cost reimbursements will continue to increase. Further, the
volatility and unpredictability of contractor benefit cost
reimbursements will continue to make it difficult for the Department to
plan and execute budgets. The Pension Protection Act of 2006 generally
accelerates required contributions to defined benefit pension plans and
is expected to increase the amount that DOE reimburses contractors for
pension benefits over the next 5 to 7 years.
B. Description of DOE Notice 351.1
In April 2006, the Department of Energy issued Notice 351.1 to
address concerns about contractor employee pension and medical
benefits. However, due to concerns raised about the policy, in June
2006, it was suspended pending consultation with stakeholders.
The goals of the Notice were to improve the Department's
stewardship of taxpayer dollars by mitigating the cost growth
associated with benefit liabilities, moderating the volatility and
improving the predictability of the Department's cost reimbursement
obligations for benefits, ensuring that costs for contractor employee
pension and medical benefits are more consistent with market trends,
and ensuring fairness to incumbent contractor employees.
The major provisions of the Notice included continuing to reimburse
contractors for costs for current and retired contractor employee
pension and medical plans under existing contract provisions; requiring
market-based defined contribution pension plans and market-based
medical plans for new employees, except where to do so would be
inconsistent with the terms of a collective bargaining agreement;
requiring the Secretary of Energy to approve the costs of contractor
proposed benefit augmentations; and separately assessing the value of
pension and medical benefits to ensure that both are market-based. The
policy also provided for the continuation of pension and medical
benefit commitments made by contractors through collective bargaining
agreements.
Issued in Washington, DC on March 19, 2007.
Ingrid A.C. Kolb,
Director of Management, U.S. Department of Energy.
[FR Doc. E7-5545 Filed 3-26-07; 8:45 am]
BILLING CODE 6450-01-P
