Department of Energy changes policy for contractors’ pensions and medical benefits

The Department of Energy (DOE) today announced new policy measures for the reimbursement of contractor pension and medical benefit plan costs that are based on sound business practices and market-based benchmarks for cost management. The Department will continue to reimburse contractors for costs for current and retired contractor employees’ defined benefit pension plans and medical benefit plans under existing contract requirements. For new contractor employees, the Department will reimburse contractors for the costs of their market-based defined contribution pension plans (similar to 401(k)) and market-based medical benefit plans. The new policy will improve the predictability of contractor benefit costs and mitigate the growth of the Department’s long term liabilities for these costs.

DOE Announces New Policy for Contractor Benefit Reimbursements,” U.S. Dept. of Energy, April 27, 2006

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