Benefits reform plan a good place to start

THE WORD WE USE to describe last week's proposal by the ERISA Industry Committee to revamp the current employer-based system of providing and administrating pension and health care plans is "intriguing."

While ERIC's proposal has many elements, at its heart is the idea that employers would have an alternative to directly providing health care and pension plans to their employees.

Under the ERIC proposal, benefit plans would be offered by competing administrators, with the federal government setting standards for the administrators and with employers and employees still funding the costs.

In a nutshell, such a system would be a middle ground between a single-payer system and the current one in which employers provide benefit plans to their employees.

We see some obvious advantages in the system ERIC is proposing. If plans were offered by a relatively small number of administrators rather than tens of thousands of employers, the administrative cost savings should be considerable.

Just as important as its recommendations is the approach ERIC took to present its plan, calling it a starting point for discussion, not a take-it-or-leave-it proposition. ERIC represents the nation's biggest employers on benefit issues.

Changes of this magnitude can be accomplished only through consensus, ERIC President Mark Ugoretz said. We couldn't agree more. With both employment-based health care coverage and traditional pension plans on the decline, it is not too early to start discussions on alternatives to the current benefits delivery system.