Two ways to handle a pension plan surplus

A healthcare organization wanting to tap into its pension plan surplus may be reluctant to do so for fear of Medicare recapture. By following a recent court decision and a reasonable interpretation of Medicare regulations, however, a facility may terminate an existing pension plan, purchase a group annuity contract, and reduce Medicare recapture. Two methods for treating termination of a plan are in line with Medicare rules. A facility considering termination should analyze the effects of both and use the method likely to produce a better financial result.