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Department of Health and Human Services

"Audit of the Pension Plan at a Terminated Medicare Contractor, Transamerica Occidental Life Insurance Company," (A-07-01-00125)

May 29, 2002


Complete Text of Report is available in PDF format (4.6 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


EXECUTIVE SUMMARY:

The Transamerica Occidental Life Insurance Company (TOLIC) was a Medicare contractor until its contract was terminated in November 2000. Federal regulations and Medicare contract provisions require pension gains, which occur when a Medicare segment of a pension plan closes, be credited to the Medicare program. We identified approximately $20.2 million in excess Medicare pension assets at TOLIC at the time of contract termination. Our methodology and calculations were reviewed by the Centers for Medicare & Medicaid Servicesí pension actuarial staff. We recommended that TOLIC remit the $20.2 million in excess pension assets to the Medicare program.