Review of Unfunded Pension Costs of the Aetna Life Insurance Company, Hartford, Connecticut

This final audit report points out that the Aetna Life Insurance Company had accumulated $4.5 million in unallowable direct pension costs related to its Medicare segment. These costs represent unfunded pension costs and imputed interest for Plan Years 1986 through 1990. These pension costs are unallowable because the pension costs were not funded within the required specific time periods set by regulation. Imputed interest on the unfunded costs is also unallowable. Regional Health Care Financing Administration officials agreed with our finding and recommendations for corrective action.