Benefit_Value_Study_Manual_04-27-2017

DEPARTMENT
OF ENERGY
(DOE)
BENEFIT VALUE
STUDY DESK
MANUAL

DEPARTMENT OF ENERGY
Office of Contractor Human Resources Policy Division
April 27, 2017 UPDATE

DOE BENEFIT
VALUE STUDY
DESK MANUAL

Prepared for:
By:

DEPARTMENT OF ENERGY
BUCK
CONSULTANTS
Under DE-AC01-96AD38107

Update Prepared for:
By:

DOE
AON CONSULTING, INC.
Under Delivery Order DE-BP01-08MA345678,
Contract No. DE-AB01-08-ME11881
September 28, 2008

Update Prepared for:
By:

DOE
Aon Hewitt Inc.
Under Delivery Order DE-BP01-08MA345678,
Contract No. DE-AB01-08-ME11881
September 26, 2012

Update Prepared for:
By:

DOE
DOE, MA-612
Contractor Human Resources Policy Division
March 23, 2017

Contents
PART I
Overview of Value Study
Illustrative Flow Charts …………………………………………………………………………… 1
1. Purpose ………………………………………………………………………………………… 4
Definition and Objectives: Implication of Results
2. Value Study Compared to Cost Study………………………………………………….……. 11
Demographic Differences: Election Patterns, Funding Differences, Geographic Factors,
Negotiated Pricing, Turnover and Retirement Issues.

PART II
Preliminary Steps
1. Comparator Group Selection…………………………………………………………..….….. 17
Definition of Market. Database Implications.
2. Employee Group Selection……………………………………………………………..……… 20
3. Value Study Preparation ……………………………………………………………...……... 21
Consultant Selection. Data Collection and Validation.

PART III
Valuation Methodology and Assumptions
1. Overview ………………………………………………………………………………..……… 23
2. Assumptions ……………………………………………………………………………..…… 2 4
Demographics. Election Patterns. Interest and Salary Scale. Missing Data. Turnover
and Retirement.
3. Valuation Methodology ………………………………………………………………………. 31
Capital Accumulation. De Minimis Benefits. Death. Defined Benefit. Defined Contribution,
Disability. Flex. Grandfathered Benefits. Health. Paid Time Off. Post-Retirement Benefits.
4.

Informal Programs ……………………………………………………………………….. 43
Paid Time Off. Other.

5. Net Benefit Value……………………………………………………………………….……... 45
Definition and Acceptable Value. Determination of Total Net Benefit Value.

6. Report …………………………………………………………………………..……….. . 48

PART IV
Field Office Review
1. Elements to be Reviewed ………………………………………………...………………..

49

2. Uniform Electronic File Maintenance …………………………………….……………..

50

3. Corrective Action Plan…………………………………………………………………….

51

Part V
Supplemental Information
1. Forms ………………………………………………………………………………………..
Appendix A
Value Study Comparator Request for Approval Form …………………..
Appendix B
Contractor Certification ……………………………………………….…
Appendix C
Actuarial Consultant Certification ………………………………….……
Appendix D
Value Study Checklist Field Office Review ……………………….…….
Appendix E
Corrective Action Plan Determination Checklist Field Office Review ......
Appendix F
Corrective Action Plan Implementation Checklist Field Office Review …
Appendix G
Value Study Executive Summary ………………………………….……..

55
56
58
60
63
66
67
68

Value Study Process Description
DOE CONTRACTOR
Provide Consultant Complete
Information on DOE Value Study
Requirements

Review & Select Appropriate Comparators
From the Group Proposed by Consultant

Submit a Certified Value Study Comparator
Request for Approval Form to the
Contracting Officer
Provide Consultant Copy of the Approved
Value Study Comparators

Review Value Study for Completeness,
Clarity and Compliance
With DOE Policy and Guidelines

Submit Contractor Certification and
Consultant Package (i.e. Consultant
Certification, Key Data Elements Executive
Summary and Value Study) to the CO

1

Value Study Process Description
CONSULTANT
Review DOE Value
Study Requirements
Recommend Value Study
Comparator Group

Collect Plan Design Data

Actuarially Value Benefits

Subtract Employee
Contributions to Determine
Net Benefit Value

Determine Average Total Net
Benefit Value for the
Comparator Group

Compare Contractors Total Net
Benefit Value to Average for
Comparator Group

Document Assumptions,
Methodology and Results
Provide Contractor Complete
Consultant Package (i.e.
Consultant Certification, Key
Data Elements Executive
Summary and the Value Study).
2

Value Study Process Description
CONTRACTING OFFICER
Pre-Approval Value Study Comparator Group
(See Template: Value Study Comparator Request for Approval Form)

Review Certifications (See Template: Contractor & Consultant Certification)
Obtain justification for any deviations to the DOE requirements.

Review Report for all Necessary Elements
(See Template: Key Data Elements Executive Summary)
Obtain Justification for Any Deviations from DOE Requirements

Determine Acceptability of Results

Send Copy of Complete Value Study Package to Headquarters
Office of Contractor Human Resources Policy Division, MA-612

3

Part I.1. Purpose
Definition and Objectives

General Background Information
An Employee Benefits Value Study (Value Study or Ben-Val) and an
Employee Benefits Cost Survey (Cost Study) must be conducted to satisfy DOE’s
contractual requirement in the Special H-Clause titled Employee Compensation: Pay
and Benefits.
A Value Study is defined as an actuarial study which is intended to measure the
relative worth of competing programs to employees regardless of the actual cost of such
programs to the employer.
The Value Study is performed using a single methodology and set of
assumptions to value all competing programs. By doing so, it normalizes all variables
which impact the cost of the programs other than differences in plan design and benefit
levels themselves. Examples of variables which impact contractor cost which are
normalized in a Value Study are: demographics, election patterns, funding practices,
geographic factors, negotiated pricing, turnover and retirement rates, interest and salary
increase assumptions.
Value Study results make it possible for a contractor with an average benefit
package to pass DOE guidelines even if due to the variables discussed above the
contractor has costs which exceed DOE guidelines. Thus a contractor is not held
responsible for certain factors over which they have only limited control and is held
accountable primarily for the value of the plan design provided.

4

Part I.1. Purpose
Definition and Objectives

DOE Requirements
DOE Benefit Value Study Objective
The Department’s objective is to enable the hiring of world-class nuclear
workforce at DOE Facilities in accordance with the National Defense Authorization
Act of 1997 and1998 (the Acts).
The Acts created The Commission on Maintaining the United States Nuclear
Weapons Expertise (also known as the Chiles Commission). The commission was
directed to develop a plan for recruiting and retaining within the DOE nuclear
weapons complex such scientific, engineering, and technical personnel as the
Commission determines appropriate in order to permit the DOE to maintain over the
long term period a safe and nuclear weapons stockpile. The study revealed the
following: (1) aging nuclear workforce at DOE facilities, (2) there is a strong “war of
talent” in DOE contractor’s competitive market place, (3) number of college students
in the field of science is shrinking, and (4) DOE management and program planning
practices hinder the recruitment and retention of highly skilled workforce. In response
to the commission’s findings, the Department implemented a policy that utilizes
employee benefits as a recruitment and retention tool for highly skilled nuclear
workforce. In order for this policy to succeed, it is necessary to measure the value
benefits. The Value Study is the measurement tool used in determining the
competitiveness of the DOE contractor’s employee benefits program.

5

Part I.1. Purpose
Definition and Objectives
DOE Requirements (continued)
(1)

When conducting a Value Study, the following requirements apply:
(a)

The contractor shall determine a list of no less than 15
participants to be a part of the study. The Contracting Officer
shall approve the list prior to the performance of the study.

(b)

The Value Study shall include major non-statutory benefit
plans offered by the contractor, including qualified defined
benefit plans (except defined benefit plans closed to new
entrants) and defined contribution retirement and capital
accumulation plans, and death, disability, health, and paid
time-off welfare benefit programs.

(c)

The Value Study must be performed by a national consulting
firm with expertise in benefit Value Studies.

(d)

To the extent this methodology does not address postretirement benefit programs, contractors shall provide the
Contracting Officer separate cost and plan design data on postretirement benefits other than pensions compared to external
benchmarks of a nationally recognized survey source on a
regular basis as specified in the terms of the contract.

(e)

Contractors who are participating employers in Multiple
Employer Pension Plans (MEPPs) or Multiple Employer
Welfare Arrangements (MEWAs) whose suite of benefits is
the same as the lead sponsor can rely on the Ben-Val of the
lead sponsor.

Exclusion of Closed Defined Benefit (DB) Plans:
Ben-Val studies will exclude defined benefit plans that are closed to new entrants.
Where there is an open DB plan, the requirement will remain to include that element in the
comparison.
Ben-Vals and Collective Bargaining:
Ben-Val studies for bargaining unit employee benefits will continue to be conducted by
the contractors when contractually required. In such circumstances, however, implementation of
the corrective action plan will not be required solely on the basis of a Ben-Val score of 105
percent. In this situation, the Ben-Val and corrective action plan will be used as an informational
tool that, in conjunction with regional wage surveys and other relevant wage and benefit
information, may assist the contractor in devising economic collective bargaining parameters for
Contracting Officer approval. Contracting Officers will continue evaluating proposed economic
collective bargaining parameters to ensure that parameters, under which Contractors are
authorized to negotiate, are reasonable.
6

DOE Requirements (continued)

Circumstances Where Ben-Vals Are Not Required:
Where contractors provide their employees with benefits through existing corporatelysponsored (e.g., university) benefit programs,
Where the benefits provided to represented employees are the same as the salaried
employees’ benefits, a separate Ben-Val for represented employees is not required as it would
not be a productive use of resources, and
Where contractors are administering benefit programs for closed sites, a Ben-Val is not
required. Instead, contractors administering benefit programs for closed sites should perform
cost studies that compare relevant benefits such as health insurance, life insurance, pharmacy,
dental, etc., to determine if there are more cost effective ways to deliver such benefits to
retirees.
Review and Update of Comparators:
Stability of the comparator companies used in the Ben-Val studies is an important
component in providing useful relative data. Changing too frequently would disturb the value
of the comparative data and changing too infrequently would result in outdated comparisons.
Therefore, a review and update, before each contractor is required to perform its next Ben-Val
study, is appropriate. In addition, contractors should periodically review and update their
comparators, as needed, to ensure the most up-to-date comparisons are being conducted.

7

Part I.1. Purpose
Definition and Objectives
Areas of Concern

In order to provide assurance that the Value Study provides a valid measure of
the appropriateness of a contractors benefit programs with respect to DOE guidelines,
enforcement of the following Value Study components are of critical importance:
 The comparator group of companies selected must represent the
contractor's labor market.
 The data utilized must be current, complete and accurate.
 The consulting firm selected must have expertise in performing such studies.
 The valuation methodology and assumptions must be reasonable for the
benefits valued.
 DOE guidelines must be followed with respect to development of
results and documentation of methodology and assumptions.
 Consistency of the comparator group, methodology and assumptions
between initial and subsequent studies is essential.

8

Part I.1. Purpose
Implications of Results
General Background Information
A Cost Study provides a comparison of the contractor’s per capita cost per fulltime equivalent employee and the percent of payroll cost to a published broad based
national employee benefits cost survey approved by the Contracting Officer. Thus a
comparison is made of the actual cost of the contractor's plan to the average cost of the
survey population.
A Value Study does not measure the contractor's or competing participant's
actual cash-flow costs. Instead, a theoretical cost value for each program is actuarially
assigned based solely on the plan design provisions and a standard methodology and
assumptions. Under this approach, all participants with the same plan provisions will be
calculated to provide the same dollar value of benefits regardless of the participant's
actual cost. Thus, random differences in cost due to a variety of non-benefit related
variables are eliminated from the Value Study results.
A Value Study result that says the contractor is 105 percent of the comparator
group (i.e., 5% above) indicates that the contractor's employees are actuarially projected
to receive 5% more benefits than if they were covered under the average plan design of
the comparator group. The actual cost of providing such benefits may be higher or
lower than the average cost for the comparator group.

9

Part I.1. Purpose
Implications of Results

Illustrations
Life insurance provides a simple illustration of the implications of the Value
Study concept compared to a Cost Study. Actual life insurance premiums vary by age
of the underlying employee group and their prior claims experience. Under a Value
Study, the impact of these variables on the results is eliminated.

Contractor

Employer A

Employer B

Cost Study
Life Insurance
Actual Premium
Actual Monthly Cost
Peer Group Average
% of Average

$ 95,000
$0.23/$1.000
$ 21.85
$ 20.00
109.00%

$ 100,000
$0.16/$1.000
$ 16.00

$ 100,000
$0.24/$1.000
$ 24.00

$ 95,000
$0.20/$1.000

$ 100,000
$0.20/$1,000

$ 100,000
$0.20/$1.000

$ 20.00

$ 20.00

Value Study
Life Insurance
Theoretical
Premium
Monthly Cost
Peer Group Average
% of Average

$ 19.00
$ 20.00
95.00%

A Value Study gives a different picture than a Cost Study would of how the actual
benefits to be received by an employee's beneficiary upon death compare to the average
benefits paid by the comparator group.

10

Part I.2. Value Study Compared to Cost Study Demographic Differences

General Background Information

One characteristic of a Cost Study is that an employer with high cost
demographics can be judged to be non-compliant with DOE’s 5% above average cost
guidelines, even if it offers average benefits based on the value. That is, under certain
demographic profiles, an average benefit program will cost more than 5% above average.

A Value Study eliminates the impact of demographics by utilizing a single
demographic profile for assigning an actuarial value to each employer’s benefit package.

Areas of Concern
The demographic profile used in the Value Study can skew the weighting of the
relative values between different plans, i.e., health care and retirement benefits, or paid
time off and disability coverage, etc. Thus, the demographic assumption used must be
reasonable in comparison to the contractor’s actual demographics. See Part III.2 for
more information on the impact of demographics.

11

Part I.2. Value Study Compared to Cost Study
Election Patterns

General Background Information

One characteristic of a Cost Study is that an employer with a higher
percentage of family coverage, or higher percentage of 40l(k) participation, than its
comparator group can be judged to be non-compliant with DOE's 5% above average
cost guidelines, even if it offers average benefits based on the value. That is, under
certain family coverage or 401(k) participation profiles, an average benefit program
will cost more than 5% above average.
A Value Study eliminates the impact of election patterns by utilizing a
single set of election assumptions for assigning an actuarial value to each
employers benefit package.

Areas of Concern

The election pattern assumed in the Value Study can skew the rating of the
relative values between different plans, i.e. health care and paid time-off, or defined
benefit and 401(k) coverage, etc. Thus the election pattern used must be reasonable
in comparison to the contractor’s election patters. See part III.2 for more information
on the impact of election patterns.

12

Part I.2. Value Study Compared to Cost Study Funding Differences

General Background Information

Health care cost information presented by an employee benefits cost survey is
impacted by employer funding decisions. It is impossible to assure and very unlikely
that self- funded costs are calculated and reported on the same basis as insured
programs. In addition, differences in actuarial assumptions can result in a broad range
of possible cost for defined benefit programs. These differences are eliminated in a
Value Study by using a single set of valuation assumptions and methodology for
determining the value of competing programs.

Illustrations

A comparison of insured and self-funded health care plan rates show that even if
the self- funded plan uses the same reserve levels and administrative expenses as an
insured product (which in actual practice would probably not be the case) the insured
plan will almost always include a claims fluctuation margin ranging from 2 to 5 percent.
This results in the cost reported by employers differing even when the benefits are
identical.

Incurred and Paid Claims
Reserves
Administrative Expenses
Margin

Insured

Self-Funded

$1,000
$ 250
$ 50
$ 26
$1,326

$1,000
$ 250
$ 50
$ ---$1,300

A Value Study eliminates the impact of this issue by using a single set of
valuation assumptions and methodology.

Areas of Concern

The assumptions used in valuing a defined benefit plan should be a reasonable
projection of future experience under the plan. See Part III.2 for additional information.
In addition, this concern is covered by the Actuarial Certification contained in Appendix
C. Any concerns in an actual study should be referred to the Office of Contractor
Human Resources Policy Division for technical review.

13

Part I.2. Value Study Compared to Cost Study
Geographic Factors

General Background Information

Cost of providing medical coverage can vary dramatically based on where
employees are located. For example, medical plan costs in Los Angeles may average
two times the cost of the same plan in the rural Midwest. Likewise, dental costs in
Los Angeles may be 1.7 times the cost of the same plan in the rural Midwest.
Thus, one characteristic of a Cost Study is that an employer in a high cost
geographic area can be judged to be non-compliant with DOE 5% above average cost
guidelines even if it offers average benefits based on the value. That is, under certain
geographic distributions of employees, an average benefit program will cost more than
5% above average.
A Value Study eliminates the impact of geographic distributions of employees
by utilizing a single set of actuarial cost factors regardless of the geographic area in
which employees are located.

14

Part I.2. Value Study Compared to Cost Study
Negotiated Pricing

General Background Information

Significant differences in contract terms and rates can exist in either insured or
administrative service only contracts for self-funded benefit programs. These
differences clearly impact the results of a Cost Study. These differences are eliminated
in a Value Study through the use of a single set of cost factors which are related strictly
to benefit plan design. As such, the relative strength of the negotiator's expertise does
not impact the Value Study results. In addition, most standard HMO plans will receive
a higher relative value in a Value Study than a traditional indemnity medical plan even
though the cost of the HMO may be lower due to its managed care characteristics.

Areas of Concern

The DOE is concerned that the results of a Value Study may not reflect the
relative effectiveness of the contractors’ rate negotiations. Therefore, if a Value Study is
utilized, the Contracting Officer should be particularly diligent in administering DOE O
350.1 Chapter V Paragraph (b) (1), (2), and (13) to assure that effective cost
management of the benefits program is being pursued by the contractor.

15

Part I.2. Value Study Compared to Cost Study
Turnover and Retirement Issues

General Background Information
Employers with high turnover and low early retirement rates will realize less cost
for their defined benefit retirement program than those with low turnover and high early
retirement rates. Similar to demographic differences, election patterns, and geographic
factors, these factors can cause one contractor to fail a Cost Study, while another
contractor with identical benefit programs would pass due to such differences in actual
experience. This issue is eliminated from a Value Study by using a common set of
turnover and retirement assumptions to value each employer's plan.

Areas of Concern

The turnover and retirement assumptions used in the Value Study can skew the
results of the defined benefit plan values due to differences in accrual rates and early
retirement subsidies. These assumptions can also skew the comparison between
different plans, i.e. defined benefit and 401(k). Thus the turnover and retirement
assumptions used must be reasonable in comparison to the contractor's actual
experience. See Part III.2 for more information on the impact of turnover and
retirement assumptions.

16

Part II.1. Comparator Group Selection
Definition of Market

General Background Information

Unlike Cost Study guidelines which preclude selection of individual employers
by the contractor, a Value Study is predicated on selection of a relatively small number
of employers by the contractor to serve as their comparator group. This makes it
critical that the comparator group selected is representative of the market in which the
contractor competes for employees.

Special H-Clause titled Employee Compensation: Pay and Benefits
When selecting the benefit value study comparator group, the following
requirements apply
(a)The contractor shall determine a list of no less than 15 participants to
be part of the study. The Contracting Officer shall approve the list prior
to the performance of the study.”
This shall be interpreted to mean 15 participants in addition to the
contractor.

17

Part II.1. Comparator Group Selection
Definition of Market
DOE Guidelines for Preparation and Review
All 15 or more study participants must be approved in advance of the study by the
Contracting Officer as representing the appropriate market in which they compete for
employees.
Value Study Methodology
•

Value Study participants represent the contractor’s parent organization, where
applicable, and organizations in the same industries from which the contractor
competes for employees.

•

No other DOE contractors are required to be participants. However, if they are
used, no more than 20 percent of the participants may be DOE contractors.

•

Participants for multi-employer plans (site-wide plans) proportionately represent the
different contractors within the plan.

The following additional clarification is provided to further define the competitive
market from which comparator firms are to be selected:
•

All study participants must compete for exempt level professional staff (nonexecutives) in the same industry as the contractor, or

•

In rare situations, a contractor may propose an unexpected comparator company because
of job losses to that employer. In these situations, the contractor must document that they
have gained or lost more than 4 exempt level professional staff (non-executives) to the
comparator firm during the prior 5 years who have the same skill sets as professional staff
of the comparator firm. Such conditions should be certified by the contractor as shown in
Appendix A along with submission of appropriate documentation.

•

Subsequent studies should use identical comparator groups unless advance approval is
granted by the Contracting Officer.

Areas of Concern
The results of a Value Study are extremely sensitive to the comparator group
selection. To avoid invalid conclusions, it is critical that the Contracting Officer
approve the appropriateness of the market comparator group prior to commencement
of the study. Subsequent studies should require use of an identical comparator group.
The DOE is concerned that replacement of a low-value participant with a high-value
participant in a subsequent study could significantly alter the study results in the
contractor's favor. Lack of willingness to provide current data by a prior study
participant should be independently verified by the Contracting Officer before they are
allowed to be replaced in the comparator group of a subsequent study.

18

Part II.1. Comparator Group Selection
Database Implications

General Background Information

Several National Consulting firms maintain and update databases of employee
benefit plan design for specified employers on an annual basis. However, data may be
custom surveyed from employers not participating in the general database for the
purpose of performing a Value Study.

DOE Guidelines for Preparation and Review

The DOE is equally comfortable with the contractor selecting participants from
an existing database or requesting their consultant to custom survey participants.
Regardless of the approach however, participants:
• Must satisfy the “Definition of Market”.
• Must have supplied current data (see Part II.3. Data Collection and Validation),
• Must meet the minimum number of participants in addition to the contractor (15),
and,
• Must remain consistent from one Value Study to the next.
The DOE recognizes that the cost of the study may be impacted by the need to
conduct a custom survey in the initial or subsequent years. However, the lack of
participation of approved participants in a particular database should not override the
need to meet all four of the guidelines previously stated if such guidelines can be met
through a custom survey.

Areas of Concern

In order to minimize the cost of the Value Study a contractor may wish to use
participants in an existing database. The contractor's desire to use an existing
database will not be a justification to modify DOE requirements for comparator
group selection.

19

Part II.2. Employee Group Selection

General Background Information

Employers may specify different levels of benefits for different subsets of
employees. Typical subsets may include bargained employees, non-bargained hourly,
salaried and executives. Subsets other than the four listed above may also be identified,
e.g., incumbent employees and new hires, as may be required by the terms of a followon contract.

DOE Guidelines for Preparation and Review

In order to ensure apples to apples comparisons, a single subset of employees
must be specified. Benefits information applicable to that subset of employees for each
of the comparator group employers must be collected and valued on a consistent basis.
The benefits data collected for a Value Study under DOE guidelines should be that
applicable to exempt level professional staff (non-executives). The contractor and
consultant should each certify that the appropriate subset has been used in accordance
with Appendices B and C.

Areas of Concern

The use of the definition salaried employees has specifically been avoided due to
the overly broad use of the term. The term salaried may encompass non-exempt
salaried, salaried non-professional, salaried professional, and executive staff. It has been
determined that the value added by DOE contractors stem primarily from our access to
the work product of their exempt-level professional staff. Therefore, the benefit plans
valued for each employer in the comparator group should be those provided to this level
of employee.

20

Part II.3. Value Study Preparation
Consultant Selection

General Background Information

It is the intent of the DOE to allow Value Studies to be performed by any qualified
national consulting firm with expertise in performing such studies. In doing so,
it is recognized that minor differences in the approach to data collection and validation,
valuation methodology and assumptions, and report presentation will arise. It is not the
intent of the DOE to prescribe how such studies are performed as to do so may preempt
the contractor's freedom to choose their consultant. The guidelines in this manual have
been developed with the intention that the broadest latitude be granted in the
performance of such studies while ensuring compliance with the minimum standards
necessary to provide valid and consistent results.

Special H-Clause titled Employee Compensation: Pay and Benefits
DOE requires that the Value Study must be performed by a national
actuarial consulting firm with expertise in benefit value studies.

DOE’s Guidelines for Preparation and Review
To satisfy the definition as a national consulting group, the DOE would expect the
consultant to have revenues in excess of $5,000,000 annually.
It addition, it is required that a qualified actuary within the firm will provide a
certification, as shown in Appendix C, of the firm’s expertise in performing such studies.

Areas of Concern

It is difficult in advance to judge the qualifications of the selected consultant.
However, the actuarial profession is expected to adhere to a Code of Professional
Conduct. (see Exhibit B) As such, the DOE is willing to rely on an actuarial certification
as outlined in Appendix C to insure that the study has been performed in accordance with
DOE guidelines regarding consultant expertise. In the absence of such an actuarial
certification, it is expected the consultant will substitute such documentation and proof of
its expertise as necessary to comply with the requirements of the contract.

21

Part II.3. Value Study Preparation
Data Collection and Validation

General Background Information

Critical to the accuracy of the valuation project is the collection of complete,
accurate and up-to-date data on the comparator groups benefit plans. Due diligence
should be exercised to ensure all data utilized is sufficient and appropriate to
development of the Value Study results.

DOE Guidelines for Preparation and Review

The contractor shall ensure that the comparison organization's benefit data is
up-to-date (as of the beginning of the evaluation year). As a practical matter, this
responsibility may be delegated to the consulting firm utilized.
Due to the possibility of evaluation years not corresponding with the calendar
year or the plan years for the comparator group we will clarify the definition of up-todate. Participant data is considered up-to-date if it accurately reflects the participants'
plans as of the January 1 coincident with or immediately preceding (if the evaluation
year is other than a calendar year) the first day of the evaluation year. For example if
the evaluation year is July 1, 2011 through June 30, 2012, participant data which is
accurate as of January 1, 2011 or later shall be considered up-to-date.
The consultant shall be required to include a statement as to the current status of
the data as part of their actuarial certification (see Appendix C).
If in a subsequent year the participant is unwilling to supply current data, the
Contracting Officer is responsible for independently verify such position with the
consultant. If it is determined that current data meeting the guidelines is not available,
the contractor should request a change of comparator group through their DOE
Contracting Officer with an explanation of the reason for such request. Such change in
comparator group must be approved before the Value Study is undertaken.
Areas of Concern

Certain benefit plan provisions may change annually, e.g. employee
contributions, or profit sharing contributions. These changes can materially affect the
Value Study results. Therefore the Contracting Officer must enforce this aspect of the
DOE requirements to ensure valid results are received.

22

Part III.1. Overview

General Background Information
The valuation methodology utilized to produce a Value Study is intended to
develop a theoretical actuarial value of benefits provided by an employer. This
theoretical value is developed using a single assumed demographic profile for all
participants and a single set of economic assumptions. Thus, variations in value from
one participant to the next are strictly related to differences in benefit provisions
between the plans.

23

Part III.2. Assumptions
Demographics

General Background Information

Demographic data include age, salary and service data. Cost Studies are very
sensitive to demographics. Average costs recorded by cost surveys reflect the average
demographic profile of all employers in the database. Costs for all benefits valued are
highly sensitive to these demographics, with higher costs generally associated with
higher ages, higher salaries and longer service. Thus a contractor with an average
benefit plan, but high cost demographics, can easily exceed 105 percent of average
cost under the cost survey study.
A Value Study eliminates the impact of these demographic differences by
utilizing a common set of demographics to value all participants’ plans. Thus the result
of the Value Study is not affected by differences between the demographic profiles of
the contractor and the other study participants.

DOE Guidelines for Preparation and Review

The Value Study report should include a statement regarding whether the
contractors actual demographics were used to value the plans or an assumed general
population demographic profile. Both alternatives are acceptable. However, once an
alternative has been selected, the same approach should be used for all future Value
Studies so that trends may be analyzed and consistency of analysis assured. Advance
approval must be obtained from the Contracting Officer prior to changing the basis of
the demographic profile for subsequent studies.

24

Part III.2. Assumptions
Demographics

Illustrations

The impact of differences in demographics on a Cost Study can be illustrated by
comparing theoretical differences in cost between an assumed general population and an
illustrative contractor population.
General Population
Average Salary
Average Age
Average Service

Illustrative Contractor

$40,000
38
8

$ 51,000
40
12

Even with the minor demographic differences above, the contractor would likely
fail a Cost Study if they offered an average benefit program. Under a Value Study, all
participants' benefit plans in the above illustration would be valued under a single set of
demographics (i.e., either the contractor's own demographics or a general population
assumption). In either case, if the contractor offered average benefits, their value under
the study would be 1.00 which would satisfy the DOE requirements.

Areas of Concern

Using either the contractor's demographics or general population demographic
assumption should lead to satisfactory results if used consistently from study to study.
The primary concern therefore is that the assumption may be changed from one study to
the next or that a non-standard population assumption could be developed which favors
the contractor's program. Both of these issues are addressed in the requested Actuarial
Certification shown in Appendix C.

25

Part III.2. Assumptions
Election Patterns

General Background Information

Election patterns exist for a variety of benefits including family coverage
categories for medical/dental coverage, 401(k) plans and partially contributory death
and disability benefits. For each benefit, the employers cost may vary by the benefits
elected by employees. Thus, election patterns can make a significant difference in the
results of both cost studies and value studies. In addition, if multiple benefit options are
offered, or even under flexible benefits, the distribution of benefit elections will impact
both cost and value studies.

DOE Guidelines for Preparation and Review
Using either (1) the contractor's election patterns, (2) a standard election pattern,
(3) the average election pattern for the participant group, or (4) each participant's
specific election pattern, is acceptable. However, once an alternative has been selected,
the same approach should be used for all future Value Studies so that trends may be
analyzed and consistency of analysis assured. Advance approval must be obtained from
the Contracting Officer prior to changing the basis of the election patterns assumed for
subsequent studies.
If an average election pattern for the participant group or an assumed standard
population election pattern is used, the assumption should be reviewed to assure that no
benefit type (i.e., medical, dental, disability, etc.) with a company contribution is
assumed to be elected less than 50% of the time. If an assumption of less than 50% is
used, the assumed election pattern should be forwarded to the DOE/headquarters office
for further technical review and approval.
With respect to elections within a benefit type (i.e., multiple medical and dental
plans), either an assumption that everyone is enrolled in the plan with the highest
participation or that gives a weighted value based on actual enrollment should be
acceptable, as in practice only minor differences in value will occur.

26

Part III.2. Assumptions
Election Patterns

Illustrations
The impact of differences in election patterns on a Cost Study or Value Study
can be illustrated by comparing the difference in cost/value between an assumed
general population and an illustrative contractor population using an average plan
design.

General Population

Contractor Population

Single Medical Premium
Family Medical Premium
Single Enrollment
Family Enrollment
Cost/Value

$ 1,000
$ 2,750
50%
50%
$ 1,850

$ 1,000
$ 2,750
20%
80%
$ 2,400

401(k) Participation
Average Pay
Avg. 40 1(k) Match - $.50
Match on 6% of Pay

60%
$40,000

80%
$51,000

$ 720

$ 1,224

Areas of Concern

A Value Study utilizing employee only medical and dental values would be
inappropriate as many employers traditionally subsidize family benefits. Likewise an
assumption that everyone has family benefits would weight these benefits too highly in
the Total Benefit Value. Any of the four approaches described in these guidelines is
acceptable.

27

Part III.2. Assumptions
Interest and Salary Scale

General Background Information

An interest and salary scale assumptions are used to project the economic value
of long term benefit obligations. Examples of long term benefit obligations are defined
benefit retirement plans, and other post-retirement health and welfare benefit programs.

Areas of Concern
Long term benefit obligations can make up significant portion (well in excess
of 10%) of the total value of benefits provided. Thus, to avoid skewing of the overall
results, such benefits must be valued under realistic assumptions.

28

Part III.2. Assumptions
Missing Data

General Background Information

The validity of the Value Study results is directly related to the quality of the
data utilized. Inaccurate and incomplete data will result in questionable results.

DOE Guidelines for Preparation and Review

Because the contractor is in complete control of its own data, no study should
be accepted based on incomplete data from the contractor.
With respect to other study participants in the comparator group, every effort
must be made to assess and ensure completeness of the data utilized. If data is missing,
the most conservative assumption should be made, i.e. the assumption resulting in the
lowest relative value for the participant's plan. In many cases this will mean assuming
that the participant's benefit for the missing data has a Net Benefit Value of $0. Any
other assumption requires submission of supporting rationale to the headquarters office
in advance of study completion. An actuarial certification as to the completeness of the
data may be relied upon by the Contracting Officer absent any evidence to the contrary.

Areas of Concern

Refer to Part II.2 on data collection and validation.

29

Part III.2. Assumptions
Turnover and Retirement
General Background Information

Turnover and retirement assumptions are used to project the economic value of
long term benefit obligations. Examples of long term benefit obligations are defined
benefits retirement plans, and other post-retirement health and welfare benefit
programs.

DOE Guidelines for Preparation and Review

The DOE does not intend to be prescriptive with respect to these assumptions at
this time. However the following assumptions are considered unacceptable for
purposes of a Value Study, submitted to the DOE.
Unacceptable Assumption
Turnover:
Retirement:

No Turnover
No Early Retirement

Assumptions for turnover and retirement should be documented in the Value
Study report for the purposes of verifying consistency between successive reports.

A statement should be included in the actuarial certification (Appendix C)
representing that the assumptions result in a reasonable projection of anticipated
experience under the plans valued.

Areas of Concern

Manipulation of turnover and retirement assumptions can materially impact
study results. Therefore the reasonableness of the assumptions must be certified by the
actuary preparing the study.

30

Part III.3. Valuation Methodology
Capital Accumulation
General Background Information
Any benefit program which provides for the accumulation of account balances to be
paid in a subsequent tax year (e.g. following retirement, termination, death or disability) is
considered a Capital Accumulation Plan. The account balance may be expressed in dollars
or share/units of stock depending on the underlying investments
and accounting methodology.
The definition of capital accumulation plans includes all typical defined
contribution plans, i.e. profit sharing, 401(k), money purchase. In addition it may
include Stock Purchase plans where a significant employer discount from market price
is provided.
Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by the
contractor, including...capital accumulation plans...

DOE Guidelines for Preparation and Review
Some consultants will include stock purchase plans in their definition of Defined
Contribution or Capital Accumulation Plans.
Other consultants include only employee stock ownership plans where all
employees receive an allocation of company paid stock, or plans which match employee
401(k) contributions in stock, and do not include discounted stock purchase plans in their
value study results under the theory that the discounted purchase is not a benefit.
DOE is willing to accept either approach with respect to the inclusion/exclusion of
stock purchase plans as long as it is consistent in subsequent value studies performed for
the contractor.
Issues regarding valuation of all other forms of capital accumulation are
discussed in the section on defined contribution valuation.

Areas of Concern

See defined contribution valuation section. Consistency in valuation
methodology between subsequent Value Studies should be maintained to avoid
gamesmanship of results.

31

Part III.3. Valuation Methodology
De Minimis Benefits

General Background Information

Each consulting firm has developed standard procedures for collection of benefit
data which are unique to their organization. As such, the level of plan design detail
utilized by different consulting firms to develop the values in the study will be different.

Special H-Clause titled Employee Compensation: Pay and Benefits
All major categories of benefits should be included in the study including postretirement benefit programs (PRB) other than pension (defined benefit or defined
contribution).

DOE Guidelines for Preparation and Review

It is the intent that all major benefit provisions be valued. For purposes of these
guidelines, it is anticipated that the Net Benefit Value of any benefit not valued in the
study be less than 1% of the Total Net Benefit Value for the employer. Examples of
such benefits may be dependent life coverage, accidental death and dismemberment
benefits, hearing and in some cases vision benefits. Absent information to the contrary,
the Contracting Officer may rely on a statement similar to that contained in the sample
actuarial certification in Appendix C that all benefits have been included in the study
which will have at least a 1% impact on the Total Net Benefit Value.

32

Part III.3. Valuation Methodology
Death

General Background Information

Depending on the consulting firm utilized, the value of death benefits may be
limited to life insurance, or may include the value of survivor income plans, and preretirement death benefits under a defined benefit or defined contribution plan.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by
the contractor including...death...benefit programs.

DOE Guidelines for Preparation and Review

Life insurance should be valued in all Value Studies. Ancillary death benefits
provided under a defined benefit plan need not be explicitly valued as long as they are
not valued for any of the participants. Death benefits payable under a defined
contribution plan need not be valued if a current total value approach, rather than a
projected value approach is used to value the defined contribution plan (see a
description of these approaches in Part III.3. Valuation Methodology - Defined
Contribution).

Areas of Concern

Substantial variation exists between consulting firms in the approach to valuing
death benefits. While the DOE does not wish to be prescriptive in determining the
approach used, it should follow the guidelines given above. In addition, once chosen,
the methodology should remain consistent for subsequent valuations.

33

Part III.3. Valuation Methodology
Defined Benefit
General Background Information

A defined benefit plan includes any promise to pay a pre-determined benefit
upon retirement of a plan participant if they meet the plans eligibility criteria. The
benefit is typically a function of pay and/or length of service. Defined benefit plans
are plans filed with the Internal Revenue Service and the Department of Labor, and
include hybrid plans such as cash balance plans and pension equity plans. A frozen
defined benefit plan is closed to new entrants and has frozen benefit accruals. A
closed defined benefit plan is closed to new entrants.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by
the contractor including qualified defined benefit programs.

DOE Guidelines for Preparation and Review
Under DOE O 350.1 Chapter V, Paragraph 4.b.(14) the DOE is responsible for
reimbursement of retirement benefits paid subsequent to contract termination for those
who have earned such benefits. Therefore, the value of such benefits should be
calculated on a basis consistent with the methodology for calculating the Service Cost
component of the Net Periodic Pension Cost under the Unit Credit Method.
A statement from the valuation actuary similar to that contained in Appendix C
shall be considered sufficient to verify such benefits have been properly valued, absent
evidence to the contrary.
The Ben-Val should exclude defined benefit plans closed to new entrants as
described on page 39 under the section DOE Guidelines for Preparation and Review in
Part III.3.

Areas of Concern
The consultant may or may not value ancillary benefits for death and disability
provided through the defined benefit plan. Either approach is acceptable as long as it is
applied consistently to all participants and does not change for subsequent valuations.

34

Part III.3. Valuation Methodology
Defined Contribution
General Background Information
Defined contribution programs specify a formula by which a contribution is
made to an individual account for the participant which is paid out in a subsequent tax
year (e.g. following retirement, termination, death or disability). The definition of
defined contribution plan includes profit sharing, 401(k) and money purchase plans.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by the
contractor including defined contribution retirement.

35

DOE Guidelines for Preparation and Review

Two distinct methods are utilized by consultants to assign the value of defined
contribution benefits. Either approach is acceptable as long as it is used consistently in
subsequent valuations. No universal terminology has been agreed upon to describe these
approaches. The terminology used in this guideline is intended to be descriptive in
nature only.
The current total value approach assigns a value based on the expected
contribution to the plan as a percentage of pay in the current year. Assumptions to
election patterns for voluntary programs (e.g. 401(k)) are discussed in Part III.2.
Assumptions.
A second approach used by some consulting firms is the projected value
approach. Under such an approach the accumulated account balance is projected using
assumptions regarding contributions, interest earnings, and turnover/retirement rates.
This projected account balance is then assigned a value by a process similar to a defined
benefit plan. As such, portions of the defined contribution value may be reassigned
as death benefits, disability benefits, and retirement benefits-in the final report.
If the benefits include a closed defined benefit plan for grandfathered employees, the
retirement benefits for the new hires should be substituted for the retirement benefits for the
grandfathered employees as described on page 39 under the section DOE Guidelines for

Preparation and Review in Part III.3.
Defined contribution plans employer contributions typically have two components – a
non-matched employer contribution for all employees independent of employee deferrals,
and a matched employer contribution based on the employee deferrals. The non-matched
benefit should be included with any defined benefit plan under the category of retirement
benefits – non-matched, and the defined contribution plan matching contributions should be
in the category retirement benefits – matched.

Areas of Concern

Regardless of approach used, the consultant should meet the guidelines for
valuation assumptions discussed in Part III.2.Assumptions. The approach and
assumptions should be consistent in subsequent valuations in order to provide stable
results.

36

Part III.3. Valuation Methodology
Disability
General Background Information

Disability programs include sick leave, salary continuance, short term disability,
long term disability, and any other program which provides benefits for employees who
are unable to attend work due to illness or recovery from an accident. For reporting
purposes such programs may be combined into one or more subcategories or reported
separately.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by the
contractor including disability.

DOE Guidelines for Preparation and Review

Disability benefits should be included in all Value Studies. Ancillary disability
benefits provided under a defined benefit plan need not be explicitly valued as long as
they are not valued for any of the participants. Disability benefits payable under a
defined contribution plan need not be valued if a current total value approach, rather
than a projected value approach is used to value the defined contribution plan (see a
description of these approached in Part III.3. Valuation Methodology -Defined
Contribution).
The report should cover valuation of all disability benefits regardless of duration
and whether they are insured or administered as salary continuance/sick leave.
Areas of Concern

Informal leave programs (i.e., those available by supervisory approval only)
should be included with a value of $0 unless the participating employer can provide
average utilization data from which an assumed level of coverage can be derived. The
contractor is required to provide average utilization data on any Informal Leave
Programs provided to their employees - covering the contractor's employees as a $0
disability benefit value is considered unacceptable for purposes of developing Value
Study results.

37

Part III.3. Valuation Methodology
Flex

General Background Information

A Flexible Benefits program traditionally gives employees a pool of dollars they
may use to spend on those benefits which are most desirable to them as an individual.
DOE Guidelines for Preparation and Review

If any of the participating companies offer flexible benefits, the consultant should
provide a description of how Flex credits impact the results of the study.
The Contracting Officer should review this description to determine how
E xcess Flex Credits, if any, are factored into the Total Net Benefit Value. Excess Flex
C redits are defined as credits in excess of the amount necessary to purchase the benefits
assumed to be selected.
In addition, if a cash option exists for benefits waived, the consultant should
disclose the impact of these waiver credits on the calculation of the Total Net Benefit
Value.

Areas of Concern

The treatment of flexible benefits is primarily only of concern if the contractor
offers a flexible benefits program. If the contractor offers such a program it is important
to make sure that the value of any Excess Flex Credits or any waiver credits, is
appropriately reflected in the Total Net Benefit Value. As this is an area were
substantial creativity in plan design may exist, the Contracting Officer may wish to
request additional review of the methodology for dealing with flex credits by the
Headquarters office if a flexible benefits program exists for the contractor.

38

Part III.3. Valuation Methodology
Grandfathered Benefits
General Background Information
Employers who redesign their benefit program will occasionally choose to
grandfather certain subgroups of employees in their prior benefits. Examples include
grandfathering all employees hired before a specific date, or all employees who have
met certain age and for service requirements on the date of change.

DOE Guidelines for Preparation and Review
If there is evidence of grandfathered benefits, the consultant should value both
the current and grandfathered benefits levels. A single Total Net Benefit Value should
be developed based on the weighted average value of the current and grandfathered
benefits. The weighting is utilized to approximate the current mix of grandfathered and
redesigned benefits. A simple weighting utilizing the relative proportion of
grandfathered vs. non-grandfathered employees as of the beginning of the
evaluation year (January 1 coincident with, or immediately preceding the evaluation year
if it is other than a calendar year) maybe used in lieu of specifically valuing each separate
population. For employers with defined benefit plans that are closed to new hires, the
non-matched and matched retirement benefits for the new hires should be substituted for
the grandfathered non-matched and matched retirement benefits. Substituting the current
retirement benefits for the grandfathered retirement benefits is based on the theory that if
not for the value of the continuing benefit accrual under a defined benefit plan closed to
new entrants, grandfathered employees would otherwise receive new hire retirement
benefits. If the only difference between the benefits for the grandfathered employees and
the new hires is the retirement benefits, then the Ben-Val score should result in the same
for grandfathered employees and new hires.
To the extent that there becomes a third level of benefits with a different defined
contribution benefit and, perhaps, different other benefits, the contractor should discuss
the appropriate valuation approach with the actuary and the Contracting Officer to
determine an approach that is in the spirit of these guidelines.

Areas of Concern
Depending on the rate of turnover and the benefit involved, the impact of
grandfathered benefits can be a significant cost factor for many years. The DOE
guideline is designed to ensure that only reasonable costs of benefits are reimbursed.
Thus, if the value of the grandfathered benefit were not recognized, a contractor's plan
which might otherwise fail the 5% test could be brought into compliance by simply
modifying benefits for future employees, even though the current benefit costs in total
would fail the DOE acceptability tests.

39

Part III.3. Valuation Methodology
Health
General Background Information
Health Benefits include medical and dental plans. Many plan designs may carve
out pieces of the coverage for coverage under a stand-alone plan, e.g. mental health and
substance abuse, or prescription drugs. All significant Healthcare Benefits should be
included in the Value Study.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans
offered by the contractor including health.

DOE Guidelines for Preparation and Review

All health benefits which could significantly impact the results of the Benefit
Value Study should be included. The Contracting Officer may rely, lacking evidence
to the contrary, on an actuarial certification similar to that contained in Appendix C
which states that the anticipated Net Benefit Value of any benefit not valued in the
Value Study is less than 1% of the Total Net Benefit Value.
The consultant's valuation methodology should assign value based on the plan
design parameters (e.g. deductibles, co-pays, limits, etc.) and not on the participants'
cost of providing such benefits.

Areas of Concern
None, other than inclusion of all significant benefits be verified.

40

Part III.3. Valuation Methodology
Paid Time Off

General Background Information

Paid Time Off includes vacation and holiday pay. Such programs may be
administered on a stand-alone basis or as part of a combined leave policy which includes
coverage for brief periods of incapacity due to illness or injuries.
Most consultants value one day of paid time off as the equivalent of 1/260th
of projected annual base pay. Thus, Paid Time Off has a significant impact on the
Total Net Benefit Value.

Special H-Clause titled Employee Compensation: Pay and Benefits
The Value Study shall include major non-statutory benefit plans offered by the
contractor including ....paid time off welfare benefit programs.

DOE Guidelines for Preparation and Review

The Contracting Officer may rely, lacking evidence to the contrary, on an
actuarial certification similar to that contained in Appendix C which states that "The
valuation assumptions and methodology utilized produce a reasonable projection of the
value provided by the participant's benefit plans."

Areas of Concern
See Part III.4 Informal Programs - PTO

41

Part III.3. Valuation Methodology
Post-Retirement Health and Welfare Benefits
General Background Information
Post-Retirement Health and Welfare Benefits for this purpose are defined
as any benefit paid following retirement such as medical benefits and death
benefits, excluding qualified defined benefit and defined contribution retirement
and capital accumulation plans.

Special H-Clause titled Employee Compensation: Pay and Benefits
To the extent this methodology does not address post-retirement benefit
programs, contractors shall provide the Contracting Officer separate cost and plan
design data on post-retirement benefits other than pensions compared to external
benchmarks of a nationally recognized survey source.

DOE Guidelines for Preparation and Review
Under DOE O 350.1 Chapter V.4.b.(14) the DOE is responsible for
reimbursement of post-retirement health and welfare benefits paid subsequent to
contract termination for those who have earned such benefits. Therefore if such
benefits are part of a Value Study the value for such benefits should be calculated on
a basis consistent with the methodology for calculating the Service Cost component
of the Net Periodic Post- Retirement Benefit Cost under the Unit Credit Cost
Method.
A statement from the valuation actuary similar to that contained in Appendix C
shall be considered sufficient to verify such benefits have been properly valued absent
evidence to the contrary.

Areas of Concern

Not all consulting firms have developed the standard methodology necessary
to include Post-Retirement Benefits in their Value Study in accordance with DOE
guidelines. Unless the consulting firm certifies that they have valued such programs
in accordance with DOE guidelines, the total benefit values developed should
exclude such benefits and they should be separately addressed.

42

Part III.4. Informal Programs
Paid Time Off
General Background Information
Some employers do not provide formal paid time off programs.
An example is University faculty who may be under contract to provide services
for a stated number of months per year and are compensated based on the number of
months under contract. During the contract period, faculty is responsible for providing
services to the University and can take time off for illness, seminars, or other personal
reasons without adversely affecting their compensation as long as their basic duties are
performed.
DOE Requirements
"The Value Study shall include major non-statutory benefit plans
offered by the contractor including ....paid time off welfare benefit programs".

DOE Guidelines for Preparation and Review
The value assigned to informal PTO programs shall be calculated in accordance
with the following philosophies, as interpreted in the following paragraphs
-

The contractor's value must be substantiated by data from the contractor.
The comparator group participants' values shall be assumed to be 0
unless utilization levels can be substantiated by actual data.

When valuing an informal PTO program of the contractor, if any, the consultant
must rely on data provided by the contractor which substantiates the average number of
days taken off with pay during a recent twelve month period and shall treat such days as
if they have been provided under a formal program.
When valuing the informal PTO program of one of the comparator group
participants, the consultant shall assume such participant has a PTO program with 0
value, absent evidence which can be substantiated to the contrary. However, the
consultant may include the average number of holidays provided under formal programs
by all other members of the comparator group as a minimum level of paid time off
provided by the informal program.
Areas of Concern
The value of paid time off may not be excluded from the Value Study calculation
of the Total Net Benefit Value simply because one or more of the comparator group
participants provides such benefits under an informal PTO program. If such informal
programs exist, they must be valued in the spirit of the previously outlined guidelines for
preparation and review.
43

Part III.4. Informal Programs
Other

General Background Information

Like paid time off, other benefits may be provided through informal programs.
While very infrequent, an example is an employer who pays disability benefits at the
discretion of the supervisor. If such benefits are significant, they should be included in
the calculation of the Total Net Benefit Value.

DOE Guidelines for Preparation and Review

In the event an informal benefit program is discovered, it should be referred to
the DOE/headquarters office for review to determine if it is likely to be a significant
benefit. If it is determined to be significant, it should be valued in accordance with the
following philosophy:
- The contractor's value must be substantiated by data from the
contractor.
- The comparator group participants' values shall be assumed to be 0
unless higher utilization can be substantiated by actual data.
See Part III.4.Informal Programs Paid Time Off for an example of how such a
philosophy is applied in a similar context.

Areas of Concern

The value of any significant benefit program may not be excluded from the
Value Study calculation of the Total Net Benefit Value simple because one or more of
the comparator group participants provides such benefits under an informal program. If
such informal programs exist, they must be valued in the spirit of the previously outlined
guidelines for preparation and review.

44

Part III.5. Net Benefit Value
Definition and Acceptable Value
General Background Information
The Net Benefit Value is the value of the benefit as assigned by the Value
Study less any employee contributions. The sum of the Net Benefit Values for each
benefit is defined as the Total Net Benefit Value. The Value Study results should
express the Total Net Benefit Value of the contractor as a percentage of the average
Total Net Benefit Value for the comparator group.
DOE Requirements under DOE O 350.1
DOE O 350.1 Chapter V-Benefits
Paragraph 4.b.(6)(a)
Specify that the contractor pass DOE requirements "When the contractor's
cost or value is within the range of acceptability (i.e. no more than 5 percent
above the comparator for other organizations)..."
The term value for these purposes is interpreted to mean the Total Net Benefit
Value.

DOE Guidelines for Preparation and Review
The Contracting Officer is responsible for determining if the Total Net Benefit
Value falls within the acceptable range of no more than 5% above the average for the
comparator group. Such determination shall take into account whether or not all DOE
guidelines for preparation and review have been followed in the development of the
Total Net Benefit Value.
If the Total Net Benefit Value does not fall into the acceptable range (i.e., it is
more than 5% above the average for the comparator group), the Contracting Officer
will be responsible for monitoring a corrective action plan by the contractor.

Areas of Concern
The DOE is not concerned with the Net Benefit Value of individual benefits
as long as the Total Net Benefit Value for all benefits falls within the acceptable
range.

45

Part III.5. Net Benefit Value
Determination of Total Net Benefit Value

General Background Information

Total Net Benefit Value is the sum of the Net Benefit Value for all employer
sponsored benefits.

DOE Guidelines for Preparation and Review

If it is not clear from the report that each benefit is assigned a dollar value and
that the Total Net Benefit Value is the sum of the Net Benefit Value on a dollar basis of
all benefits, then further investigation should be made to determine if the methodology
utilized to develop the results is reasonable.

46

Part III.5. Net Benefit Value
Determination of Total Net Benefit Value

Illustrations
During the typical Value Study process, each benefit is scaled to its value in
dollars, and is divided into employer-provided and employee-paid components. A
simple example best explains how these components are calculated for one benefit
provided by employer "A".
Facts:
*
*
*

Employer A has a benefit that is worth twice as much (based solely
on design) as the sponsoring employer's benefit
The sponsoring employer's benefit value is $1,000 per employee
Employer A has employees contribute $800 annually

Value Study Calculations:
*
*
*

The employer plus employee value of Employer A's plan is $2,000
(=2 * $1,000) regardless of the actual cost of the benefit
The employee-paid value is $800 based on actual contributions
The employer-provided value is $1,200 (2,000 -$800) regardless
of the actual amount Employer A is paying

The Total Net Benefit Value is then calculated by summing the Net Benefit
Value for all employer sponsored benefits. As a final step in the Value Study, the
contractors Total Net Benefit Value is compared to the average Total Net Benefit
Value for the comparator group.

Areas of Concern
None

47

Part III.6. Report

General Background Information

The Value Study report prepared by the consultant serves as a mechanism to
convey key information regarding the preparation and results of the Value Study.

DOE Guidelines for Preparation and Review

Value Study Methodology Recommendations:
*

A complete copy of the Value Study shall include the methodology
used to define each benefit plan, a description of the benefits plans, a
list of survey respondents, and the actuarial assumptions.

The following additional clarification is provided to further identify information
which should be included in the final report.
*

The report should also include a description of the valuation
methodology in accordance with the guidelines presented in
Part III.3. Valuation Methodology, Part III.4. Informal Programs (if
applicable), and the calculation of Total Net Benefit Value as
presented in Part III.5. Net Benefit Value

*

The report should be accompanied by a contractor certification,
an actuarial certification, and a Key Data Elements Executive
Summary as illustrated in Appendix B, Appendix C and Appendix G,
respectively.

Areas of Concern

It is not possible to ensure that results of the Value Study are valid without
receipt of all elements designated in these guidelines. In addition, it is impossible to
verify that the results of any subsequent Value Study have been calculated consistently
if full documentation of all critical actuarial assumptions and the valuation
methodology is not included in the report.

48

Part IV.1. Field Office Review
Elements to be Reviewed

General Background Information

Because it is impossible to control all of the variables which impact a Value
Study, it is important that a thorough review of the preparation, documentation and
results presented in the report be under taken.

DOE Guidelines for Preparation and Review

Appendix D contains a checklist of all elements which should be reviewed by the
Contracting Officer. If the report is incomplete in any way, the additional information
should be requested. The initial request will be delivered to the contractor, who may
authorize direct contact with the consultant to expedite the request.

Areas of Concern

The DOE's need for thorough documentation may exceed the standard
documentation of the consultant preparing the study. However, it is the DOE'S position
that if the consultant's documentation does not meet DOE guidelines, the cost of the
study will not be considered a reimbursable expense and the results will be considered
invalid. Therefore, it is incumbent upon the consultant to modify their standard
documentation if necessary to DOE guidelines, regardless of whether or not it increases
the cost of the study. There is no reason to believe the DOE requirements will cause
the need for more than a brief supplement, if any, to comply fully.

49

Part IV.2. Field Office Review
Uniform Electronic File Maintenance

General Background Information
Because the benefit Value Study is one of the Department’s performance measurement
tool for determining cost reasonableness and allowability of contractor’s total employee benefit
program, it is necessary to document the benefit Value Study process, i.e., contractor/consultant
preparation and the DOE field office review and approval steps. To support the Contracting
Officer and his/her support DOE Contractor Human Resource (HR) Specialist, Appendix A
thru G of this manual have been designed to document the process. It is also important that the
Value Study files be readily available for DOE management reviews as well as for
audit/review purposes of the Office of the Inspector General and the General Accountability
Office. To support these management actions and comply with the audit/review requirements
for DOE submission of complete, verifiable, and auditable data, the Contracting Officer and/or
the DOE Contractor HR Specialist shall maintain an electronic file of the consultant/contractor
deliverables and the documented field office review steps and checklists in a uniform manner
prescribed below.

DOE Guidelines for Preparation and Review
Contractor Deliverables
Naming the Benefit Value Study report: the electronic file name should be:
.ValueStudy.(insert date of submission to
the Contracting Officer).pdf

Naming Appendix A, B, C, and G (name each appendix individually): the electronic file
name should be:
.ValueStudy.Appendix.(insert date
of submission to the Contracting Officer).pdf
DOE Field Office Review Steps and Checklists

Naming Appendix D, E, and F: the electronic file name should be
.ValueStudy.Appendix.(insert date
of submission to the Contracting Officer).pdf

50

Part IV.3. Field Office Review
Corrective Action Plan

General Background Information

The 2011 General Accountability Office (GAO) review of DOE oversight of the Department
Contractor’s retirement benefits program, Report No. GAO-11-378, Progress Made
Overseeing the Costs of Contractor Post Retirement Benefits, But Additional Actions Could
Help Address Challenges, recommends that DOE improves its process by:
Clarifying existing guidance on correcting contractor benefit packages that exceed
DOE’s standard by:


Establishing a defined timeline by when contractors must submit corrective action
plans to their DOE contracting officer if the value of their benefit package is
determined to exceed DOE’ standard, as well as timeline of when DOE
contracting officers must reach a decision on such plans;



Developing criteria for contracting officers to use when deciding whether to
waive a required corrective action plan;



Requiring review of these contracting officer decisions by the responsible
headquarters office in order to help ensure consistent application of the criteria
across the Department.

DOE concurred with the GAO recommendation.

51

Part IV.3. Field Office Review
Corrective Action Plan

DOE Guidelines for Preparation and Review
1.

When the value of the contractor’s total employee benefits exceeds the DOE
standard i.e., a benefit value (Ben-Val) score of no more than 105 percent, the
CO shall, no later than 14 days after receipt of the Ben-Val report, notify the
contractor to submit a CAP as required by the terms of the contract.

2.

The notification letter shall require the contractor to develop and submit an
acceptable CAP for CO’s review and approval no later than 60 days after the
date of the CO notification letter.

3.

When the contractor fails to submit an acceptable CAP during the 60-day
submission period and CO determines that there is a legitimate reason for the
contractor’s delay, the CO may allow a 30-day extension for the contractor to
submit an acceptable CAP. The CAP extension letter shall include a
reservation of DOE’s right to implement a corrective action by withholding
DOE reimbursement of the appropriate portion of the total employee benefits
cost, if the contractor continuously fails to submit an acceptable CAP.

4.

Should the contractor fail to submit an acceptable CAP by the end of the
extension period, the CO shall issue a final notification to advise the contractor
of DOE’s intent to withhold the reimbursement of the portion of employee
benefits cost attributed to the Ben-Val score net of the DOE standard 105
percent, 30 days from the date of the final notification letter. This net Ben-Val
score represents the level of benefits above what is deemed reasonable under the
terms of the contract, and the cost attributed to this score may be deemed
unallowable when it is determined that there is no reasonable cause for
contractor’s failure to follow the CO’s direction or cure for contractor’s
noncompliance with the terms of the contract. If the CO is unable to determine
the associated unallowable cost from the Ben-Val report and the contractor has
not provided information to identify cost savings opportunities to reduce the
excess Ben-Val score, the CO may consider unallowable costs from a Cost
Study when the result shows that contractor’s cost on a per capita basis and/or
percentage of payroll is over the DOE 105 percent standard.

52

Part IV.3. Field Office Review
Corrective Action Plan
DOE Guidelines for Preparation and Review (Continued)

5.

CAP Exemption/Waiver. DOE policy does not contemplate the approval of CAP
exemption/waiver requests by Department contractors because these actions
preclude the CO’s ability to ensure that DOE pays no more than the cost of a
competitive employee benefits program. However, DOE policy recognizes there
are circumstances when DOE approval of a CAP exemption/waiver may be
warranted. This guidance requires that the CO approval of CAP
exemption/waiver requests, be made only when there is clear and convincing
evidence that the DOE’s interest is protected from the reimbursement of
unreasonable costs. The CO shall obtain approval of a CAP exemption/waiver
from the Head of Contracting Activity, with concurrence from the Senior
Procurement Executive, except under the following circumstances:
a. Deviation is statistically insignificant. When the contractor’s benefit value
exceeds the DOE standard by less than one percentage point, the CO may
consider the difference to be “statistically insignificant” and approve the
contractor’s request for a CAP exemption/waiver. It is important to
remember that a Ben-Val score of 105 percent does not represent an average
value of benefits. The average is 100 percent. A Ben-Val score of 105
percent means that the contractor’s value of benefits is 5 percent greater than
the average value of the total benefits of the contractor’s comparator group in
the same competitive market.
b. Costs are deemed allowable under FAR. Pursuant to FAR 31.3, Contracts
with Educational Institutions, the allowability of cost to government
contracts with educational institutions are subject to the cost principles of the
Office of Management Budget (OMB) Circular A-21. Pursuant to Circular
A-21, the cost of the university’s corporate employee benefit programs is
reasonable and allowable if DOE’s costs conform to the established policies
of the institutions consistently applied. In lieu of a CAP on a corporate
benefits program, the CO shall ensure that periodic audit of indirect cost
including the cost of employee benefits be conducted to ensure that the
contractor’ methodology for developing and allocating the corporate
employee benefits cost to the DOE contract is consistent with costs charged to
non-DOE components.

53

Part IV.3. Field Office Review
Corrective Action Plan
DOE Guidelines for Preparation and Review (Continued)
c. Total Net Benefit Value within 105 percent. When the Total Net Benefit
V alue for incumbent and non-incumbent employees is no more than 105
percent, and the CO determines that the Total Net Benefit Value was
properly determined based on the weighted average value of the incumbent
and the non-incumbent employees, the CO may allow the contractor’s
request for a CAP exemption/waiver.
d. Cost Study is within 105 percent. When the contractor submitted Cost
Study reveals that benefits provided to contractor employees do not exceed
the DOE standard of 105 percent.
e. Integrated Cost Study and Benefit Value Study Analysis. When the
documented results of an integrated Cost Study and Value Study analysis
reveals that the higher benefit value score has not resulted in the
reimbursement of costs that are not reasonable when compared to
comparable organizations in the market, the CO may approve the
contractor’s request for a CAP exemption/waiver.
f. Total Compensation Study. When the documented results of a total
compensation study reveals that the higher benefit value score has not
resulted in the reimbursement of total compensation, including salaries that
are not reasonable when compared to comparable organizations in the
market, the CO may approve the contractor’s request for a CAP
exemption/waiver.

54

Part V.1. Supplemental
Information Forms

Appendices

55

Appendix A - Value Study Comparator Request for Approval Form
Contractor Name:
Subset of employees included, if applicable (e.g., incumbent, new hires, etc.)

First Time Study:


Yes 
No

YYYY Ben-Val (Prior)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Change in number from

Comparator Group
YYYY Ben-Val (Current)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
to

.

For each “dropped” comparator company, state reason why dropped

For each “added” comparator, state reason why added

56

Appendix A - Value Study Comparator Request for Approval Form (cont’d)
Place check mark () in space, as applicable
Comparator Group Selection meets DOE guidelines
15 or more participants compete for exempt level professional staff
(non-executives)
No more than 20 percent of participants (excluding contractor) are DOE
contractors
All participants represent contractor’s competitive market
Compete for exempt level professional staff (non-executives) in
same industry, or
Proof that contractor has gained or lost more than four exempt level
professional staff (non-executives) to the comparator firm during the
prior years who have the same skills set as professional staff of the
comparator firm.
Information disclosed above is certified to be correct to the best of my knowledge and ability and is
submitted for approval this < > day of , by:

Signature and Title
(Must be an officer or otherwise specifically authorized to sign on behalf of your company)

Print Name and Title

DOE Use Only:

Comparator list of companies is approved by:

Contracting Officer

Date

57

Appendix B - Contractor Certification
Contractor Name:
Subset of employees included, if applicable (e.g. incumbent, new hires, etc.)

First Time Study:


Yes


No

Attached is a Value Study completed in compliance with DOE O 350.1. I hereby certify that the
following statements are true to the best of my knowledge:


A list of the Value Study comparators was submitted and approved by the DOE
Contracting Officer on prior to the performance of the study.



All study comparators compete for exempt level
professional staff (non-executives) in the same industry as .
As an alternative, a study comparator has been included with proof that we have gained or
lost more than 4 exempt level professional staff (non-executives) within the last 5 years
from/to such comparator who have same skills sets as professional staff of .



No more than 20 percent of the study comparator (excluding )
are DOE Contractors. The following are DOE contractors: .



All known major non-statutory benefit plans of and the study
comparators have been valued, including qualified defined benefit, defined contribution
retirement and capital accumulation plans, death, disability, health and paid time-off welfare
benefit programs. All plans were valued based on current plan provisions applicable to
exempt professional level staff (non-executives). Post-retirement benefits (other than
pensions) included in the study.



Comparator group
Consulting firm performing study
Plans Valued
Valuation methodology/assumptions



First
Time
Study





Prior
Report
Not
No
Available Change Change occurred and why













No request of any kind has been made of
to modify the approved study comparators, data provided by study comparators, their
standard valuation methodology or the valuation assumptions in any manner which is not
required to conform with the principles set forth in DOE O 350.1, and which jeopardizes

58

their professional independence or is intended to significantly impact a determination of
compliance with the measures provided in DOE O 350.1.


The complete Value Study report, along with all Appendices and or supplemental material
prepared by < Insert name of National Consulting Group > has been sent to DOE for
review. No pages, topics, formatting, summary or variation have been deleted or edited
prior to providing material to DOE for review.



Informal programs were referred to the Contracting Officer for review. If a benefit was
determined to be significant, it was valued based on data substantiated by and the comparator group participants’ shall be valued at 0 unless
higher utilization can be substantiated by actual data. If a benefit was determined not to
be significant, it has not been included in the Value Study



Accompanying this certification are the completed:
 Value Study Report
 Executed Consultant Certification
 Executed Value Study Comparator Request for Approval Form, and
 Key Data Elements Executive Summary



If DOE has any questions regarding any of the information included or reviewed the
following person should be contacted
Name:
Email:
Address:
Phone:

Certified this <

> day of , by:

Signature and Title
(Must be an officer or otherwise specifically authorized to sign on behalf of your company)

Print Name and Title

59

Appendix C - Actuarial Consultant Certification
Contractor Name:
Subset of employees included, if applicable (e.g., incumbent, new hires, etc.)

First Time Study:


Yes


No

has performed a Value Study for in accordance with our understanding of DOE O 350.1. Such study was performed for the
benefits in effect for the evaluation year beginning . I hereby certify the
following statements are true to the best on my knowledge:


We are a national consulting with evaluation more than offices nationwide and
in excess of $5,000,000 revenue annually. We have the actuarial and employee benefit expertise
necessary to perform the study as required.



provided an approved list of at least 15 comparator companies
(excluding ) to represent the comparator group.



DOE approval of comparator group has been provided.



We have exercised prudent measures to validate comparator data as accurate, reflecting the value
of employee benefit plans offered by the comparators as of the January 1 coincident with or
immediately preceding (if the evaluation year is other than a calendar year) the first day of
evaluation year. To the extent employees of < Insert Contractor
Name> as of January 1 may be entitled to grandfathered benefits based on date of hire (or other
variable), our calculations are based on the weighted average enrollment in each of the plans as of
this date, however, pension plans closed to new entrants have not been included and all retirement
income benefits for new hires have been substituted for the retirement income benefits of the
grandfathered employees.



All calculations impacting employee demographic data and or assumptions used to prepare the
Value Study were based on:
A single subset of employees
Exempt level professional staff (non-executives)
actual demographics
Assumed general demographics



All calculations impacting employee demographic data and or assumptions used to prepare the
Value Study were based on:
Same demographic profile model as was used Value Study immediately preceding
this one
Different demographic profile than prior Value Study and provided documentation of prior approval from DOE contracting officer; and this
documentation is attached
Do not know the answer

60

Appendix C - Actuarial Consultant Certification (cont’d)


The benefits values are those available to exempt level professional staff (non-executives) of the
study participants in the same industry.



The valuation assumptions and methodology utilized produce a reasonable projection of the value
provided by the participant’s benefit plans.



The method of valuing retirement benefits provided under a defined benefit pension or other postretirement benefit cost is representative of an amount ratably accrued over an employees’ entire
career.



Benefits valued include all known qualified defined benefit (except defined benefit plans closed to
new entrants), defined contribution retirement and capital accumulation plans, death, disability,
health and paid time off welfare benefit programs. The anticipated Net Benefit Value of any
benefit not valued in our study is estimated to be less than one percent of the Total Net Benefit
Value actually reported.



The Value Study submitted includes a description of the valuation methodology utilized in the
study.



The definition of Net Benefit Value for purposes of the Value Study is the value of the benefit
as assigned by the Value Study less any employee or retiree contributions.



The total net benefit value for was calculated as (or is equivalent to)
the sum of the net benefit values for each benefit provided by the contractor, divided by the
arithmetic mean (average) of the sum of the net benefit values for each benefit provided for all
other participants.

61

Appendix C - Actuarial Consultant Certification (cont’d)


No significant benefit data was missing for . For other participants,
no significant benefit data was missing or if it was, we have disclosed in our report what
assumption we used to complete the data and rationale for doing so.





Comparator group
Plans Valued
Valuation methodology/assumptions



First
Time
Study




Prior
Report
Not
Available




No
Change Change occurred and why







We have not been requested to modify, nor have we modified in any way, the approved study
participants, data provided by the participants, our standard valuation methodology or valuation
assumptions in any manner which does not conform with the principles set forth in DOE O 350.1,
and which jeopardizes our professional independence or is intended to significantly impact a
determination of compliance with the measures provided in DOE O 350.1.

Certified this <

> day of , by:

Signature and Title (Must be an officer or otherwise specifically authorized to sign on behalf of your
company)

Print Name and Title
List all applicable actuarial designations or other professional designations, if any, of signatory:

62

Appendix D – Value Study Checklist Field Office Review
Contractor Name:
Subset of employees included, if applicable (e.g., incumbent, new hires, etc.)
First Time Study: 
Yes 
No
Ben-Val Evaluation Period Begin Date:
Initial and date each item reviewed.
Attach a statement describing any variance from DOE guidelines.
Appendix A: Value Study Comparator Request for Approval Form attached
Appendix B: Contractor Certification received and reviewed for consistency
with sample language
Note Discrepancies:

Appendix C: Actuarial Certification received and reviewed for consistency
with sample language
Note Discrepancies:

Ben-Val Key Data Elements received and reviewed
Complete Ben-Val report (including all appendices and sub-indices) submitted
Report meets DOE guidelines
 Includes definition of each benefit plan
 Includes description of each benefit plan
 Includes description of valuation methodology
 Includes description of actuarial assumptions
 Appropriately deals with informal programs (if applicable)
Ben-Val Results:
 Acceptable – Employer Total Relative Benefit Value not more than 5%
above participant group average
 Unacceptable: Corrective Action Required – Employer Total Relative
Benefit Value more than 5% above participant group average
 Unacceptable: Corrective Action Not Required – Employer Total Relative
Benefit Value more than 5% above participant group average
Justification (attach copy of regulation or DOE management approval
as applicable):
.

63

Additional pages for Appendix D, Ben-Val Results
Ben-Val Results: For (name or subset of employees)
 Acceptable – Employer Total Relative Benefit Value not more than 5%
above participant group average
 Unacceptable: Corrective Action Required – Employer Total Relative
Benefit Value more than 5% above participant group average
 Unacceptable: Corrective Action Not Required – Employer Total Relative
Benefit Value more than 5% above participant group average
Justification (attach copy of regulation or DOE management approval
as applicable):
.

Ben-Val Results For (name or subset of employees)
 Acceptable – Employer Total Relative Benefit Value not more than 5%
above participant group average
 Unacceptable: Corrective Action Required – Employer Total Relative
Benefit Value more than 5% above participant group average
 Unacceptable: Corrective Action Not Required – Employer Total Relative
Benefit Value more than 5% above participant group average
Justification (attach copy of regulation or DOE management approval
as applicable):
.

Ben-Val Results:
 Acceptable – Employer Total Relative Benefit Value not more than 5%
above participant group average
 Unacceptable: Corrective Action Required – Employer Total Relative
Benefit Value more than 5% above participant group average
 Unacceptable: Corrective Action Not Required – Employer Total Relative
Benefit Value more than 5% above participant group average
Justification (attach copy of regulation or DOE management approval
as applicable):
.

64

Appendix D – Value Study Checklist Field Office Review (cont’d)
Electronic copy of results sent to DOE Headquarters

Reviewed by:

Contractor HR Specialist

Date

Concurred with:

Contractor HR Team Leader

Date

Approved by:

Contracting Officer

cc:

Date

Office of Contractor Human Resources
Policy Division, MA-612

65

Appendix E – Corrective Action Plan Determination Checklist Field Office Review
Initial and date each item reviewed.
Contractor Name:
Subset of employees included, if applicable (e.g., incumbent, new hires, etc.)

Ben-Val Results
 Unacceptable: Corrective Action Required (Complete Appendix E)
Name or subset of employees, if applicable
 Unacceptable: Corrective Action Not Required (See Appendix D)
Name the subset of employees, if applicable

.

Required contractor to develop a corrective action plan by
Corrective action plan approved on

.
.

Corrective Action Plan Implementation Schedule:
The Total Net Benefit Value of
% will be reduced to no more than 5%
of the participant group average over the following period.
% on
% on
Provide new target date(s) and explanation for any changes in schedule.

Electronic copy of the CAP sent to HQ.
Electronic copy of the changes to CAP sent to HQ.
Reviewed by:
Contractor HR Specialist

Date

Concurred with:
Contractor HR Team Leader

Date

Approved by:
Contracting Officer

Date
66

Appendix F – Corrective Action Plan Implementation Checklist Field Office Review
Contractor Name:
Subset of employees included, if applicable (e.g., incumbent, new hires, etc.)

Ben-Val Results
 Unacceptable: Corrective Action Required (Complete Appendix E)
Name or subset of employees, if applicable
 Unacceptable: Corrective Action Not Required (See Appendix D)
Name the subset of employees, if applicable
Initial and date each item reviewed.

Year 1 CAP implemented as scheduled. Attach supporting documentation.
Provide explanation and new target(s) for any changes in the schedule

Year 2 CAP implemented as schedule. Attach supporting documentation.
Provide explanation and new target(s) for any changes in the schedule.

Supporting Documentation sent to DOE HQ.
Reviewed by:

Contractor HR Specialist

Date

Concurred with:

Contractor HR Team Leader

Date

Approved by:

Contracting Officer

Date

cc: Office of Contractor Human
Resources Policy Division, MA-612

67

.

Appendix G: Value Study Executive Summary
Section I
A.

Comparators

Provide the requested comparator lists below.

Approved Participants (Appendix A)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
B,

Participants In Attached Value Study
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

Indicate below if there was a change in number of comparator companies included in the last
Value Study submitted to DOE for review versus the current Value Study submitted for
review.
Change in number from

to

.

C.

For each “dropped” comparator company, state the reason why it was dropped
1.
2.
3.
4.
5.

D.

For each “added” comparator, state the reason why it was added
1.
2.
3.
4.
5.

E.

DOE executed Value Study Participant Approval Form attached

68



Appendix G: Value Study Executive Summary (cont’d)
Section II

Employer Total Net Benefit Value

Enter Net Benefit Values (the value of the benefit less any employee or retiree contributions) for each
benefit category.
If there are different level of benefits for different groups or subset of employees (e.g., a prior level of
benefits provided to incumbent employees based on date of hire) show the values of the benefits
separately for each group or subset of employees.
NET BENEFIT VALUE – (Name or subset of employees)
Prior Value Study Results
Date:
Weight (%)
Index/value

Retirement
Non-Matching
Matching
Active Health Care
Active Welfare
Death
Disability
Post-Retirement H&W
Paid Time Off
Total Net Benefit Value

100%

Value Study Results
Date:
Weight (%)
Index/value

100%

NET BENEFIT VALUE – (Name or subset of employees)
Prior Value Study Results
Date:
Weight
Index/value

Retirement
Non-Matching
Matching
Active Health Care
Active Welfare
Death
Disability
Post-Retirement H&W
Paid Time Off
Total Net Benefit Value

100%

Value Study Results
Date:
Weight
Index/value

100%

69

Additional pages for Appendix G, Net Benefit Value
NET BENEFIT VALUE – (Name or subset of employees)
Prior Value Study Results
Date:
Weight (%)
Index/value

Retirement
Non-Matching
Matching
Active Health Care
Active Welfare
Death
Disability
Post-Retirement H&W
Paid Time Off
Total Net Benefit Value

100%

Value Study Results
Date:
Weight (%)
Index/value

100%

NET BENEFIT VALUE – (Name or subset of employees)
Prior Value Study Results
Date:
Weight
Index/value

Retirement
Non-Matching
Matching
Active Health Care
Active Welfare
Death
Disability
Post-Retirement H&W
Paid Time Off
Total Net Benefit Value

100%

Value Study Results
Date:
Weight
Index/value

100%

70

Appendix G: Value Study Executive Summary (cont’d)
Section III

Sub-Indices/Values

Complete the chart below for both the prior and current value study.
Prior Value Study
Current Value Study
All Retirement
Active Health Care
All Active Welfare
Post-Retirement H&W
Paid Time Off
Affirm that sub-indices and their definitions are attached





Section IV

Weighting Methodologies

All Benefits - Employer
Non-Incumbent Employees
Incumbent Employees
Total

Prior Value Study

Current Value Study

100%

100%

Explain the methodology for determining the weighting outlined above.

Section V

Weighted Average Value

All Benefits - Employer
Weighted Average Value

Prior Value Study

Current Value Study

Explain the methodology for determining the weighted average values outlined above.

71

Section VI

Adherence to DOE Policy and Guidelines

Affirm each statement if true.
A.

State that you are familiar with the policy describing Value Study requirements set
forth in DOE Policy and Guidelines.


B.

The valuation results were performed to conform to the policy set
forth in DOE Policy and Guidelines.


C.

The prior Value Study report was made available to us by the DOE Contractor and
reviewed as part of completing the current Value Study

First
Time Study


D.

An explanation for any change in methodology, assumptions, and
plans valued, etc. between prior Value Study and current Value Study
is attached.

First Time Study











Section VII

Valuation Details

The following valuation details are found on the designated pages of this study.
Demographic group/data
Definition of each benefit plan
Detailed description of each benefit plan
Description of valuation methodology
Description of actuarial assumptions
Statement regarding informal programs
Definition of sub-indices set forth above

Page #
Page #
Page #
Page #
Page #
Page #
Page #

Submitted by:

(Name of Actuary/Consultant)

(Date)

(Name of Actuarial/Consultant Firm)

72