The Department of Energy has announced it will abandon its attempt to lower medical and pension costs it pays its management and operations contractors. Under a plan announced in April 2006, the department would continue to reimburse medical benefit and pension costs for current and retired employees under existing provisions but would have required market-based medical and pension plans for new employees. Following considerable opposition, it put the plan on a 12 month hold to seek other ways to lower these costs. The department’s announcement stated it will leave in place its long standing policy of reimbursing M&O contractors for their allowable health benefit and pension costs of current employees and retirees.

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