HomeMy WebLinkAbout[04f] VEBA PlanCM OF ST. JONKM
MEETING DATE:
AGENDA ITEM:
Council Agenda Item "'
December 3, 2009
VEBA Plan — Requested Action: Authorize the
Administrator to execute an Agreement with the Minnesota Service Cooperation for post retirement
health care savings.
SUBMITTED BY:
Administration
BOARD /COMMISSION /COMMITTEE RECOMMENDATION:
PREVIOUS COUNCIL ACTION: Annually the City reviews the Cooperative Service Agreement providing
for Post Retirement Health Savings.
BACKGROUND INFORMATION: To help offset the cost of retirement /severance payments, the provided
a Post Retirement Health Savings Plan called a VEBA. When an employee leaves any unused sick leave
that is payable to the employee is placed in the VEBA. Utilizing a VEBA saves the City from paying
payroll taxes and work comp on the gross amount as it is a tax sheltered benefit. The Union contracts
require all sick leave payments to be paid to the VEBA account. The plan established by the City is
without cost as the employee is required to pay the maintenance fee. Once the City deposits the funds
with the Minnesota Services Cooperative the City does not have any administrative requirements or fees
other than to annually review and adopt the agreement. As stated above this account is required
through both Union contracts.
BUDGET /FISCAL IMPACT:
ATTACHMENTS: Cooperative Services Agreement
REQUESTED COUNCIL ACTION: Authorize the Administrator to execute the Cooperative Agreement
between the City of St. Joseph and Minnesota Services Cooperative.
the
Service Cooperatives
ADOPTION AGREEMENT
For the
MINNESOTA SERVICE COOPERATIVES VEBA PLAN
THIS AGREEMENT, made and entered into by City of St. Joseph ( "Employer ") hereby adopts
and where appropriate ratifies the following arrangements effective January 1, 2009 ( "Effective
Date ") which have been established or entered into by Resource Training & Solutions (the
"Service Cooperative "):
1) The Minnesota Service Cooperatives VEBA Plan, which together with the
Employee Benefits Trust Agreement is intended to qualify as a voluntary
employees' beneficiary association under Section 501(c)(9) of the Code;
2) The Employee Benefits Trust Agreement (the "Trust "), with MG Trust appointed
as Trustee;
3) The High Deductible Health Plan;
4) The Joint Powers Agreement.
SECTION 1. PLAN INFORMATION
A. Employer hereby adopts the Minnesota Service Cooperatives VEBA Plan with the
following features (select one or more):
(1) ® Postretirement Health Care Savings Arrangement (amounts
payable after employee's retirement from public employment)
(a) ❑ Accounts funded with accrued severance pay, vacation pay,
sick pay or similar amounts following termination of employment
And/or
(b) ❑ Accounts funded over employee's working life for use in
retirement
(2) ❑ Health Reimbursement Arrangement for Active Employees (must
also select High Deductible Health Plan below)
B. If A(2) is selected, Employer hereby adopts the High Deductible Health Plan with
the following features:
VEBA Plan:
VFR A 11ka D7 AMC
Deductible
Calendar Year Plan Number
Plan Year Plan Number
$1200 single ded/ $2400 family ded
830
834
$1 850 single ded/ $3700 family ded
831
Lj 835
$2250 single ded/ $4500 family ded
832
❑ 836
$2600 single ded/ $5200 family ded
833
837
17 D A 41k Di A ATC
Deductible
Calendar Year Plan Number
Plan Year Plan Number
$1850 single ded/ $3700 family ded
821
824
$2250 single ded/ $4500 family ded
822
Lj 825
$2600 single ded/ $5200 family ded
823
Lj 826
VTiDA 7AD7 AIVQ
Deductible
Calendar Year Plan Number
Plan Year Plan Number
$600 single ded/ $1200 family ded
840
1 1827
$1200 single ded/ $2400 family ded
820
828
C. The Plan Year shall be from January 1 to December 31.
Deductible amounts and out -of- pocket maximums may increase annually to keep pace with
inflation.
SECTION 2. EMPLOYER INFORMATION.
A. Official or legal name and address of Employer, including district number (where
relevant):
City of St. Joseph
25 College Ave N
St. Joseph, MN 56374
B. Contact name, phone number, fax and email address of contact person at City of
St. Joseph:
Judy Weyrens
Phone: 320 363 7201
Fax: 320 363 0342
jweyrens@cityofstjoseph.com
Employer will promptly notify SelectAccount of any changes in the above Information.
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SECTION 3. CONTRIBUTIONS
A. Please complete the Minnesota Service Cooperatives VEBA Program Enrollment
Form (Form F7543) containing the following information:
Name, address, date of birth and Social Security number of participants who will
receive contributions to individual accounts in the VEBA.
B. Please attach copy of relevant collective bargaining language or personnel policy
authorizing use of VEBA and setting forth employer contributions.
C. Contributions will be submitted to SelectAccount via:
❑ Automated Clearing House (ACH) funding & electronic contribution
information (recommended)
1) When submitting contributions, please follow the instructions and file
format sent with your welcome packet or consult with your sales
representative for details.
2) ACH Required Information
I hereby authorize SelectAccount to charge our bank account through
Automated Clearing House for contributions.
Bank Name:
Type of Account: ❑ Checking ❑ Savings
Bank Location / Branch:
Bank ABA Number: On File
Bank Routing Number: On File
Note that account funding must be initiated by you through the
standard electronic file format before each ACH transaction can
occur.
® Check & manual contribution information
3) When submitting contributions, please complete the Minnesota
Service Cooperatives VEBA Program Contribution Form (Form
F7542) detailing the name, Social Security number, and amount of
contribution. This form must accompany each contribution payment.
4) Please make contribution checks payable to:
MG Trust as Trustee for the Minnesota Service Cooperatives
Employee Benefits Trust
Please mail or deliver contribution checks and completed
contribution forms to:
SelectAccount
Attn: Minnesota Service Cooperatives VEBA Administration
P0 Box 64193
St Paul, Minnesota 55164 -0193
The timeliness, adequacy and accuracy of contributions shall be the sole responsibility of
Employer.
SECTION 4. INVESTMENTS
By execution of this Adoption Agreement, Employer hereby directs Trustee to provide the
following investment accounts or funds under the Plan for Plan participants (or, if applicable,
spouses or beneficiaries):
Base Account (Default Account)
• SelectAccount interest bearing investment account
Investment Accounts (Optional & subject to change)
• See http: // www.bluecrossmn.com /mnservcoop/ for investment choices and
information
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SECTION 5. FEES.
a
Administration fees will be paid as follows:
Payable from
individual accounts
Status:
(1)
Active employees
❑
(2)
Former employees
Former employees
(3)
Retired employees
(3)
Retired employees
(4)
Upon termination of
(4)
Upon termination of
participation in the
participation in the
VEBA or cessation of
VEBA or cessation
employer contributions
of employer contributions
Payable by
the Employer
.1
■
■
■
Employer agrees to pay all fees for administration of the VEBA in the event of failure or
inability to pay fees from individual accounts (for example, if accounts are depleted
before fees are assessed).
Select Account will charge a claims administration fee equal to:
❑ $0.00 per individual account per month for administration of the VEBA Thrift
Saver, with FSA accounts administered at no additional charge.
❑ $1.00 per individual account per month for administration of the VEBA Basic
Saver, with FSA accounts administered at no additional charge.
® $1.83 per individual account per month for administration of the VEBA Premium
Saver, with FSA accounts administered at no additional charge.
❑ This fee will be billed on a monthly basis as specified above.
Investment account fees will be paid as follows:
Payable from
individual accounts
Status:
(1)
Active employees
(2)
Former employees
(3)
Retired employees
(4)
Upon termination of
participation in the
VEBA or cessation
of employer contributions
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Payable by
the Employer
Employer agrees to pay all fees for administration of the VEBA in the event of failure or
inability to pay fees from individual accounts (for example, if accounts are depleted
before fees are assessed).
SelectAccount will charge an investment account administration fee equal to:
$1.50 per individual account with optional investment accounts per month. This
is an all inclusive charge for all investment account sales, purchases, and ongoing
reporting. No sales load will be charged on investment alternatives. Mutual funds
made available for adoption by Employer as investment alternatives may charge
certain management, administration, marketing and similar fees depending on the
funds selected (the "expense ratio "). The expense ratio on the funds selected as of
November 1, 2007, range from .51 to 1.28 basis points, and will be applied
against an employee's investment in said funds. For reference purposes, 100
basis points is equal to I% of the amount invested. The expense ratios are subject
to change as funds are added, replaced or modified.
• This fee will be billed on a monthly basis as specified above.
C. High deductible Health Plan account fees
Fees payable to the Service Cooperative and Blue Cross Blue Shield Minnesota for
administration of the High Deductible Health Plan selected under Section 1(B) hereof shall be
determined pursuant to the Joint Powers Agreement and Operating Agreement and assessed to
the Employer in addition to the fees set forth above.
D. Renewal account fees
Fees payable to SelectAccount are guaranteed until November 1, 2010.
SECTION 6. COORDINATION WITH CAFETERIA PLAN.
The following option is available for Employers that sponsor a health flexible spending account
(Health FSA) through a cafeteria plan administered by SelectAccount:
❑ Cafeteria plan pays first. (Recommended) Eligible health expenses will be
reimbursed from the cafeteria plan Health FSA until a participant's account is exhausted.
Only then will eligible health expenses be reimbursed from the participant's VEBA
account for Active Employees.
❑ Cafeteria plan pays second. Eligible health expenses will be reimbursed from the
VEBA account for Active Employee's until a participant's account is exhausted. Only
then will eligible health expenses be reimbursed from the participant's cafeteria plan
Health FSA.
This election shall be deemed to be automatically renewed from year to year until the Employer
amends the Adoption Agreement.
C
SECTION 7. JOINT POWERS AGREEMENT
The VEBA and related welfare benefit plans and service agreements have been made available
for adoption by Service Cooperative in accordance with the powers granted it under the Joint
Powers Agreement, as permitted under Minn. Stat. Sec. 471.59, Subds. 1 and 10. Except as
expressly provided herein, the rights, duties and responsibilities of Employer and Service
Cooperative, and their respective board members, employees and designees, shall be governed
by the Joint Powers Agreement.
The Service Cooperative recommends that Employer consult with its own legal or tax advisor
before executing this Adoption Agreement.
City of St. Joseph
Signed:
Name:
Title:
Date:
SelectAccount
Accepted:
Reed Erickson
Title: Director of Medical Banking and Compliance
Date:
SelectAccount Internal Sales & Agency Information
Accepted by:
Sales Representative:
Agent (if applicable):
Agency (if applicable):
Marketing ID Number/MID (if applicable):
Date:
Rep Code: _
_ Agent Number:
Agency Number:
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