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The Central Valley Retiree Medical Trust ( CVRMT )

Post on 26-Aug-2018




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  • The

    Central Valley

    Retiree Medical Trust

    ( CVRMT )

  • Introduction

    The Central Valley Retiree Medical

    Trust was originally established by the

    Deputy Sheriffs Association of

    Stanislaus County in 2002.

    The Trust is administered by a Board

    of Trustees, which is made up of

    emergency services personnel.

  • PUBLIC SECTOR CONCERN One concern for many

    public sector employees who retire in their early to mid

    50s is how to pay for medical coverage from retirement

    until Medicare (age 65).


    to help pre-fund for retiree medical expenses during your

    active employment years.

    Retiree Medical Trust

  • What is the Benefit under the Plan?

    Benefits under the Plan come

    in the form of reimbursement

    towards the cost of your health

    insurance premiums and/or

    expenses after retirement.

  • Funded by employer and/or employee contributions.

    Each bargaining unit (as a whole) may select their own monthly contribution level

    Mandatory participation. i.e., all employees in a bargaining unit must participate.

    Lifetime stream of benefits

    Tax-free survivor benefits for spouses and dependents.

    Assets are invested and managed by a professional investment manager

    Regulated by federal law


  • Tax exempt status as a VEBA under Internal Revenue Code Section 501(c)(9).

    Allows tax-free reimbursement for qualified health premiums and medical expenses.

    Insurance premiums (medical, dental, vision)



    Miscellaneous medical costs (deductibles, co-pays, eyeglasses, contacts, etc.)


  • You will get reimbursed for the following:

    Health Insurance Premiums (e.g., medical, dental, vision)

    Medical/hospital expenses

    Dental or vision care

    Prescription drugs

    Long Term Care premiums


    Medical Trust

    Medical/Hospital Expenses

    Dental/Vision Care

    Health Ins. Premiums

    Prescription Drugs

    Medical Trust

    Medical Trust

    Medical/Hospital Expenses

    Dental/Vision Care

    Health Ins. Premiums

    Prescription Drugs

  • Retiree Medical Trusts can offer the following tax advantages:

    Tax Advantages

    Employer employers are not required to pay payroll taxes on the contributions, provided that the entire bargaining unit participates.

    Employee contributions are pre-tax. In addition, investment earnings on contributions are tax-exempt.

    Retiree the reimbursement benefits received from the Trust are tax free to the retiree, unlike pension benefits which are taxable.

  • Retiree Medical Trusts offer a valuable benefit for employee

    groups who are willing to negotiate a small portion of their

    salary to save for post-retirement medical expenses.

    Contributions must be mandatory at the same rate for

    everyone in the bargaining unit. No opt-outs and no option to

    contribute extra or less.

    Contributions are made during active employment at a rate

    that the Association and City agree upon at the bargaining

    table, Ex., Employees will contribute $50/mo to the Trust.


  • Accumulated sick and/or vacation leave time may be

    transferred (pre-tax) to the Trust.

    A Participant may choose to:

    Use the leave transfer to purchase more active service units (at

    actuarial cost) or

    credit the leave transfer to his or her individual account in the Trust

    Leave transfers must be made mandatory pursuant to an

    MOU or side letter at the same percentage of accrued leave

    for all members

    Leave Transfer

  • POOLED ACCOUNT Contributions are held in a pooled account in

    trust. These contributions are intended to fund a lifetime stream of

    benefit payments for participants. The amount of your benefit

    payment will depend on the length of your participation in the Plan

    and the amount of contributions that you have made.

    INDIVIDUAL ACCOUNT The Trust maintains an individual

    bookkeeping account in the Trust for each Participant to which sick

    and vacation leave transfers are credited. There is no monthly limit on

    your individual account. You will be reimbursed for qualified expenses

    from your Individual Account until your balance reaches zero.

    Plan Design

  • After becoming eligible, a Participants lifetime

    monthly benefit level will be calculated as follows:

    Career Employee 25 years in Trust: An Association

    selects a contribution rate of $100/month, and Employee

    Jones participates for seven years (or 84 months) at that

    level. Then the Association increases the contribution

    rate to $200/month, and Jones participates for 18 years

    (or 216 months) at that level, and then retires.

    Example: Lifetime Benefit Level

  • Step 1: Convert monthly contributions to Active Service Units.

    $100/month = 2 Active Service Units/ Month

    $200/month = 4 Active Service Units/ Month

    Step 2: Add Up the Active Service Units.

    2 Active Service Units x 84 months = 168 Active Service Units

    4 Active Service Units x 216 months = 864 Active Service Units

    Total = 1032 Active Service Units

    Step 3: Multiply number Active Service Units by Unit Multiplier.

    Monthly Benefit Amount: 1032 x $0.50* = $516.00

    *UM as of 9/1/15 for illustration purposes ($50 per Active Service Unit)

    Example: Lifetime Benefit Level

  • Tax-free earnings and compound interest allow

    significant appreciation on contributions. The benefit

    amount will vary depending on length of contributions

    made on behalf of the employee, investment income,

    and administrative expenses.

    There is no monthly limit on the benefit from your

    Individual Account. You may be reimbursed for qualified

    medical expenses until your balance reaches zero.

    Individual Account

  • A Participant must meet all of the following requirements to

    become eligible for the pooled account benefit.

    Participated in the Plan for 10 years. However, this requirement is 5 years for an individual who is an Employee when his/her bargaining

    unit joins the Trust.

    Made contributions to the pooled account for all years of participation in the Plan.

    Attained age 50 if sworn-public safety or age 55 for other Employees. Ceased employment with a participating employer.

    Lifetime Benefit Eligibility

  • CVRMT Trustees

    Matt Pettus, Stanislaus DSA

    Bryan Roof, Modesto Fire

    Gregg Clifton, Stanislaus SMA

    Gerard Hilgart, Stanislaus DA Inv.

    Matthew Ponce, Modesto POA

    Derek Nichols, Stanislaus Cons Fire

    Plan Administrator

    Trust Office

    Delta Fund Administrators

    Legal Counsel

    Linda Stuessi

    Saichek Law Firm APC

    Investment Manager

    Gerard Tamparong

    Payden & Rygel

    The Players

  • 17

    A distinguished and dedicated career encompassing

    Employee benefit plans

    Extensive research and analysis

    Lobbying and speaking on behalf of trust funds

    28 years as counsel to employee plan trustees


    State Bar of California (1992), US District Court, SD CA (1993), US Court of

    Appeal, 9th Circuit (1994)

    Saichek Law Firm, APC

    Represents over 25 retiree medical trusts

    A team of five attorneys with over 90 years of combined

    experience in employee benefits and labor law

    Shana Saichek and the Saichek Law Firm

  • Over 40 years experience as a national provider of administrative solutions

    Accepts and processes employer contributions

    Tracks all account balances, both pooled and individual

    Daily claims processing

    Account information changes

    Semi-annual participant account activity statements

    Maintains all trust documents

    HIPPA, COBRA, DOL and ERISA compliant

    In-house Finance Department

    Administers trusts/plans which encompass over 70,000 public employees

    Based in Stockton, California

    Delta Fund Administrators

  • Payden & Rygel, headquartered in Los Angeles since 1983, is among

    the largest independent investment managers in the United States,

    with $90 billion in assets under management.

    For the past 25 years, Payden & Rygel has advised public funds,

    pension plans, corporations, foundations, endowments and

    individual investors on their overall investment strategies.

    The firm has developed a special reputation as one of the worlds

    most prominent global bond managers.

    Payden & Rygel

  • Contact your membership and explain the benefits of an RMT.

    Get a approval from your membership to join.

    Sign a joinder agreement.

    Modify your MOU or side letter (request model language from Trust Administrator)

    Acknowledges the Trust

    Agrees to make contributions on Employees behalf

    Pick a contribution level.

    Pay joinder fee ($25 per member/deductible from first contribution; min. $1000; max. $5000 (

  • Administrator

    Delta Fund Administrators

    (800) 700-6762

    [email protected]


    Board of Trustees

    Matt Pettus, Chairman

    (209) 247-7132

    [email protected]

    Bryan Roof, Trustee

    (209) 988-8729

    [email protected]

    For More Information Contact:

  • Thank You!