01/28/2016

VEBA: PPA BENEFIT TRUST

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What is the VEBA?

A voluntary employees beneficiary association plan (VEBA) is a tax-free post-retirement medical expense account used by retirees and their eligible dependents to pay for any eligible medical expenses.

The PPA established the PPA Benefit Trust to hold money for a retiree medical benefit plan, the “Retiree Health Plan of the Portland Police Association Benefit Trust” in 2002. The Trustees, the Retirement Medical Trust Board, added an active employee benefit plan, the “Active Access Plan,” which provides reimbursement toward medical costs incurred during active employment. The Trustees still encourage you to save your Employee Account benefits for retirement.

Portland Police Association Benefit Trust Contact Information

William C. Earhart Company, Inc. is the fund administrator for the Portland Police Association Benefit Trust.

Portland Police Association Benefit Trust
c/o William C. Earhart Company, Inc.
P.O. Box 4148
Portland, OR 97208
503.460.5263 PPA Benefit Trust Direct Line
503.282.5581 W.C. Earhart Office
800.547.1313 Toll-Free
503.284.9386 Fax

Contact: Ryan Stephens, Sr. Vice President
ryan.s@wcearhart.com

How do I update my address and family information?

Contact the PPA Benefit Trust Fund Office at 503.460.5263.

How do I get Plan information, claims forms, and documents?

Review the information listed on this page. If you don’t find what you’re looking for, contact the PPA Benefit Trust Fund Office at 503.460.5263.

Employee Accounts

The Trust has a separate Employee Account for record keeping purposes for each participant. There is no monthly maximum or minimum or reimbursable expenses. However, benefits will cease under the Plan when your Employee Account reaches a zero balance.

What are my investment options for my Employee Account?

Five investment options:

  1. Money Market Portfolio (Risk: Minimal;
  2. Bond Portfolio (Risk: Low);
  3. Target 2020 Retirement Portfolio (Risk: Conservative);
  4. Target 2030 Retirement Portfolio (Risk: Moderate); and
  5. Target 2040 Retirement Portfolio (Risk: Highest).

Performance

All of these portfolios are professionally managed.
To assist participants in finding an appropriate investment selection, visit the PPA Benefit Trust Performance Updates Page.

When can I make my investment selection?

  • New Hires: Within 30 days;
  • Active Employees: Once annually in November for the following calendar year; or
  • Retirees: Upon retirement and/or Once annually in November for the following calendar year.

Portfolios can be changed only one time annually in November. Portfolio selection applies to all existing assets and future contributions. The Selection Form is due to the Trust Office within 30 days of receipt for new hires. If the Selection Form is NOT returned by the due date, the Employee Account will be invested in the Target 2040 Retirement Portfolio, and the next opportunity to change that investment is the following November.

Download and Print:

Send completed Selection Forms to:

Portland Police Association Benefit Trust
ATTN: Chelsea Budd
William C. Earhart Company, Inc.
P.O. Box 4148
Portland, OR 97208

If you need more information about these options, you can refer to the current “Informational Bulletin about the Participant Investment Options of the Retiree Health Plan.

If you are an active employee participant, you can select only one investment selection for your entire Employee Account investment.

If you are a retired plan participant, your Employee Account consists of two separately tracked accounts:

  1. Your “sick leave account,” which reflects your sick leave transfer to the Trust;
  2. And your “wage transfer account” which reflects the amount withheld from your wages each pay period by the City for contribution to the Trust.

You can invest these two accounts in different selections from the five available investment options listed above. For example, your “wage transfer account” could be invested in the Bond Portfolio and your “sick leave account” could be invested in the Target 2020 Retirement Portfolio. It’s your choice; however, each account can be invested in only one portfolio. You cannot split one of the accounts between two portfolios.

How often can I change my investment selections?

  • Within 30 days of hire;
  • Once annually in November for the following calendar year; or
  • Upon retirement.

Can I opt-out of Reimbursement Benefits?

Yes, Active Access Plan Participants may choose to opt-out of plan benefits for the plan year.

Opting-Out does not stop your payroll contributions to the Plan. Due to the PPA MOU, you cannot opt-out of contributions to the Plan. Opting-out suspends your benefits from this Plan for the entire upcoming Plan year; you will not be able to submit claims for covered expenses. The Trust will continue to deposit your employee payroll contributions into your Employee Account for reimbursement benefits in future plan years and during retirement. If you want to save your Employee Account funds for retiree expenses, you can accomplish this goal by simply not submitting claims during your active employment.

The decision to opt-out of Plan benefits is a serious decision; please take your time to review the following >>> Notice of Annual Opt-out Opportunity Active Access 2019

Questions regarding opting-out? Please call Chelsea Budd at 503.282.5581.

How do I get balance information for my Employee Account?

You will receive a statement from the Trust Office quarterly. Employee Account statements are typically mailed 45 days after the end of the quarter. For example, the first quarter ends on March 31st, and account statements should be mailed by May 15th.  If it is significantly beyond this mailing date and you have not received your account statement, call the Trust Office to inquire. If you are not receiving your statements, your address on file at the Trust Office may need to be updated.

How is the balance of my Employee Account calculated?

The principal in your Employee Account balance consists of payroll deductions deposited to the Trust on your behalf during your employment and the mandatory transfer of accumulated sick leave on your retirement date, per the terms of your Association’s Labor Agreement with the City of Portland. Currently, PPA members contribute 2% of top step officer wage from each paycheck. In addition, PPA members contribute 100% of their accrued sick leave to the Trust upon retirement. These contribution amounts are subject to future changes to the Labor Agreement in collective bargaining.

Investment gains and/or losses are allocated to your Employee Account monthly and depend upon the performance of the investment portfolio that you have selected for the investment of your Employee Account. These investment gains and/or losses (shown on your Employee Account quarterly statement) are net of all fund fees, administrative fees, and investment management fees.

All plan participants, employees, and retirees who have a positive Employee Account balance at the end of the month share the costs of operating the Trust, e.g., auditing, claims administration, insurance, legal advice, etc. Therefore, the Trust will debit your Employee Account monthly for an “administrative fee.” Based upon the estimated costs to operate the Active Access Plan and the Retiree Health Plan, the Trustees recently reviewed the administrative fee and decided not to increase the fee this year. The administrative fee remains $8.10 per month for active employee participants and $7.50 per month for retirees, effective January 1, 2015. (The monthly fee is slightly higher for active employees due to the added cost of compliance with federal healthcare reform laws for the Active Access Plan.” The Trust Office will show the fee as a line item on your Employee Account Quarterly Statement.

Do I need to include the investment returns from my Employee Account on my income tax return?

No. The Plan and Trust are established to offer tax-free investment. The investment returns within the Trust are not taxable.

Do I need to include the reimbursement benefit payments from my Employee Account on my income tax return?

No. The Plan and Trust are established to offer tax-free benefits. The benefits paid from the Trust are not taxable.

What are the tax benefits of investing in this Plan during my employment?

Your employee contributions (both salary contributions and sick leave cash-out contributions) are deposited into the Plan pre-tax. This means that you will not pay taxes on the amount contributed to the Plan, i.e., your taxable income was decreased by the amount contributed to the Plan. Depositing funds into an investment pre-tax saves an average of 15 to 28% (depending upon your tax bracket) on the amount deposited, and thus creates significant growth on these funds immediately just by avoiding taxation.

What medical expenses and premiums are covered by the Plan and reimbursable from my Employee Account?

The Plan will reimburse you for premiums to most health, dental and vision insurance plans, as well as tax-deductible medical expenses; if you could have deducted the medical expenses on your income tax return, they may be reimbursed from your Employee Account.

Medical expenses that are tax deductible are described in IRS Publication 502 http://www.irs.gov/pub/irs-pdf/p502.pdf.

NOTE:  If the Plan does reimburse you for the expenses, you cannot also claim them as deductions on your tax return.

How do I make a claim for benefits from my Employee Account?

Claim FormDownload the Claim Form and submit a completed claim form along with your receipt for payment of premiums or medical expenses to the Trust Office at the following address in order for the Plan to reimburse you from your Employee Account:

Portland Police Association Benefit Trust
ATTN: Debbie Staggs
William C. Earhart Company, Inc.
P.O. Box 4148
Portland, OR 97208

You can also arrange for direct payment of your premiums to a City of Portland healthcare plan. Call the Trust Office to get instructions on how to set up this type of recurring payment.

Can I make a claim for medical expenses or premiums for my spouse or child?

Yes. Plan beneficiaries include your lawful spouse and your children, generally up to their 26th birthday.

Can I make a claim for medical expenses or premiums for my domestic partner?

No. Due to federal law, the Plan cannot pay tax-free benefits to a domestic partner. Taxation of benefits to domestic partners adds unnecessary administrative costs for the Plan. If you do not have a dependent recognized under federal tax law, then you will need to use the benefits exclusively for your own premiums and medical expenses. With the high cost of medical premiums and the early retirement age of police officers, most retirees can use their entire individual account balance just paying for premiums for their own insurance coverage after retirement.

The Plan recognizes all lawful spouses and grants the same rights and benefits to same-sex spouses as to opposite-sex spouses. Same-sex domestic partners who choose to legally marry can receive tax-free benefits under this Plan as legal spouses.

What is the deadline for submitting a claim on my Employee Account?

Claims for reimbursement must be submitted to the Trust Office no later than 90 days after the end of the calendar year in which you made the payment.

When will my benefits terminate?

Benefits will terminate when your Employee Account balance reaches zero. Benefits do not terminate at Medicare eligibility or upon the retiree’s death. After your death, your surviving spouse, surviving children (meeting the eligibility requirements, i.e. under age 26), and any other surviving dependents may receive reimbursement of premiums and medical expenses from the Employee Account until the Employee Account reaches zero.

Can I get benefits from my Employee Account during employment?

Yes. However, this practice is not encouraged. The Employee Account is available to reimburse medical expenses during your employment, but the Trustees encourage you to use this option only in emergency situations when all other sources of payment are unavailable. Remember that this Plan is meant to help you with post-retirement medical expenses. To the extent you use up the Account while you are still working, there will obviously be less available for your retirement years, when your income may be less, and your medical expenses considerably higher.