1. Medical Expense Reimbursement Plan
Prepared by the Peer Benefits Resource Group

2. What is MERP?
A retiree medical expense reimbursement plan established and designed by the WSCFF to help members pay for post retirement medical costs
It assists members in bridging the medical expense gap between retirement and Medicare age (and as a supplement to Medicare)

3. MERP Legally
The MERP is defined as a Welfare Benefit plan and is subject to strict IRS rules regarding:
Participation in the plan
Medical expenses eligible for reimbursement

4. How is it structured?
The plan is administered by The Board of Trustees of the WSCFF Employee Benefit Trust
The WSCFF President appoints 3 Trustees and another 4 Trustees are elected from participating locals
Contact information for the Trust Office:
Washington State Council of Fire Fighters Employee Benefit Trust
c/o Benefit Solutions, Inc.
12121 Harbor Reach Dr., Suite 105
Mukilteo, WA 98275(425)

5. Administration and Control of MERP Trust
The Trustees maintain full control of the MERP Trust
THE TRUSTEES MAY CHOOSE TO CHANGE PLAN BENEFIT LEVELS TO MEET THE NEEDS OF PLAN PARTICIPANTS IN THE FUTURE

6. Administration and Control of MERP Trust (continued…)
The Trustees use a professional investment manager to invest the Plan’s assets in aggregate
The Board of Trustees uses a professional benefit plan administrator (currently BSI) to assist in record-keeping, and distribution of funds (reimbursements)

7. How Does it Work?
We are a self-pay plan, meaning 100% of our contributions come from individual members’ own payroll deductions
The City of Vancouver, our employer, does not currently participate in this program on our behalf

8. High-level Summary…
All contributions are made by individual members and are pre-tax
Contributions are held in “aggregate” in WSCFF Trust, subject to strict fiduciary standards
WSCFF Trustees maintain full control of the Trust and use investment manager to invest the trust funds
All earnings of Trust (and subsequent reimbursements to retirees) are not taxed
Trustees may choose to change plan benefits (ie: change the multiplier) to meet needs of participants
BSI administers record keeping and distribution of funds
Once participation in the plan is negotiated, all members must participate (at the same contribution levels) as required by federal law (IRS)
The monthly benefit is for life unless the Eligible Retiree dies (Survivorship discussed below)

9. So what does this mean to us?
Our monthly contributions
Check out your paystub…once a month your MERP contribution is taken out of your gross income pre-tax
You will find it under Pre-Tax deductions ‘Fire Med Plan’
Our current monthly contribution level is $125
The current plan voted on by Local 452 is to increase this monthly contribution annually by $25 until we reach a monthly contribution of $200

10. What does this mean to me?
A retiree’s monthly benefit level is determined by their Lifetime Credits accrued and the Unit Multiplier in effect when they stop making contributions
Some refer to this as a “defined benefit” however it is “defined” only in the sense that the formula for computing the benefit is known in advance
This does not mean that you are guaranteed a specific benefit level based on your contribution level

11. Why Not? Let’s break it down:
Each $25 contribution is equal to 1 credit
At the end of your career, your “Lifetime Credits” are calculated (the total dollar amount you have contributed to MERP over your career divided by $25)
A multiplier is then used to convert your Lifetime Credits into what you will be eligible for on a monthly basis

12. 25 Year Career Example Monthly Contribution Amount ($)
Monthly Credits Earned ($/25)
Annual Credits Earned (Monthly x12)
Years Left until Retirement
Lifetime Credits Earned (Annual Credits x Yrs until retirement)
Multiplier
What you get monthly upon retirement
$75 3 36 25
900
.39
$351
$100 4 48
1200
$468
$125 5 60
1500
$585
$150 6 72
1800
$702
$175 7 84
2100
$819
$200 8 96
2400
$936

13. Revisiting the Trust
Remember the Trustees have a fiduciary responsibility to maintain the solvency of the trust
As stated above… “Trustees may choose to change plan benefits (ie: change the multiplier) to meet the needs of plan participants in the future”
This is done at their discretion utilizing the advice of their hired advisors
For example, the multiplier was changed in 2012 from 0.42 to 0.39 currently

14. 25 Year Career Example (comparison of multipliers)
Monthly Contribution Amount ($)
Monthly Credits Earned ($/25)
Annual Credits Earned (Monthly x12)
Years Left until Retirement
Lifetime Credits Earned (Annual Credits x Yrs until retirement)
Multiplier
What you get monthly upon retirement
$75 3 36 25
900
.39/.42
$351/$378
$100 4 48
1200
$468/$504
$125 5 60
1500
$585/$630
$150 6 72
1800
$702/$756
$175 7 84
2100
$819/$882
$200 8 96
2400
$936/$1008

15. “Let’s keep it simple” highlights
Plan does not pay “cash” benefits
Plan reimburses you for out-of-pocket expenses incurred (see Appendix for eligible expenses)
Monthly benefit reimbursement does not rollover or accumulate
Monthly benefit is maximum allowable reimbursement for that month
Survivorship Benefit – lifetime benefit until your death, spouse then receives 50% of benefit until Medicare age, at which time benefits terminate
Currently no sick leave conversion for our group

16. LONG…but important example
Consider an Eligible Retiree with a benefit level of $200
In January, he submits an expense voucher for a Covered Expense of $150 incurred in January
The Plan will reimburse him for $150, and there is no $50 carryover to February

17. Continued….
He does not submit any further expense until May, when he submits an expense voucher for a Covered Expense of $550, incurred in March
The Plan will not pay any reimbursement for February, but will pay $550 in one check for the May claim ($200 for March, $200 for April and $150 for May.)

18. Continued….
However, in the preceding example, if the Retiree had also submitted vouchers for $125 in March, April and May, then the Plan would pay him $75 for March, $75 for April and $75 for May in one check, leaving $225 on the $550 expense submitted in May, which the Plan would pay in June ($200) and July ($25)
If the Retiree incurred no further expenses until a $400 expense in November, the Plan would reimburse for that in November and December

19. Continued….
There would be no reimbursement for August, September and October, unless the Retiree subsequently submits expense vouchers for expenses incurred during that August- October period

20. “Other” Plan Highlights explained
Survivorship
The benefit level for a Surviving Spouse is 50% of the benefit level of the Eligible Retiree until the Spouse becomes eligible for Medicare (whether or not Spouse is adequately enrolled) at which time benefit terminates
Rules of Survivorship for Domestic Partners and Dependents are handled differently

21. “Other” Plan Highlights explained
Commencement of Benefits
A retiree is considered eligible to begin receiving benefits once all the following have been met:
Employee has earned 5 years of Active Service in MERP
Contributions have been made to the Plan for all periods of Active Service
The Employee attains age 53
The Employee ceases employment with participating employer

22. “Other” Plan Highlights explained
Delayed commencement of benefits
If an Eligible Retiree reaches age 53 and defers commencement of all benefits from the Plan, the Plan will give the Eligible Retiree 36 Active Service credits for each year of deferral beyond age 53

23. “Other” Plan Highlights explained
Sick leave conversion
Local 452 currently is not allowed to convert sick leave into Active Service credits

24. There you have it…. Not an all-inclusive description of the MERP
Merely a summary of Plan Highlights to help members gain a general understanding of how the MERP works and Local 452’s level of participation in the Plan
Specific questions can be directed to the Peer Benefits Resource Group

25. Appendix
For a list of Reimbursable Expenses, please use the following link to IRS Publication 502
If you have any questions not answered by the link, or any other administrative questions regarding MERP, use the following contact info:
WSCFF Employee Benefit Trust
c/o Benefit Solutions, Inc.
12121 Harbor Reach Dr., Suite 105
Mukilteo, WA 98275
Phone:(425)