1. MERP WSCFF’s Medical Expense Reimbursement Plan Fall 2017
Greg DiMartino | Becky Wallen | Ashton Alvarez
1501 Fourth Avenue | Suite 2400 | Seattle, WA 98101
Tel: (206) or (800) | Fax: (206)
Proprietary & Confidential

2. MERP is a Retiree Medical Trust (RMT)
Established to help active employees start funding for retiree medical expenses
Entire bargaining unit or group must participate – no individual election
Pre-Tax contributions are made on behalf of active employees using Employer dollars (IRS considers mandatory employee contributions equally permissible)
Contributions are pooled and held in a Trust
Upon retirement, member receives regular benefit payments for healthcare expenses which are non-taxable to the retiree

3. MERP is a Retiree Medical Trust (RMT)
Reimburses retirees for out-of-pocket healthcare-related expenses
Medical/Medicare/Dental/Vision/Long Term Care Insurance Premiums
Lasik eye surgery, hearing aids, prescription drugs
…Any other IRC 213(d) eligible expense
May cover retiree, legal spouse and IRS-eligible dependents
Triple Tax Indemnity
Plan is funded with pre-tax money
Earnings on Contributions are accrued on a non-taxable basis
Plan benefits are tax-free to the employee under IRS Section 105
NCPERS, B. Shana Saichek – Creating a Retiree Medical Trust: How Employers & Employees Can Use Pre-Tax Dollars to Fund Their Retiree Medical Costs

4. All of whom still serve the MERP Board today!
The WSCFF MERP
Launched in 1999
WSCFF funded around $100,000 toward start-up costs and benefits
MERP Board Hired Trust Advisors:
Shana Saichek – Trust Legal Counsel
DiMartino Associates – Trust Consultant
Benefit Solutions, Inc. – Trust Administrator
All of whom still serve the MERP Board today!

5. MERP Today 132 Participating Locals (over 6,800 members)
111 in Washington
15 in Idaho
3 in Alaska
3 in Montana
Fund balance is over $96 Million and growing by approximately $800,000 each month
Approximately 575 retirees are currently accessing benefits

6. Retirees Accessing MERP Benefits
*In 2017, we are on pace to pay out more than $1.5M in benefits to more than 600 beneficiaries!

7. Who Controls MERP? WSCFF Benefit Trust Board of Trustees
Made up of 9 fire fighters all from separate participating locals
5 are elected at WSCFF Annual Convention
Brian Hurley- Tumwater Fire Fighters
Jeff Wainwright – Spokane Co. FD #8
Ricky Walsh– Richland Fire Fighters (Retired)
Craig Soucy – Renton Fire Fighters
Kenny Stuart – Seattle Fire Fighters
4 are appointed by the WSCFF
Dennis Lawson
Greg Markley
Kelly Fox
Brian Murphy – Anchorage Fire Fighters

8. Components of MERP Participation Reimbursable Expenses
Contribution Amount TAX FREE
Duration of Benefits
Eligibility for Lifetime Benefit
Active Service Unit (ASU) and Unit Multiplier
Receiving your Benefit TAX FREE

9. Contribution Amount Minimum contribution amount is $75/month
May increase contribution amount in increments of $25, with no maximum contribution amount
40 locals have increased contributions since 2009
Contribution must be the same for the entire bargaining unit or class

10. How is the MERP benefit determined?
Benefit is based on total number of Active Service Units (ASU’s) you’ve accrued throughout your career
You get 1 ASU for each $25 contributed on your behalf to the Trust
Example: $100/month = 4 ASU

11. The Unit Multiplier (UM)
UM is actuarially determined based on contributions to the plan, investment income, administrative expenses and plan demographics
UM may change over time (and it has)
Active Service Units (ASU) x Unit Multiplier (UM) = Your Monthly Benefit
Effective 7/1/15, the Unit Multiplier is $0.41

12. Sample MERP Benefits
ASU/Month x # of Months x # of years = Total ASU’s
Total ASU’s x Unit Multiplier = Monthly MERP Benefit
NEW: Use the MERP web portal to estimate your Monthly Retiree Benefit

13. Sample Benefit Calculations
Fire Fighter #1 - $75 contribution for 11 years
$75 = 3 ASU per month X 12 X 11 years = 396 ASU
396 X .41 = $ monthly benefit
Fire Fighter #2 - $75 contribution for 11 years; Local votes to increase contribution to $200 and FF contributes this for 4 years; 15 total years of contributions
3 X 12 X 11 years = 396 ASU
8 X 12 X 4 years = 384 ASU
= 780 total ASU X .41 = $ monthly benefit
Fire Fighter #3 - $75 contribution for 11 years; Local votes to increase contribution to $200 and FF contributes this for 14 years; 25 total years of contributions
8 X 12 X 14 years = 1,344 ASU
,344 = 1,740 total ASU X .41 = $ monthly benefit

14. Contribution vs. Benefit Payout
Based on the $0.41 Unit Multiplier, it will take just over 5 years of accessing your full monthly benefit amount for you to receive all your contributions back in benefit payout.
FF #1 contributed $9,900 and receives $ in monthly benefits: 9,900 / = 61 months
FF #2 contributed $19,500 and receives $ in monthly benefits: 19,500 / = 61 months
FF #3 contributed $43,500 and receives $ in monthly benefits: 27,900 / = 61 months
* Does not apply to converted sick/vacation leave

15. Eligibility for Lifetime Benefit
Participate in the Plan at least 5 years (60 contribution months)
Cease working for the Employer group
Attain age 53

16. What if you don’t have 5 years of Participation?
COBRA Self-Payments – you have the option to make up to 18 months of post-tax COBRA payments
Reduced MERP benefits
Sick Leave or Vacation Conversion

17. Sick / Vacation Leave Conversion
As a Local, you can choose to convert sick and/or vacation leave cash value into MERP tax-free
Local defines % of sick leave to convert and applies to all members with sick or vacation leave value when they separate service (plan can also accommodate annual transfers)
The cost of conversion is determined by member’s age at the time of conversion

18. Sick / Vacation Leave Conversion
Age at Time of Conversion Cost of One (1) Active Service Unit
Up to and through age $26.02
age $27.84
age $29.79
age $31.88
age $34.11
age $36.49
age $39.05
age $41.78
age $44.71
age $47.84
age $51.19
age $54.77
age $58.60
age $62.70
age $62.10
age $61.46

19. Sick / Vacation Leave Conversion
Example:
Fire Fighter with $15,000 (tax-free) of sick leave to convert into MERP, retiring at age 53
$15,000 / $62.70 = 239 ASU
Fire Fighter receives 239 additional ASU from sick leave cash value; equates to another $97.99 added onto the monthly lifetime benefit

20. Sick / Vacation Leave Conversion
Additional Considerations:
How will surviving spouses be treated with regard to converting sick leave?
Do you also have an HRA or a VEBA plan through your employer?

21. Accelerated Benefit Options
One-Time Choice at retirement to select a “Level Benefit” or one of three Accelerated Benefit options
Accelerated Benefit will pay a larger benefit pre-65 years of age and smaller benefit post-65
Calculated using an age-adjustment factor based on month of retirement to determine appropriate pre- and post-65 benefit levels

22. Accelerated Benefit Options
Example: Employee Participates in MERP for 15 years at $75/month and retires in June 2017 at age 55.
Option 1: Level Benefit
Constant Benefit Level = $221.40
*Default Option
Option 2
Pre-65 Benefit Level = $257.45
Post-65 Benefit Level = $171.64
Option 3
Pre-65 Benefit Level = $280.27
Post-65 Benefit Level = $140.14
Option 4
Pre-65 Benefit Level = $307.54
Post-65 Benefit Level = $102.51
Actuarial value of benefits is consistent regardless of option chosen

23. Benefit Duration & Survivor Benefit
MERP was developed to provide the fire fighter a benefit until death
If you die at any age, spouse can access 50% of the benefit amount until age 65
If there is no spouse, eligible dependents would receive 50% of the benefit through age 25
No spouse or dependents? Money stays in Trust and is paid out to other plan beneficiaries

24. How are Benefits Received?
You must incur an expense and have proof of the expense
Submit proof of expense to BSI (Trust Administrator) via online portal, fax, or mail
Can batch expenses quarterly or annually…or whenever
Recurring claims
Trust Administrator will verify that expense is eligible for reimbursement and direct deposit funds to fire fighter’s account

25. Rollover of Expenses
Once you begin accessing your benefit but in any particular month don’t use your entire monthly benefit, the leftover amount does not rollover.
Conversely, if expenses exceed your benefit amount, then the expense DOES rollover to any subsequent month that you have leftover benefit amount to apply until expense is completely reimbursed.

26. What happen if I leave Employment at my Local?
If you go to another local participating in MERP, your participation accrual continues
If you go to another job (or another local not in MERP), your months/years of participation in MERP are frozen and you may access your benefit when you reach age 53
If you have less than 60 months in the plan, you may access your reduced benefit right after separation

27. Delayed Commencement of Benefit
Available to FFs with 5 years participation in the plan when they separate service
If FF who is otherwise eligible for a benefit, chooses to “delay” accessing their benefit for a full year, they receive another year of Active Service Units
FF may delay - in full year increments - for as long as they desire

28. The Trust Office
Benefit Solutions, Inc. is the Trust Office for the WSCFF MERP and is your main point of contact for questions regarding your MERP benefits
Benefit Calculation Assistance
Claim Inquiries /Status
Personal Information Updates

29. Upon Retirement…
Once the Trust Office is notified of your impending retirement, you will receive a packet in the mail which will include the following:
Retiree Options Letter
COBRA Election Notice
Delayed Commencement Paperwork
Direct Deposit Form
MERP Claim Reimbursement Form
You should contact the Trust Office with any questions about this packet at or

30. Your Contacts…
Greg DiMartino (President) Becky Wallen Ashton Alvarez
1501 Fourth Avenue | Suite 2400 | Seattle, WA 98101
Tel: (206) | Fax: (206)
Proprietary & Confidential