1. MERP WSCFF’s Medical Expense Reimbursement Plan for Retirees
Presented by:
DiMartino Associates
Karni Adamson
Becky Wallen
206/ /
Spring 2016

2. MERP Medical Expense Reimbursement Plan through a Retiree Medical Trust (RMT)
Reimburses you – for your lifetime – for:
Premiums for medical, dental, vision, long term care coverage for you and your family (spouse/domestic partner and IRS dependent children)
Other medical, dental and vision expenses (that aren’t covered by insurance) for prevention, diagnosis, and/or treatment of a medical situation for you and your dependents. (Defined by IRC 213(d).)

3. Status of MERP 129 participating locals (over 6,700 members)
111 in Washington
14 in Idaho
2 in Alaska
2 in Montana
Fund balance is over 70 million and growing by approximately $675,000 each month
Approximately 450 retirees are currently accessing benefits

4. Who controls MERP? WSCFF Benefit Trust Board of Trustees
The Board of Trustees is made up of 9 fire fighters all from separate participating locals on staggered terms
6 are elected at WSCFF Annual Convention
Brian Hurley- Tumwater
Jeff Wainwright – Spokane Co. FD #8
Matt Frank– Tacoma Fire Fighters
Craig Soucy – Renton Fire Fighters
Kenny Stuart – Seattle Fire Fighters
Brian Murphy – Anchorage Fire Fighters
3 are appointed by the WSCFF
Kelly Fox
Greg Markley
Ricky Walsh

5. Components of MERP Participation Contribution Amount TAX FREE
The Board of Trustees may adjust the components of this Plan. This is only a summary of the plan and does not replace the specifics of the plan document.
Participation
Contribution Amount TAX FREE
Eligibility for Benefit
Active Service Credit and Unit Multiplier
Reimbursable Expenses
Receiving your Benefit TAX FREE
Duration of Benefits

6. Contribution Amount
Minimum Contribution is $75/month; Locals can increase their contribution amount in MERP
33 Locals have increased their monthly contribution into MERP since 2009
New contribution amount must be a multiple of $25; and there is no maximum contribution amount limit
Contribution amount is the same for all in the bargaining unit

7. How Is My Retiree Benefit Determined?
When you retire, your benefit will be based on the total number of Active Service Units (ASU) you’ve accrued during your career
You receive 1 ASU for each $25 contributed on your behalf into the Trust
Example: $100/month contribution = 4 ASU / month
The higher the contribution amount and the longer you contribute, the higher your retiree benefit

8. What Is The Unit Multiplier (UM)?
UM is actuarially determined based on contributions to the plan, investment income, administrative expenses and demographics.
This amount may change over time.
Your Active Service Units (ASU) multiplied by a Unit Multiplier (UM) = Your Monthly Benefit for reimbursable expenses at retirement

9. Determining Your Benefit
Effective 7/1/15, the Unit Multiplier is $0.41
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

10. Contributions vs. Benefit Payout
Based on the .41 Unit Multiplier, it will take very close to 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 leave

11. NEW Option: Accelerated Benefits Payments
One-time choice at retirement to select a “Level Benefit” or one of three Accelerated Benefit options (1.5x, 2x, 3x)
Accelerated Benefit will pay a larger benefit pre-65 years of age and a smaller benefit post-65
Age adjustment factor based on month of retirement to determine appropriate pre- and post-65 benefit levels

12. Accelerated Benefits Options
Example:
Employee participates in MERP for 15 years at $75/month. He is 55 years old and retires in June 2016.
Option 1 – Level Benefit
Constant Benefit Level = $221.40
*Default Option
Option 2 – 1.5x Benefit Level
Pre-65 Benefit Level = $257.45
Post-65 Benefit Level = $171.64
Option 3 – 2x Benefit Level
Pre-65 Benefit Level = $280.27
Post-65 Benefit Level = $140.14
Option 4- 3x Benefit Level
Pre-65 Benefit Level = $307.54
Post-65 Benefit Level = $102.51
Actuarial value of benefits is consistent regardless of option chosen

13. Eligibility for Benefits
Participate in the Plan at least 5 years (60 contribution months)
Cease working for the bargaining unit
Attain age 53

14. What if I don’t have 5 years participation?
You have the option to make additional 18 months of contributions under COBRA in order to get to the minimum 60 months of contributions.
If you can’t get to 60 months, then:
Take a “reduced benefit level” – access all the contributions you’ve made into the plan for reimbursement of expenses beginning right after separation.

15. Sick Leave Conversion into MERP
As a local, you can choose to convert sick leave cash value tax free
Local defines % of sick leave to convert, and then applies to all members with sick leave value when they separate service (or have yearly cash outs)
The cost of sick leave conversion is determined by member’s age at time of conversion

16. Sick Leave Conversion into MERP
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

17. Determining Sick Leave Conversion
Fire fighter with $15,000 (tax free) of sick leave to convert into MERP and retires at age 53
$15,000 divided by $62.70 = 239 ASU
This fire fighter receives 239 additional ASU from his sick leave cash value or another $97.99/month added on to the monthly lifetime benefit

18. Benefit Duration
Plan was developed to provide fire fighters a benefit until death
When a fire fighter dies at any age, spouse can access 50% of the benefit regardless of spouse’s age and until spouse is eligible for Medicare
If you and your spouse die, eligible dependents would receive 50% of the benefit through age 25

19. How Do I Receive My Benefit?
You must incur an expense and have proof of the expense
Submit proof of expense to BSI via fax or mail
You can batch your expenses and send in quarterly (for example) or submit them as they occur
BSI will verify expense is eligible for reimbursement direct deposit to fire fighter’s account

20. 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, or firefighter dies.

21. What Happens 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

22. 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

23. Note: This is only a summary of the plan and does not replace the specifics of the plan document.