Partnership for Success PlanMember is pleased to be a National Business Partner of AESA bringing financial education, planning resources and investment programs to ESA employees. For Broker Dealer Use Only. Not for Public Distribution.
A little about PlanMember • Established in 1992 in Carpinteria • 170 home office and field support employees • 37 Financial Centers / 500 Financial Professionals • 5,500 school district & nonprofit employers nationwide • $12 billion of total client assets under management • $7 billion in PlanMember Programs For Broker Dealer Use Only. Not for Public Distribution.
Mission Statement Making a Positive Difference for our Partners, Plan Members and Employees through our Partnership For Success Program For Broker Dealer Use Only. Not for Public Distribution.
For Broker Dealer Use Only. Not for Public Distribution.
The PlanMember Workplace Savings Program • 403(b), 457(b), FICA Alt., Special Pay & HRA • Professionally -managed mutual fund portfolios, individual mutual funds and fixed and variable annuity options • Personalized retirement planning services and professional investment recommendations • Online plan enrollment • Plan administration & compliance partnerships • Plan design, legal, executive compensations and OPEB trust consulting services For Broker Dealer Use Only. Not for Public Distribution.
Today’s Topic Accumulated Leave Payouts Strategies for Savings and Growth For Broker Dealer Use Only. Not for Public Distribution.
About the Speakers • • More than 15 years of Leads the Account experience Management and Marketing teams to • Regularly conducts provide unparalleled educational sessions as support to distribution Technical Expert in partners and clients public sector benefit • space Works closely with Trent to drive new • State of Florida Life, sales and partnerships Health & Variable • Annuity License BA from United States Naval Academy, MS • Series 6 and 63 from University of Securities Licenses Maryland, MBA from Trent Teesdale, CEBS Steve Barber • Stanford Graduate GBA, RPA, CEBS Sr. VP of Business Development VP of Business Development School of Business designations For Broker Dealer Use Only. Not for Public Distribution.
Meet MidAmerica | Our Mission We strive to take care of those people who do so much to take care of our communities — like public school employees, Established law enforcement and firefighters, and municipal employees — by providing best-in- 1995 class administration for the benefit plans that allow them to live with security and to retire with peace of mind. For Broker Dealer Use Only. Not for Public Distribution. For broker-dealer use only. Not for public distribution.
Meet MidAmerica • More than 25 years exclusively serving the public sector , largely focused on school districts • Helping public sector employers in 33 states across the country, representing $1.4B AUM • Experts in HRA , 3121 FICA Alternative Plan and Special Pay Plan design and administration For Broker Dealer Use Only. Not for Public Distribution.
The Issue with Accumulated Leave Payouts are subject to FICA withholding and a match by the employer. For Broker Dealer Use Only. Not for Public Distribution.
The Solution A Special Pay Plan (SPP), Health Reimbursement Arrangement (HRA) or SPP/HRA combo. For Broker Dealer Use Only. Not for Public Distribution.
Special Pay Plan | Solving Accumulated Leave Issues Here’s how it works. Contributed upon retirement or Unused separation of sick Severance service. leave 401(a)/403(b) Unused retirement Vacation plan Pay For Broker Dealer Use Only. Not for Public Distribution.
Special Pay Plan | Solving Accumulated Leave Issues Here’s how it benefits. • Employer and employee save • Funds have potential to grow in 7.65% in FICA taxes either a fixed or variable investment • Contributions are made pre-tax • Funds can be self-directed by the participant to meet retirement goals • Funds can roll over to IRA or • Flexible distribution options once IRS other qualified plan age requirement is met • Reduces administrative costs for • Funds can be used for any purpose employer For Broker Dealer Use Only. Not for Public Distribution.
Retiree Health Reimbursement Arrangement Here’s how it works. Contributed upon retirement or Unused separation of sick Severance service. leave Retiree HRA Unused (rHRA) Vacation Pay For Broker Dealer Use Only. Not for Public Distribution.
Retiree Health Reimbursement Arrangement Here’s how it benefits. • Employer and employee save • The employee, their spouse and 7.65% in FICA taxes eligible dependent can use funds to pay for eligible medical expenses tax- • Bridges gap between retirement free and Medicare eligibility • Employee can potentially purchase • Employer can use rHRA in lieu of less expensive coverage through paying for continued insurance public or private exchange coverage during retirement • Funds are invested for potential growth in either fixed or variable account For Broker Dealer Use Only. Not for Public Distribution.
Special Pay & rHRA A powerful retirement benefit when combined For broker-dealer use only. Not for public distribution.
Special Pay Plan/HRA Comparison Retiree HRA Special Pay Plan • Tax-deferred • Tax-free earnings • Taxes Applicable taxes applied at time • Tax-free reimbursements of distributions Reimburse qualified medical Funds can be used for any Use expenses purpose Investments Fixed or variable investments Fixed or variable investments • Retirees must be 59 ½ to take a Access to Retirees can access the HRA at distribution without a penalty OR • Funds any age At least 55 at retirement and separated from service For Broker Dealer Use Only. Not for Public Distribution.
• Accumulated leave can be used to fund both the Special Pay Plan and rHRA • rHRA funds can pay for medical insurance premiums (group or individual), dental and How the plans vision insurance premiums, and other out-of- pocket medical expenses — completely tax-free! work together • Special Pay Plan funds can be used for any purpose once age and eligibility requirements are met • rHRA helps bridge the gap between retirement, Medicare and Medicare Supplements • Both plans can be invested for potential growth For broker-dealer use only. Not for public distribution.
rHRA & Special Pay Plan | A real life example Retiree Count 50 per year Avg. Separating Employee Salary $60,000 Avg. Monthly Health Insurance Premiums for ABC ESA Separated Employees (Single Rate) $600 Avg. Accumulated Leave Payout $20,000 For Broker Dealer Use Only. Not for Public Distribution.
rHRA & Special Pay Plan | A real life example What if ABC ESA paid out Accumulated Leave differently? Participant Earnings and Savings Employer Yearly Savings Savings Amount Savings Amount Social Security Tax Savings $62,000.00 Total Participant Tax Savings $2,630.00 (Permanent) (Permanent) Medicare Tax Savings $14,500.00 $3,300.00 Total Participant Tax Savings (Deferred) (Permanent) $1,332.25 Total Participant Interest Earned Based on HRA/SP split with $7,262.25 Total Value of Participant Benefit 25% to rHRA, 75% to SP plan, Months of Medical Premiums Paid by and 50 retirees per year 14 rHRA (Single Employees) For Broker Dealer Use Only. Not for Public Distribution.
We take care of our customers. Customer Claims Auto- Client Technical Education Retention Substantiation Services Customized Simply swipe a We offer an online 99% materials and debit card and go – account Since educational no need to file management measurements presentations and claims in most platform for all began in 2002. support services. cases. plans and a mobile app for HRAs/FSAs. For Broker Dealer Use Only. Not for Public Distribution.
Questions? Trent.Teesdale@myMidAmerica.com Steve.Barber@myMidAmerica.com Q & A www.myMidAmerica.com Session Search MidAmerica Administrative & Retirement Solutions on LinkedIn! For Broker Dealer Use Only. Not for Public Distribution.
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