Partnership for Success PlanMember is pleased to be a National - - PowerPoint PPT Presentation

For Broker Dealer Use Only. Not for Public Distribution.

Partnership for Success

PlanMember is pleased to be a National Business Partner

• f 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.

Making a Positive Difference for our Partners, Plan Members and Employees through our Partnership For Success Program

Mission Statement

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

Steve Barber

VP of Business Development

Trent Teesdale, CEBS

• Sr. VP of Business Development
• More than 15 years of

experience

• Regularly conducts

educational sessions as Technical Expert in public sector benefit space

• State of Florida Life,

Health & Variable Annuity License

• Series 6 and 63

Securities Licenses

• GBA, RPA, CEBS

designations

• Leads the Account

Management and Marketing teams to provide unparalleled support to distribution partners and clients

• Works closely with

Trent to drive new sales and partnerships

• BA from United States

Naval Academy, MS from University of Maryland, MBA from Stanford Graduate School of Business

For Broker Dealer Use Only. Not for Public Distribution.

Meet MidAmerica | Our Mission

Established 1995

We strive to take care of those people who do so much to take care of our communities—like public school employees, law enforcement and firefighters, and municipal employees—by providing best-in- 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.

Unused sick leave Unused Vacation Pay Severance Contributed upon retirement or separation of service.

401(a)/403(b) retirement plan

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

7.65% in FICA taxes

• Contributions are made pre-tax
• Funds can roll over to IRA or
• ther qualified plan
• Reduces administrative costs for

employer

• Funds have potential to grow in

either a fixed or variable investment

• Funds can be self-directed by the

participant to meet retirement goals

• Flexible distribution options once IRS

age requirement is met

• Funds can be used for any purpose

For Broker Dealer Use Only. Not for Public Distribution.

Retiree Health Reimbursement Arrangement

Here’s how it works.

Unused sick leave Unused Vacation Pay Severance Contributed upon retirement or separation of service.

Retiree HRA (rHRA)

For Broker Dealer Use Only. Not for Public Distribution.

Retiree Health Reimbursement Arrangement

• Employer and employee save

7.65% in FICA taxes

• Bridges gap between retirement

and Medicare eligibility

• Employer can use rHRA in lieu of

paying for continued insurance coverage during retirement

• The employee, their spouse and

eligible dependent can use funds to pay for eligible medical expenses tax- free

• Employee can potentially purchase

less expensive coverage through public or private exchange

• Funds are invested for potential

growth in either fixed or variable account

Here’s how it benefits.

Special Pay & rHRA

A powerful retirement benefit when combined

For broker-dealer use only. Not for public distribution.

For Broker Dealer Use Only. Not for Public Distribution.

Special Pay Plan/HRA Comparison

Retiree HRA Special Pay Plan

Taxes

• Tax-free earnings
• Tax-free reimbursements
• Tax-deferred
• Applicable taxes applied at time
• f distributions

Use Reimburse qualified medical expenses Funds can be used for any purpose Investments Fixed or variable investments Fixed or variable investments Access to Funds Retirees can access the HRA at any age

• Retirees must be 59 ½ to take a

distribution without a penalty OR

• At least 55 at retirement and

separated from service

• 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 vision insurance premiums, and other out-of- pocket medical expenses—completely tax-free!

• 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

How the plans work together

For broker-dealer use only. Not for public distribution.

For Broker Dealer Use Only. Not for Public Distribution.

rHRA & Special Pay Plan | A real life example

ABC ESA

Retiree Count

50 per year

• Avg. Separating Employee Salary

$60,000

• Avg. Monthly Health Insurance Premiums for

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

Savings Amount

Total Participant Tax Savings (Permanent)

$2,630.00

Total Participant Tax Savings (Deferred)

$3,300.00

Total Participant Interest Earned

$1,332.25

Total Value of Participant Benefit

$7,262.25

Months of Medical Premiums Paid by rHRA (Single Employees)

14 Employer Yearly Savings

Savings Amount

Social Security Tax Savings (Permanent)

$62,000.00

Medicare Tax Savings (Permanent)

$14,500.00 Based on HRA/SP split with 25% to rHRA, 75% to SP plan, and 50 retirees per year

For Broker Dealer Use Only. Not for Public Distribution.

We take care of our customers.

Client Retention

99%

Since measurements began in 2002.

Claims Auto- Substantiation

Simply swipe a debit card and go – no need to file claims in most cases.

Customer Education

Customized materials and educational presentations and support services.

Technical Services

We offer an online account management platform for all plans and a mobile app for HRAs/FSAs.

For Broker Dealer Use Only. Not for Public Distribution.

Questions?

Q & A Session

Trent.Teesdale@myMidAmerica.com Steve.Barber@myMidAmerica.com www.myMidAmerica.com Search MidAmerica Administrative & Retirement Solutions on LinkedIn!