.: How The Trust Works
concept of the Trust is really quite simple. Members contribute
a small portion of each paycheck to their individual account
within the Trust Fund. These contributions continue until the Member reaches, at least,
25% of the maximum vesting amount in effect when they join the Trust. The maximum vesting
amount is determined by the Trustees based on data provided by a professional actuary.
The Trustees periodically adjust the maximum vesting amount to assure that the Fund keeps
pace with inflation. The adjusted maximum vesting amount applies to Members who join the Trust
after the adjusted amount takes effect. The Trustees combine the contributions of all
members and, with professional guidance, invest the funds. Annually, the Trustees
establish the maximum annual benefit amount based on the number of current and
projected retirees and the balance of the Trust Account. When an Officer retires,
their final vesting level is determined by comparing the balance in their individual
account with the maximum vesting amount in effect when they joined the Trust. The
retiree's monthly benefit amount is the 100% vesting benefit amount multiplied by the
retiree's final vesting percentage. A professional benefit administrator processes
claims according to the Trust documents, IRS Rules, and direction of the Trustees. Claims
are reimbursed up to the retirees monthly benefit amount. The Trust is governed by IRS Code 501(c)(9). Member contributions
are taxed as income, but benefits paid are non-taxable. Examples
of benefits are compensation for actual expenses such as medical,
dental, and vision insurance premiums, deductibles, and co-payments.
In addition, medical, dental, and vision expenses not covered
by insurance may also be covered.
.: Want To Form Your Own Trust?
If you'd like information about forming a
Retiree Medical Trust for your public agency or employee group, check the following resources: