.: Frequently Asked Questions

  1. Question-
    When and Why Was The Plan Created?

    Answer-

    The Manhattan Beach Police Association (MBPOA) Retiree Medical Reimbursement Plan and Trust was established effective January 1, 1997. The plan is intended to provide reimbursement for eligible medical expenses to members and their dependents that qualify for benefits under the plan. In general, benefits are intended to be available to retired MBPOA members and their dependents when benefits are no longer available from the City of Manhattan Beach.

  2. Question-
    Who Can Receive Benefits From the Plan?

    Answer-

    Benefits may become payable to retired MBPOA members, their spouses and dependents. Surviving spouses and dependents may also qualify for benefits. The plan includes rules which require any benefits to be vested before they are payable (see below). Except for members who reach age 65 (or would have had they survived) before 2007, no benefits will begin until January 1, 2007. The purpose of this limitation is to allow members to build up their vested status and to permit plan assets to accumulate to a responsible level.


  3. Question-
    How Do I Become a Participant in the Plan?

    Answer-

    The rules for plan participation are different for MBPOA members who were/are hired before and after January 1, 1997 - the plan's effective date. Members hired before 1/1/97 were permitted to voluntarily join the plan on 1/1/97 by agreeing to make minimum contributions as described below. Members hired after 1/1/97 are required to make minimum contributions as a condition of MBPOA membership. Former MBPOA members who have been promoted to a position which precludes continued membership in the MBPOA may continue as participants under the plan by continuing to make plan contributions and current MBPOA dues payments (unless such dues are prohibited by law).

  4. Question-
    How Much Must I Contribute?

    Answer-

    All members must make contributions to the trust in order to become participants in the plan. As noted above, plan participation was voluntary for members hired before 1/1/97 and mandatory for those hired after this date. Beginning 1/1/97, the plan's minimum contribution was $25 per pay period. For members hired after 1/1/98, the minimum contribution is $35 per pay period. The amount actually contributed by a participant will determine how much of their benefit is vested as described below. The initial minimum contribution was selected in order to allow initial plan participants to reach 25% vested benefit status by the year 2007 (or total contributions of $5950). A participant may contribute more than the $25 minimum up until full 100% vesting is achieved (or total contributions of $23,800). No contributions may be made after full vesting is reached. The minimum and maximum contribution may be adjusted from time to time by the trustees as described below. The current minimum contribution for all members is $65.00 per pay period. The minimum and maximum vesting amounts for members joining the Trust after March 31, 2008 and before August 15, 2008 are $9651.00 (25%) and $38,605.00 (100%). For members joining the Trust after August 15, 2008, the minimum and maximum vesting amounts are $10,536.50 (25%) and $42,146.00 (100%).

  5. Question-
    Can I Enroll Late and What Does It Cost?

    Answer-

    Yes. Members who declined to join the plan on 1/1/97 may join the plan later, subject to 3 conditions:
    • 1. They must contribute at the rate in effect for new members at the time they join the plan.
    • 2. They must pay a penalty equal to $50 times the number of months from 1/1/97 until the date they join the plan.
    • 3. The penalty will not count toward their calculation of vested benefits and are due no later than 12 months following late entry into the plan.
    The penalty may be waived by the trustees by simple majority vote if they determine an individual hardship exists.

  6. Question-
    Can I Stop My Contributions?

    Answer-

    Yes, but only after you have achieved the 25% vesting level. If you choose to stop making contributions, you will be permitted a one-time opportunity to resume making contributions subject to 2 conditions:
    • 1. You must pay a penalty equal to $50 times the number of months you chose not to make contributions.
    • 2. The penalty will not count toward their calculation of vested benefits and is due no later than 12 months following reentry into the plan.
    If you choose to stop making contributions after resuming them, you will not be permitted to resume them again.

  7. Question-
    Can I Change the Amount of My Contributions? How?

    Answer-

    Yes. Each year you will be given one opportunity to change the amount of your contributions. They may not, however, be reduced below the minimum amount then in effect and may not continue after you have reached full vesting.

  8. Question-
    Will the Trustees Ever Change the Amount of Contributions?

    Answer-

    The answer is probably yes. The plan gives the trustees the discretion to adjust contribution levels (both minimum and maximum) if they determine the plan's fiscal position requires it. The timing and amount of any such adjustments will take into account such factors as the increase in medical inflation since the last adjustment and the plan's funded status as determined by an independent actuary. No adjustments will have the effect of reducing the level of vesting then reached by a participant.

  9. Question-
    What Is Vesting?

    Answer-

    The plan provides that only vested benefits will payable to participants and their dependents. Your vested percentage will multiplied times the maximum monthly benefit then in effect to determine your maximum monthly reimbursement. In addition, your vesting percentage must be at least 25% or more. You are 0% vested until you reach the 25% level and no benefits will be payable to you or your dependents. Should you terminate employment for reasons other than becoming disabled before you reach minimum vesting, you will forfeit any contributions made and no benefits will be payable to you or your dependents. If your are reemployed in a position subject to the MBPOA bargaining agreement, you will be required to begin making contributions again (at the minimum level then in effect for new hires) and your prior contributions will be counted toward vesting.

  10. Question-
    What Is the Maximum Benefit?

    Answer-

    Two factors determine the monthly maximum benefit each year:
    • 1.The published CalPERS rates for PERSCare indemnity coverage, and
    • 2. The monthly maximum amounts declared by the trustees for the year. This amount will be announced in April or October for the coming year.
    Unused monthly benefits will accumulate during the calendar year and will be available for reimbursement for eligible expenses incurred during the year. In no event, however, will benefits paid at any time during the year exceed the monthly maximum benefit multiplied times the number of months then completed for the current plan year.

  11. Question-
    How Is the Maximum Benefit chosen?

    Answer-

    The plan's intent is to declare the full applicable PersCare rates as the plan's maximum benefits each year. The trustees' ability to do this will depend upon the plan's funded status from year to year. As fiduciaries, the trustees are responsible for investing and preserving plan assets - this includes establishing monthly maximum benefits that the trust can reasonably afford. It is intended that benefits will primarily funded from trust investment returns and not trust corpus. From time to time, the trustees will conduct an actuarial valuation to assess the plan's funded status to help them exercise their discretion.

  12. Question-
    How About a Vesting Example?

    Answer-

    For members who joined the Trust prior to April 1, 2008 25% vesting is achieved when a member has contributed $5,950 to the trust and 100% vesting requires total contributions of $23,800. Both the $5,950 and $23,800 are subject to adjustment from time to time by the trustees as described in question 8. Any such adjustment will be communicated before it becomes effective and will not reduce the then vested percentage of any participant. The exact vested percentage of any participant will be determined by interpolation between $5,950 and $23,800 (or the amounts currently in effect) so for example, contributions of $11,900 will achieve 50% vesting. There is no interpolation below $5,950 - vested benefit is 0%.

  13. Question-
    Can I Still Increase My Vesting % If I Retire Before 2007?

    Answer-

    As noted above, members who became participants on 1/1/97 (or later became participants by paying the appropriate penalty) and retire before 2007 may continue making contributions to increase their vested benefit percentage up until the earlier of 2007 or reaching age 65.

  14. Question-
    In General, What Benefits Does the Plan Provide and to Whom?

    Answer-

    Question 10 describes several factors used by the trustees to declare the maximum monthly benefit each year. As noted on Question 11, the actual amount declared each year will also be affected by the plan's funded status. For long-term trust commitments like that established by our plan, it is appropriate and necessary to maintain equity among generations of participants by adjusting benefits and/or contributions.

  15. Question-
    When Can I Retire?

    Answer-

    For purposes of Trust benefits, you may retire anytime after you reach age 50 if you have achieved at least the minimum 25% vesting. If you do not qualify for continued medical benefits under the City's or another employer sponsored plan, you may begin collecting benefits when you retire after age 50. If you do qualify for such benefits, you cannot begin collecting benefits from our plan until you reach age 65. If you have been married for more than one year and retire after age 50 but before age 65, your spouse and dependents will be eligible for benefits upon your retirement so long as they are not eligible for another employer sponsored medical plan.

  16. Question-
    Suppose I Terminate or Become Disabled Before I Retire? What Happens to My Contributions?

    Answer-

    If your employment terminates (except by reason of disability) before you become 25% vested, no benefits will be payable and you will forfeit your contributions (subject to possible reinstatement upon reemployment as noted in question 9). If your employment terminates and you are at least 25% vested, you and your spouse/dependents (if you have been married for at least one year when you terminate) will be eligible for benefits beginning as described in Question 17. If your employment terminates due to your becoming disabed before you become 25% vested, you may continue making contributions until you reach 25% vesting.

  17. Question-
    When Can I Expect to Collect My Benefits?

    Answer-

    As noted in Question 1, benefits are intended to be available to vested members when they are no longer eligible for continued medical benefits from the City of Manhattan Beach (or another employer sponsored plan). Members are eligible to begin receiving benefits from our plan at age 50 and spouse/dependents (if any) may begin receiving benefits upon the member's retirement on or after age 50 (so long as the spouse/dependents are not eligible for another employer sponsored medical plan). Members who retire after age 50 and their spouse/dependents (if any) who do not qualify for continued medical benefits from the City (or another employer-sponsored plan) are eligible to begin receiving immediately upon retirement.

  18. Question-
    Suppose I Die Before I Retire?

    Answer-

    If you have
    • 1. achieved at least 25% vesting.
    • 2. been married for at least one year and/or have one or more dependents.
    • 3. you die before you retire

    your spouse/dependents will be eligible for 50% the benefit you would have been entitled to had you actually retired on the day immediately preceding your death. This benefit will become payable when you would have become age 50 or 2007 if later. If you were not vested at death, your contributions (only) will be returned to your spouse. Instead of receiving a return of your contributions, your spouse may elect to purchase a vested benefit within 6 months of your death by paying the minimum rate then in effect. If you are not survived by a spouse and or dependents as described above, no benefits will be payable and your contributions will be forfeited.

  19. Question-
    If I Die After Retirement, Are Any More Benefits Provided?

    Answer-

    No, but your surviving spouse/dependents (if any) will continue to be eligible to receive benefits equal to 100% of the benefit you were receiving prior to your death. If you are not survived by a spouse or dependents as described above, no further benefits will be payable after your death.

  20. Question-
    Suppose I Die Before Achieving Any Vesting?

    Answer-

    If you have no surviving spouse or dependents, no benefits will be payable and your contributions will be forfeited. If you do have a surviving spouse and/or dependents, they may qualify for benefits as described in questions 18 and 19.

  21. Question-
    What Expenses Will the Plan Reimburse Me For?

    Answer-

    The plan will reimburse eligible participants and dependents, up to the vested maximum monthly benefit applicable to them (eg. vested percentage multiplied times the maximum monthly benefit) for expenses incurred for medical insurance premiums and direct expenses considered deductible under Internal Revenue Code Section 213. Participants are encouraged to review IRS Publication 502 for further details. This publication can be also be obtained from the IRS.

  22. Question-
    How Do I Apply For Reimbursements?

    Answer-

    You and/or your surviving spouse or dependents must submit a written Claim Form to the Claims Administrator at the following address: Flex-Care, Keenan Health Care Claims: P.O. Box 2744 Torrance, Ca. 90509. The claim form must be complete and include all information requested.

  23. Question-
    How Can I Appeal Any Denied Claims?

    Answer-

    Your claim will be approved (in full or in part) or denied within 90 days of receipt by the trustees. This time period may be extended, but for no more than an additional 90 days if special circumstances require. If your claim is not denied within this period, it will be paid. If your claim is denied, the trustees will provide the reason(s) for the denial, reference to the particular section(s) of the plan upon which the denial is based, a description of any additional information necessary to approve the claim and an explanation of the procedure for appealing the claim. Your appeal, if any, must be submitted to the trustees within 60 days of your receipt of a denied claim.

  24. Question-
    How Does The Trust Work?

    Answer-

    The trust has qualified for special tax treatment under Internal Revenue Code Section 501(c)(9). This means you will not be taxed on vested benefits while they accrue and the trust will not pay income tax on its investment earnings, thus enhancing our ability to achieve a well-funded plan. All assets are held by the trustees in their capacity as fiduciaries, for the exclusive benefit of plan participants and their dependents. Your contributions are deposited into the trust and invested, along with all other plan funds, by the trustees in accordance with the investment policy established by them. When benefits become payable, they are drawn from the trust. Other appropriate expenses, such as for the preparation of this plan summary, are also paid by the trust. Each year, the plan files an annual report with the IRS that summarizes trust fund receipts and disbursements. A summary of this filing is then prepared and distributed to all plan participants.

  25. Question-
    How Are Plan Funds Invested?

    Answer-

    The trustees have, as required by the trust document, established an investment policy that is then used by them to invest plan assets. Investment results are monitored from time to time and new investment decisions are made as appropriate. The trustees, as fiduciaries under ERISA (see below), are subject to various stringent requirements concerning investments that are permitted by the trust.

  26. Question-
    How Do Investment Results Affect My Benefits?

    Answer-

    All investment earnings, less expenses, increase aggregate plan assets available to pay plan benefits. Good investment results enhance the plan's funded status, increase the trustees' ability to declare maximum monthly benefits each year and reduce the need to increase contribution levels. Investment results are never credited to individual participants.

  27. Question-
    Who Are the Trustees?

    Answer-

    The trustees, who are responsible for administering the plan and trust, are elected by the MBPOA membership in accordance with the By-laws of the MBPOA. No more than 1 member of the MBPOA Board of Directors may serve as a trustee at one time. The terms, powers and duties of the trustees are set forth in the formal plan and trust document that is available upon request by MBPOA members.

  28. Question-
    Can the Plan Be Amended or Terminated?

    Answer-

    While the plan is intended to operate indefinitely, the trustees are empowered to amend or terminate it as appropriate. It should be noted that since the plan may well be in existence for many years into the future, it is in the best interest of participants to preserve the flexibility to react to future events not foreseeable today.

  29. Question-
    What Is ERISA?

    Answer-

    The Employee Retirement Income Security Act of 1994 (ERISA) was enacted for the protection of benefit plan participants and their beneficiaries. As noted above, it includes fiduciary standards, reporting and disclosure requirements and many other protections. One of those protections is the requirement that participants be given the information contained in the following question/answer.

  30. Question-
    How Does ERISA Protect Me?

    Answer-

    Plan participants in this plan are entitled to certain rights and protections under the ERISA. ERISA specifies that all plan participants shall be entitled to:
    • Examine, without charge, at the plan administrator's office, all plan documents and copies of all documents filed by the plan with the U.S. Department of Labor, such as detailed annual reports and plan descriptions.
    • Obtain copies of all the plan documents and other plan information upon written request to the plan administrator. The plan administrator may make a reasonable charge for copies.
    In addition to creating rights for plan participants, ERISA imposes obligations upon the individuals who are responsible for the operation of the plan. The individuals who operate the plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interest of the plan participants and their beneficiaries. No one, including your employer or any other person, may fire a plan participant or otherwise discriminate against a plan participant in any way to prevent the plan participant from obtaining benefits under the plan or from exercising his or her rights under ERISA. If a plan participant's claim for a benefit is denied, in whole or in part, the plan participant must receive a written explanation of the reason for the denial. The plan participant has the right to have the plan review and reconsider the claim. Under ERISA there are steps that the plan participant can take to enforce the above rights. For instance, if the plan participant requests materials from the plan and does not receive them within 30 days, that person may file suit in federal court. In such a case, the court may require the plan administrator to provide the materials and to pay the plan participant up to $100 a day until he or she receives the materials, unless the materials were not sent because of reasons beyond the control of the plan administrator. If the plan participant has a claim for benefits which is denied or ignored, in whole or in part, that participant may file suit in state or federal court. If it should happen that the plan fiduciaries misuse the plan's money, or if a plan participant is discriminated against for asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in federal court. The court will decide who should pay court costs and legal fees. If the plan participant is successful, the court may order the person sued to pay these costs and fees. If the plan participant loses, the court may order him or her to pay these costs and fees, for example, if it finds the claim or suit to be frivolous. If the plan participant has any questions about the plan, he or she should contact the plan administrator. If the plan participant has any questions about this statement or his or her rights under ERISA or the Health Insurance Portability and Accountability Act (HIPAA), that plan participant should contact the nearest area office of the Pension and Welfare Benefits Administration, U.S. Department of Labor listed in the telephone directory of the Division of Technical Assistance and Inquiries, Pension and Welfare Administration, at 200 Constitution Avenue, NW, Washington, DC 20210.





















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