Proposed Post Retirement Medical Savings Plan
The City of Chicago has proposed a VEBA (Voluntary Employee Benefit Association) Plan for all Active Sergeants, henceforth, referred to as the "Plan". The purpose of this Plan is to provide members an opportunity to pre-fund the costs of their health care during retirement. This proposed Plan is exactly the same plan that has been presented to the Captain's and Lieutenant's for their consideration.
In order for this Plan to be implemented it will require the approval of the active membership. Each active sergeant will have the opportunity to cast their vote to either approve or reject the Plan. Ballots will be mailed to each member's residence. THIS IS AN EXTREMELY IMPORTANT ISSUE AND YOUR VOTE IS VERY IMPORTANT. This Plan will either be approved or rejected based on the majority of votes cast from the ballots that are returned. This Plan, if approved will make it mandatory that all active sergeants participate. IF APPROVED, YOU WILL NOT BE ABLE TO OPT OUT OF THIS PLAN. This Plan has financial requirements and each active sergeant needs to evaluate how it will affect them and their families.
Please review the attached files carefully so that you will be able to make an informed decision. If you are not able to download the documents or would prefer a hard copy, please contact any elected representative of the Chicago Police Sergeants' Association. You can also contact the C.P.S.A. at 773-376-7272 and request a copy.
I have outlined some key points of this proposed Plan. Please refer to the attached documents for more detailed information.
The City's Benefits Committee has selected Nationwide Retirement Solutions as the vendor to provide recordkeeping, investment, claim payment and related services to the VEBA.
The City will not be making an employer contribution at this time.
The proposed Plan is entirely funded by the employee.
Contributions go in on a tax-free basis and are disbursed for qualifying expenditures on a tax-free basis.
If the Plan is accepted, participation is mandatory. In other words, everyone is required to be in the plan year after year.
The proposed Plan has three major components.
A mandatory payroll deduction equal to 1.5% of the employee's annual base salary will be deducted on a pre-tax basis each pay period.
Beginning 01 January 2010 each employee will contribute an amount equal to the value of the first forty (40) hours of accumulated non-FLSA compensatory time that the employee earned during the prior calendar year at the employee's hourly rate at the end of the prior calendar year. Additional restrictions apply. Please refer to attached PDF titled "Final Second Amended Memorandum of Understanding", Section 5 (ii).
The hourly equivalent of ten percent (10%) of the employee's accumulated non-FLSA compensatory time as of 31 December 2008 shall be frozen and moved into the VEBA account in two equal amounts. This is a one time provision at the time the Plan is implemented. Additional restrictions apply. Please refer to attached PDF titled "Final Second Amended Memorandum of Understanding", Section 5 (iii).
Upon the member's termination of employment or retirement, the member may use his/her account assets to pay for qualified health care expenses incurred by the member or his/her dependents. If a member dies without legal dependents, the assets in the account will be treated as investment earnings that shall be allocated to the accounts of all other participants in a non-discriminatory manner. You cannot designate a beneficiary under the Plan. The City will provide all members with the option of purchasing additional group term life insurance separate from the Plan on an employee-pay-all basis. This term life insurance will be provided through Prudential Life Insurance Company.
In the upcoming weeks we will hold informational sessions at the C.P.S.A Office located at 1616 W. Pershing Road. The times of these sessions will be staggered with morning, afternoon and early evening hours so as to provide an opportunity for any member to obtain answers to questions they may have. I will post the dates and times of these sessions on this site as soon as they are scheduled. I will also post a notification when the ballots are mailed out.Once again, please take the time to evaluate this proposed Plan and how it will impact your financial future.
President - CPSA
Please read the above info carefully and make an informed decision.