CODE 10 - BENEFITS TABLE OF CONTENTS. A. Retention and Benefits B. Virginia Retirement System (VRS) C. Richmond Retirement System (RRS)

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1 10.01 RETIREMENT CODE 10 - BENEFITS TABLE OF CONTENTS A. Retention and Benefits B. Virginia Retirement System (VRS) C. Richmond Retirement System (RRS) Disability Retirement A. Regular Disability B. Work-Related Disability Early Retirement Incentive Program VRS Contribution Refunds DEATH BENEFIT GROUP LIFE INSURANCE A. Cost of Insurance B. Continuance of Coverage While on Leave C. Conversion of Group Life Insurance to Individual Insurance INCOME PROTECTION/DISABILITY INSURANCE HEALTH CARE INSURANCE CREDIT UNIONS ANNUITIES A. Availability of Income Protection/Disability Insurance B. School Board Disability Plan A. Enrollment B. Changes C. Intra-City Employees D. Continuance of Coverage While on Leave E. Extended Coverage of Terminated Employees F. Extended Coverage for Family Members G. Out of Pay Status Page 1 of 2

2 CODE 10 - BENEFITS TABLE OF CONTENTS (continued) SCHOOL BOARD INSURANCE A. Boiler Insurance B. Comprehensive General Liability and Property Damage C. School Board Liability (Broad Form) D. Crime Insurance E. Automotive Insurance INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS A. Individual Insurance Policies B Tax Shelter Annuity Programs C. Other Allowable Payroll Deductions Page 2 of 2

3 BENEFITS Code RETIREMENT Employees expecting to retire shall notify the Human Resources Department by February 1 of the year they plan to retire. This will enable the Human Resources Department to facilitate the timely processing of retirement applications as well as the implementation of employee transfers or the hiring for new positions. All regular full-time employees of the school division are covered by the Virginia Retirement System except for those who served under the Richmond City Classified Service prior to July 1, Former classified employees may continue coverage under the Richmond Retirement System (RRS) or transfer to the Virginia Retirement System (VRS). A. Retention of Benefits Retired employees are eligible to retain their medical insurance plan after retirement at rates set by the School Board, pending availability of funds. When an employee retires, life insurance is fully paid on date of retirement. However, coverage begins to decrease at that time at the rate of two (2) percent each month until it reaches one fourth (1/4) of its value. Reimbursement for accumulated vacation credit up to a maximum accumulation of 24-month accrual can be made at retirement. B. Virginia Retirement System (VRS) Under VRS, an employee is eligible to retire with full benefits at age 65 with any number of years service, or at age 55 with 30 years of service. The employee may retire between age 55 and age 65 with less than 30 years service and receive a reduced benefit. Employees have the option of expediting the effective retirement date by using accrued annual leave at their per diem rate and accrued sick leave equal to one-half (1/2) of the daily substitute teacher rate of pay. Benefits are separate and in addition to any benefit received from Social Security or any other retirement plan. (cont.)

4 Code BENEFITS RETIREMENT (continued) B. Virginia Retirement System (VRS continued) An employee shall select one (1) of the following four (4) options: 1. Basic Benefit The employee receives a benefit calculated by the appropriate formula, with a reduction for early retirement, if applicable. If the employee dies before receiving benefits, the amount of his/her accumulated contributions plus interest, the sum remaining in his/her account is paid as a lump sum to his/her designated beneficiary. Once selected, the Basic Benefit cannot be changed. 2. Option 2 (Survivor Option) Under Option 2, the eligible employee receives a benefit that is reduced from the Basic Benefit, depending on the employee's age at retirement and the age of the person the employee designates as his/her contingent annuitant. Upon the employee's death, the same monthly benefit that the employee was receiving would be continued to the employee's contingent annuitant. 3. Option 3 (Survivor Option) Under Option 3, the employee receives a benefit that is higher than the Option 2 benefit. Upon the employee's death, one half (1/2) of the employee's monthly benefit is continued to the employee's contingent annuitant. (cont.)

5 BENEFITS Code RETIREMENT (continued) B. Virginia Retirement System (VRS continued) 4. Option 4 (Leveling Option) Effective January 1, 1994 the Option 4 "Leveling Option" described below shall replace the Option 4 Social Security Option). This option allows the employee to take an advance on his/her VRS benefit and receive a higher payment in the early years of retirement. The employee pays for this advance by receiving a benefit less than the Basic Benefit amount in the later years of retirement. The advance is paid to the employee from the retirement date until the age he/she specifies that he/she wants the advance to stop. The eligible employee may select any age for the advance to stop in one (1) year increments between 59 1/2 years of age and 70 1/2 years of age. The employee shall indicate the amount of advance to be paid to him/her. VRS shall calculate a benefit as close as possible to the dollar amount indicated by the employee. The advance that is received cannot cause the employee's total benefit to be more than the average of his/her three (3) highest years of salary, nor can it reduce the employee's lifetime benefit to less than 50 percent of the amount the employee's Basic Benefit would have been. Under the Leveling Option, cost-of-living increases shall be applied to the Basic Benefit (adjusted for early retirement, if applicable) the employee would have received had he/she not selected the Leveling Option. 5. Adjustments The employee is eligible for a cost-of-living adjustment on July 1 of the second calendar year after retirement. Subject to action by the State Legislature, adjustments may be made yearly thereafter. There is a five (5) percent ceiling on cost-of-living adjustments. (cont.)

6 Code BENEFITS RETIREMENT (continued) C. Richmond Retirement System (RRS) The Richmond Retirement System (RRS) is a noncontributory defined benefit retirement plan which provides pensions for service, early service, non-occupational disability and occupational disability retirement. The system requires five (5) years of service for a member to be vested. 1. Normal retirement age for employees is age 65 with retirement for early service allowed at any time within the 10-year period to the normal retirement date. Employees may retire with 30 years of service at any age with unreduced benefits. 2. At retirement, members may elect to have benefits payable under joint and last survivor and/or level benefit options. 3. Eligible employees for the Richmond Retirement System benefit complete required paperwork in the Richmond Retirement Office, City Hall, 4th floor. Dated 10/5/87 Revised 6/24/97 See: School Board Bylaws and Policies, Section Retirement School Board Bylaws and Policies, Section Retirement/Life Insurance Coverage

7 BENEFITS Code RETIREMENT: DISABILITY RETIREMENT Two (2) types of disability retirement are available to employees under age 65 who are in service or within 90 days of terminating service and who are mentally or physically unable to further perform their duties if such an incapacity is likely to be permanent. A. Regular Disability Regular disability is effective on the first day of employment. The disability allowance is computed using the same formula used for service retirement, but there is no reduction for early retirement. In addition, years of service are increased by using the smaller of twice the actual period of service or the number of years of service the employee would have had if he/she had remained in service until reaching age 60. If the employee is 60 or over, the actual years of credited service are used. B. Work-Related Disability If a disability results from an injury covered by the Virginia Worker's Compensation Act, the employee may apply for disability retirement regardless of years of service. He/she is granted a work-related disability allowance equal to 2/3 of the average final salary when VRS benefits are combined with Worker's Compensation benefits and one half (1/2) of the primary Social Security benefit. In addition, VRS contributions and interest are refunded. Dated 7/18/83

8 Code BENEFITS RETIREMENT: EARLY RETIREMENT INCENTIVE PROGRAM Any School Board employee who is a member of the Virginia Retirement System is eligible to retire under the Early Retirement Incentive Program at any time between age 55 and 64. Early Retirement Incentive Program Guidelines I. Purpose: To provide the early retirement participant with supplemental income until eligible for social security benefits. II. Eligibility Requirements: A. The participant shall be between the ages of but shall not have attained full social security eligibility. B. The participant shall be eligible to retire with VRS/ RRS. Employees on disability status are not eligible for this program. C. The participant shall have 10 years of service with RPS including the five (5) immediately preceding retirement. (cont.)

9 BENEFITS Code RETIREMENT: EARLY RETIREMENT INCENTIVE PROGRAM Early Retirement Incentive Program Guidelines (continued) III. Plan Options: Option A -175 days paid 25 percent for seven (7) years or pro rata allocation based on age of the Participant Option B -175 days paid 35 percent for five (5) years or pro rata allocation based on age of the Participant Option C -105 days paid 35 percent for three (3) years or pro rata allocation based on age of the Participant IV. Payment: Based on one (1) percent per day of final annual compensation. Supplemental income paid in 12 equal installments with no less than 25 percent or more than 35 percent per year of participation depending on option selected. The School Board of the City of Richmond agrees to pay the participant on the 15th day of each calendar month following the month worked. After the participant has completed work commitment under chosen plan option, the participant shall receive monthly payments for the remaining period covered under option selected. V. Assignments: The participant shall continue service in the same or equivalent position (before retirement) in a temporary classification for either one half (1/2) or one (1) school year with work dates to be specified by the Human Resources Department. Minimum work days shall be determined by option selected. The participant shall have no right to School Board fringe benefits. VI. Application Procedure: Employees who wish to participate in the Early Retirement Incentive Program should submit an application to the Human Resources Department at least 60 days prior to the anticipated date of retirement.

10 Code BENEFITS RETIREMENT: EARLY RETIREMENT INCENTIVE PROGRAM Early Retirement Incentive Program Guidelines (continued) VII. Revocability: Participants in the program may either withdraw prior to the effective date of retirement or beginning date of the program, but may not resume full-time employment with School Board after starting participation in the program. VIII. Contracts: Contracts are to be executed with the school year starting July 1, or calendar year January 1, with work date assignments by School Board to coincide with the students first or second semester. This shall create continuity for students and faculty. During the first year or half year, the participant is expected to provide the regular normal duties assigned to the position. IX. Administrators: The program is administered by Richmond Public Schools and the designated insurance company. Dated 7/18/83 See: School Board Bylaws and Policies, Section 7.18C. Retirement Incentive Program

11 BENEFITS Code RETIREMENT: VRS CONTRIBUTION REFUNDS Employees who terminate employment other than by retirement may elect to receive a cash refund from their accumulated personal contributions, plus interest. Effective January 1, 1979, the School Board assumed the responsibility for paying the employee's share of VRS. Contributions made by the School Board on behalf of the employee hired prior to July 1, 1979 are not refunded to the employee for the period from July 1, 1979 to June 30, Employees hired after April 1, 1980 may withdraw all contributions upon termination. If an employee terminates employment after five (5) years of credited service and leaves his/her accumulated contributions in VRS, the employee may retire on deferred annuity when retirement age is reached. Dated 7/18/83 Revised 6/24/97

12 Code BENEFITS DEATH BENEFIT A death benefit is extended to all full-time employees. If an employee with one (1) or more years of creditable service dies in service any time before retirement from a cause not compensable under the Virginia Workers Compensation Act, a benefit of $2,000 shall be paid to the estate of the employee within 90 days after the time of death. Less-than-12-month contracted employees shall be entitled to 12 months credit for each full school year of work. Should death occur during non-working months after a contract for the next session has been executed, the employee's estate shall be entitled to benefits. Dated 7/18/83 Revised 6/24/97 See: School Board Bylaws and Policies, Section Death Benefits

13 BENEFITS Code GROUP LIFE INSURANCE Full-time employees who are enrolled in the City or State retirement systems shall enroll in the group life insurance program. Life insurance is equal to twice the annual compensation of the employee, with double indemnity for accidental death and dismemberment benefits for accidental loss of limbs or eyesight, is provided for employees through age 70. When an employee reaches age 70, the amount of insurance coverage begins to reduce by two (2) percent for each month following the month in which the employee reaches 70 until it reaches one fourth (1/4) of its original value. If an employee retires from service, the amount of coverage reduces at the rate of two (2) percent for each month following the month in which they retire or reach age 70, whichever occurs first, until it reaches one fourth (1/4) of its original value. If an employee retires because of disability, the amount of life insurance shall not begin to reduce until age 65. It then undergoes the same reduction as explained above. In no event shall the amount of an employee s life insurance decrease to less than one fourth (1/4) of the amount to which the reduction was applied. A. Cost of Insurance The employee shares the cost of the insurance premium, which is based on the amount of coverage and is automatically deducted from the first paycheck in each month at the rate determined by the School Board. Premium payments are no longer required when employees reach age 70 or retire, whichever is earlier. B. Continuance of Coverage While on Leave Employees on approved leave of absence may make arrangements to continue life insurance coverage for not more than 24 months by paying the premiums in advance. (cont.)

14 Code BENEFITS GROUP LIFE INSURANCE (continued) C. Conversion of Group Life Insurance to Individual Insurance Except upon retirement, life insurance coverage shall cease 31 days after termination of employment. Therefore, it is important for terminated employees to file the required conversion form with the Human Resources Department before the end of the 31- day period if they wish to retain coverage. Dated 7/18/83 See: School Board Bylaws and Policies, Section Retirement/Life Insurance Coverage

15 BENEFITS Code INCOME PROTECTION/DISABILITY INSURANCE A. Availability of Income Protection/Disability Insurance The School Board, contingent upon the availability of funds, shall provide a disability income protection program to all eligible employees; all full-time employees and regular part-time employees working a minimum of 20 hours per week. All eligible current employees are covered as well as new employees, except for pre-existing medical conditions, when they have worked five (5) continuous days. New employees who are hired with existing medical conditions shall have coverage for pre-existing medical problems once they have worked three (3) consecutive months without treatment for the medical condition or at the point that they have been employed for 12 continuous months. B. School Board Disability Plan The program consists of a short-term and long-term disability plan as described below. 1. Short Term Disability Plan (STD): This plan provides income replacement to employees during their first three (3) months of disability. Employees shall satisfy first a 20 work-day waiting period in which they are totally disabled before benefits shall be paid to them under the STD plan; during this period employees shall depend upon their accrued sick leave. After being out of work and totally disabled for 20 work-days, and provided an employee has exhausted all of his/her available sick leave, he/she is eligible for the STD plan which shall replace an employee's income at 60 percent of his/her base contract salary (Disability income shall be taxable income). 2. Long Term Disability Plan (LTD): Eligible employees may receive long-term disability payments after they have been disabled and earning 80 percent or less of their predisability base contract salary for three (3) calendar months (income protection during these three (3) months may be provided either by accrued sick leave or by the STD plan. (cont.)

16 Code BENEFITS INCOME PROTECTION/DISABILITY INSURANCE (continued) B. School Board Disability Plan (continued) 3. Extended LTD Buy-Up Insurance: Voluntary buy-up long term disability insurance shall be available to all eligible employees, which shall provide income protection to age 65. This is a voluntary group program paid for by employees who purchase the coverage. The buy-up coverage would provide income protection once the five (5) year base plan's benefits were exhausted, and it shall continue to provide the same benefits as are provided under the basis LTD plan. 4. The Office of Insurance and Risk Management and the Human Resources Department shall assist in helping the employee secure his/her disability compensation in a timely manner in order to prevent a break in the employee's pay to which he/she is entitled. Dated 7/18/83 Revised 6/24/97

17 BENEFITS Code HEALTH CARE INSURANCE Health care insurance is available to all full-time employees who have regular or probationary status. Part-time employees who work at least 50 percent of the time also qualify. The premium cost is shared by the employee and the school division. Coverage is not automatic, and an employee shall complete an application and choose the type of coverage desired. The application shall be returned to the Human Resources Department within 31 days of hire. Any employee who does not choose to be covered by the School Board shall sign a waiver of participation form, which shall be returned to the Human Resources Department within 31 days of hire. A. Enrollment B. Changes When an employee completes an application, this shall authorize Richmond Public Schools to deduct the employee portion of the premium from the employee's paycheck. Premium contributions shall vary for spouse or family medical coverage. Health care premiums are pre-paid, and become effective the first of the month, following 30 days of employment. Premiums are deducted in equal amounts from both paychecks each month. Once a health care plan is chosen, an employee is allowed only to make changes in his/her coverage during the Open Enrollment Period, from May 1st through July 31st, held once per year. Exceptions to this rule include "life event" changes only, effective October 1st of that year. ("Life event" changes include marriage, death, birth, divorce or legal separation, adoption, and decrease of family income, etc.) To qualify for a "life event" change, a letter shall be submitted to the Insurance and Risk Management Department. C. Intra-City Employees When both employee and spouse are employed by Richmond Public Schools or the City of Richmond, if the Richmond Public School employee carries the family plan, the School Board shall make an additional premium contribution to the health care coverage. (cont.)

18 Code BENEFITS HEALTH CARE INSURANCE D. Continuance of Coverage While on Leave Employees on approved leave of absence may continue coverage of health and dental care by contacting the Office of Insurance and Risk Management who shall notify them by letter of their (the employees') payment responsibilities for continuing coverage and shall advise them of the payment schedule. E. Extended Coverage for Terminated Employees Employees who terminate their employment, who are terminated for any reason except gross misconduct, or who are changed to temporary or less than 50 percent part-time status have the option of continuing their group coverage for up to 18 months by paying 102 percent of the group rate on a monthly basis. The employee has a maximum of 60 days from the time the"event" occurs or the time they are notified of the extension option, whichever is later, to decide whether or not to continue the coverage. Extended coverage shall cease automatically at the end of the 18-month period. Cancellation of Extended Coverage Extended coverage shall cease for any of the following reasons: 1. The monthly premium is not paid by the due date. 2. The individual becomes covered by another group health care plan (unless there are pre-existing medical conditions) because of new job or marriage. 3. The individual becomes eligible for Medicare. 4. Richmond Public Schools no longer provides health care coverage to any employee. (cont.)

19 BENEFITS Code HEALTH CARE INSURANCE (continued) E. Extended Coverage for Terminated Employees (continued) At the time extended coverage is chosen the employee may continue in the plan in which they are currently enrolled or may change to any other option offered by the School Board. Coverage may also be changed during the Open Enrollment period (May 1st through July 31st). Any changes in benefits or coverage made by Richmond Public Schools in the plans offered its employees shall apply to individuals who have elected continuous coverage. COBRA is the acronym for Consolidated Omnibus Budget Reconciliation Act, legislation which enables employees to continue group health coverage for 18 months when: (1) change from full-time to part-time employment and part-time employees cannot join a health care program; (2) are laid off or discharged (except for gross misconduct); (3) leave work voluntarily for any reason, including retirement. (If a retired employee normally loses eligibility under the retirement program after a certain amount of time, he/she does not have the option to continue group coverage.) F. Extended Coverage for Family Members Family members who lose health insurance coverage because of certain events have the option of extending health care coverage for 36 months by paying 102 percent of the group rate on a monthly basis. Family members qualify for this extended coverage if they are any of the following: 1. the surviving spouse or children of an employee who dies (If the spouse turns down the option, children may elect the coverage.) 2. children of active employees who reach the dependent age limit for coverage under the parent's contract 3. spouse or children who are no longer eligible for coverage because of separation or divorce 4. family members who lose coverage because the employee is eligible for Medicare and chooses Medicare as their primary. It is the responsibility of the employee to notify the Insurance and Risk Management Department when dependents are eligible for extended coverage because of divorce or because a child reaches the dependent age limit.

20 Code BENEFITS HEALTH CARE INSURANCE G. Out of Pay Status Employees on an approved leave of absence (ie. disability, worker's compensation or family medical leave, etc.) may be eligible to continue health care coverage. An employee who is out of pay status, wishing to continue health care coverage shall contact the Insurance and Risk Management Department. Dated 10/5/87 Revised 6/24/97 See: School Board Bylaws and Policies, Section Health Insurance

21 BENEFITS Code CREDIT UNIONS Two (2) credit unions are available to employees of Richmond Public Schools. They are the Richmond Teachers Federal Credit Union and the VaCap Federal Credit Union. Payroll deductions may be made for savings, share drafts, or approved loans. Employees should contact the credit unions directly to arrange for payroll deductions. Dated 7/18/83

22 Code BENEFITS ANNUITIES The School Board has authorized a number of companies to sell taxdeferred annuities to employees of the school division. Earnings may be sheltered from both federal and state taxes through participation in such a plan. A list of these companies is available in the Finance Department. 1. Contracted employees shall be required to sign an amendment to their employment contracts, and all employees shall sign forms required by the annuity company. The company shall notify the Finance Department each month of requests for tax shelter. 2. Federal law permits only one (1) change in the deduction each year. Changes shall be made by contract amendment. Cancellation requests shall be submitted by the employee in writing to the Finance Department in order to stop automatic deduction by the computer. The annuity company should also be notified. 3. The School Board, in making deductions for annuities possible, assumes no responsibility for the annuities. Dated 7/18/83

23 BENEFITS Code SCHOOL BOARD INSURANCE The following types of insurance, which may have application to employees, are carried by the Richmond Public Schools: A. Boiler Insurance Boiler insurance covers all bodily injury and property damage to schools or other property resulting from explosion or breakdown of boilers. Blanket coverage includes repair or replacement of boilers and pressure vessels. B. Comprehensive General Liability and Property Damage This coverage protects Richmond Public Schools or any employee, acting within their scope of duties, who is legally obligated to pay damages. The School Board's property is covered after meeting a $50,000 per occurrence deductible. C. School Board Liability (Broad Form) School Board liability covers wrongful acts or alleged errors or misstatements or acts of omission or neglect or breach of duty in the discharge of duties, individually or collectively. Included are claims arising from busing plans, decentralization programs, labor negotiations, personnel disputes, and use of facilities. D. Crime Insurance Crime insurance covers losses resulting from safe burglary or robbery and attempted threats on monies and securities throughout the school division as well as merchandise in the City and school division warehouse. The deductible is $1,000. Limits for both inside and outside premises occurrences are $50,000. (cont.)

24 Code BENEFITS SCHOOL BOARD INSURANCE (continued) E. Automotive Insurance 1. All division-owned motor vehicles have liability insurance covering claims of damages to property and bodily injury. Other vehicles are covered for excess liability once the automotive insurance limits of the owner's vehicles have been exhausted. 2. Coverage is provided under comprehensive coverage for losses for fire, theft, glass breakage, explosion, etc., guaranteed cost basis. 3. Uninsured motorists insurance is provided on all vehicles. 4. All passenger cars and buses have coverage for payment of medical bills. Dated 7/18/83 Revised 6/24/97 See: Code of Va., Insurance Code of Va., Definitions Code of Va., Applicability of Article Not Dependent Upon Approval of Vehicles or Allocability of State Aid

25 BENEFITS Code INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS The following guidelines shall determine how and when an insurance company may market its products with Richmond Public Schools employees and when the premiums for those products can be paid through payroll deductions. A. Individual Insurance Policies All types of individual insurance policies shall be subject to the following criteria: 1. No more than two (2) insurance companies providing essentially the same type of insurance coverage shall be permitted, at any one (1) time, the privilege of utilizing payroll deduction as a means of collecting insurance premiums. 2. To qualify for payroll deduction, the company shall have written a minimum of 200 policies for Richmond Public School employees. If a third company also reaches the 200 policy mark, the program with the lowest number of enrolled employees shall be dropped from payroll deduction when the third company s number of policies written is 1.5 times that of the program with the lowest number of employees. Those companies already on payroll deduction which are below the minimum policy level have twelve months to reach the 200 policy minimum before being taken off payroll deduction. 3. When a company s program no longer qualifies for payroll deduction, the insurance company shall begin direct billing its policy holders within 60 days of the notification by Richmond Public Schools. (cont.)

26 Code BENEFITS INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS (continued) A. Individual Insurance Policies (continued) 4. Richmond Public Schools shall not approve or disapprove the marketing of a particular insurance company s product to division employees. However, before an insurance company s product can be offered to employees, it shall be reviewed by the internal insurance committee. The marketing representative then may distribute information pamphlets or other information to the various school principals and department directors. 5. It is the policy of Richmond Public Schools not to permit solicitation for any insurance product during working hours. However, the information received in each department from marketing representatives shall be distributed within that department; and, if an employee wishes to learn more about the product, they may contact the company s representative directly. Any violation of this policy provision shall forfeit a company s rights to payroll deduction now or in the future. No employee of Richmond Public Schools has the authority to waive this policy provision. No listing of employees names, addresses, or phone numbers shall be provided any company. 6. Companies interested in marketing their insurance products within the Richmond Public School system currently shall hold a Best s rating of B or better which has been maintained for the past three (3) years. (Best s Insurance Reports Life/Health, A. M. Best Company, Inc.). 7. Insurance programs offered to Richmond Public School employees shall be available to all employees within the division, not just a segment of the employee population. Programs currently not meeting this guideline shall revise their program within 12 months of the effective date of this policy. (cont.)

27 BENEFITS Code INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS (continued) B. Tax Shelter Annuity Programs All tax shelter annuity programs shall be subject to the following criteria for determining when the product can be marketed and subsequently payroll deducted: 1. No more than five (5) companies providing tax shelter annuity programs shall be permitted to offer their programs to school system employees through payroll deductions at any one (1) time; 2. Consideration shall be given only to those new plans which differ significantly in favor of the investor over the other plans currently offered through payroll deduction; 3. The company shall present its tax shelter annuity plan to the internal insurance committee for review. Every three (3) years the insurance committee shall compare other TSA programs with the programs already being offered to employees. Comparisons of the different programs shall be done by reviewing basic criteria relating to each program. The criteria to be analyzed shall be predetermined by listing those categories which are most important to the investor, such as financial stability, administrative charges, investment potential, flexibility, etc. 4. Once a new tax shelter annuity (TSA) is authorized by the internal insurance committee, the appropriate approval shall be sought from the Superintendent and the School Board. 5. When a TSA plan has been fully approved, the company shall be authorized to market it to school system employees through the distribution of marketing information to the various school principals and department directors. Before payroll deduction shall begin, the company shall present to the committee a signed commitment from at least fifty (50) employees indicating that they wish to begin making contributions to the new TSA program. This shall be done within a six-(6) month period of time.

28 Code BENEFITS INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS (continued) B. Tax Shelter Annuity Programs (continued) 6. It is the policy of Richmond Public Schools not to permit solicitation of any tax shelter annuity program during working hours. However, the information received in each department from marketing representatives shall be distributed within that department; and if an employee wishes to learn more about the product, he/she may contact the company s representative directly. Any violation of this policy provision shall forfeit a company s right to payroll deduction now or in the future. No employee of Richmond Public Schools has authority to waive this policy provision. No listing of employee s names, addresses, or phone numbers shall be provided to any company. 7. After the above steps have been completed, the insurance committee shall initiate steps to allow payroll deductions to begin for the new TSA program. Concurrently, notification that its plan is being discontinued shall be given to the company with the current TSA program that, in the judgment of the committee, offers the least favorable program to employees. 8. Once notification has been given that a TSA program shall be discontinued, employees in that program shall have 90 days before their payroll deductions shall stop. Employees may choose to leave their accrued investment with their present company, withdraw their funds from their present company, or transfer their funds into one (1) of the other TSA programs currently available through payroll deduction. 9. Companies interested in marketing their TSA programs with school system employees shall currently hold a Best s rating of A which has been maintained for the past three (3) years. (Best s Insurance Reports Life/Health, A.M. Best Company, Inc.) (cont.) (ALSO SEE CODE ANNUITIES)

29 BENEFITS Code INSURANCE MARKETING AND ALLOWABLE PAYROLL DEDUCTIONS (continued) C. Other Allowable Payroll Deductions Other payroll deductions not related to insurance or TSA programs shall be restricted to those meeting the following criteria: 1. assignments required by federal or state law 2. assignments for an employee s share of the cost of any program designed for the benefit of such employee, which is conducted or sponsored by the School Board and for which the School Board bears a portion of the cost 3. assignments for the purpose of purchasing United States savings bonds 4. assignments for the purpose of subscribing to shares of any credit union consisting only of employees of the City of Richmond, including any of its departments or bureaus and the public schools of the City 5. assignments to charitable institutions and associations to which the School Board is permitted to contribute by law which are of general interest to school employees 6. payment of employee s membership dues to an employee organization which is available to all employees, or for which the Superintendent grants permission The School Board reserves the right to charge an administrative fee to any company whose product or service is purchased by school system employees through the use of employee payroll deductions and for which payment for such product or service is remitted to the company by Richmond Public Schools. Dated 5/2/88