Page 2 Defined Contribution LOSAPs Page 3 Can-Am Police Fire Games Page 3 ESO Consolidation Pages 4-5 Understanding the Importance of Beneficiary Designations and Wills Page 6 Important Information for Windows XP and Internet Explorer 8 Users Published by BENEFITSNEWS Vol. 14 No. 2 Benefits that Make a Difference Annual Valuation Call For Defined Benefit LOSAPs A new service was recently implemented for the purpose of educating our Defined Benefit LOSAP agents and clients. After completion of the annual valuation reports, the Glatfelter Specialty Benefits (GSB) representative that is dedicated to servicing the LOSAP will extend an offer to the agent and/or designated point of contact for the LOSAP to participate in a conference call. During this call, the GSB representative will discuss key items regarding the current status of the LOSAP such as: Items of importance that occurred during the year. Any changes or updates that the actuary suggests are necessary and how these suggestions could influence the Emergency Service Organization budget. The plan s funding progress. An overview of the plan s financial activity from the prior year. Anyone affiliated with the LOSAP is welcome to participate in the call. Based upon feedback, most perceive this to be a valuable addition to our service model. We look forward to further enhancing our relationship with you by providing this service. page 1
Defined Contribution LOSAPs In many communities, Emergency Service Organizations (ESO) are staffed by volunteers. As a result, retention of experienced ESO volunteers is vital to the well-being of the community. Have you considered a length of service award program (LOSAP) as a way to reward the volunteers who consistently show up to support your ESO? A well designed LOSAP can deliver a meaningful financial reward to volunteers who tirelessly serve the community. Using a LOSAP (Plan) as the vehicle to provide your volunteers with a monetary reward alleviates possible conflicts with the minimum wage and overtime requirements outlined by the Fair Labor Standards Act. 1 How does a defined contribution LOSAP work? Annually, the LOSAP Sponsor makes a contribution to the Plan on behalf of each active volunteer. While there is significant flexibility in the amount contributed, a minimum annual contribution of $300 per volunteer is recommended. Participant benefits grow by way of regular annual contributions plus accumulated interest. Benefits become payable at the time and form outlined by the Plan document. Typically, Sponsors will specify that benefits are only available at retirement age to maximize the benefits of tax deferral and compound interest. How are LOSAP contributions invested? GSB uses a Fixed Group Annuity Contract (GAC) as the primary investment vehicle for all LOSAPs. Advantages of the VFIS GAC include: Guarantee of principal and accumulated interest. Minimum annual return of 3%. No exposure to investment market fluctuation. Penalty free withdrawals to pay benefit distributions. If your organization is considering a LOSAP, we have experienced professionals who can help. For more information, contact Glatfelter Specialty Benefits at benefits@glatfelters.com or (800) 233-1957. 1 http://www.dol.gov/whd/opinion/flsa/2006/2006_08_07_28_flsa.htm page 2
YORK COUNTY, PENNSYLVANIA JULY 13-20 VFIS is proud to be a sponsor of the 2014 Can-Am Police-Fire Games. This year s events are scheduled to take place in York County, PA on July 13-20. The games will feature a wide variety of traditional sporting events, as well as a host of professionspecific events. We would like to encourage you to join other fire and EMS workers, along with police and corrections personnel from across the United States and Canada for this exciting competition. Proceeds from this event will benefit the Make-A- Wish Foundation of Greater PA and Southern WV. For more information, please visit www.yorkcanamgames.com. ESO Consolidation As budgets are squeezed, municipalities search for ways to stretch resources while continuing to provide essential services. This has made Emergency Service Organization (ESO) consolidation a hot topic. While combining departments may seem like the logical solution to making scarce resources go farther, it is important to remember that the most valuable resource of any ESO is the people who respond to the emergencies in the community. Volunteers are the life blood of today s ESO. Maintaining an atmosphere of camaraderie is not easy during consolidation. There may be competition and power struggles. Volunteers may feel a sense of loss due to leadership or cultural differences, not to mention the need to acclimate to new surroundings and meet differing expectations. Consider a Length of Service Awards Program (LOSAP) to build cohesiveness among the ranks of the consolidated ESO. A LOSAP is an effective retention tool as it encourages seasoned volunteers to continue serving, while also proving effective in recruiting new volunteers. Through the development of a superior point system that imparts the best practices of each ESO, the LOSAP (working in cooperation with the point system) can serve for to additional level the playing information field among all volunteers. The point system can serve as the motivator to get volunteers to activities that will help them acclimate to their new environment. Further, the financial thank you that a LOSAP offers will reiterate how much volunteers are appreciated. 1-888-858-YORK(9675) page 3 www.yorkcanamgames.com or York County Convention & Visitors Bureau email us at CanAm@yorkpa.org
Understanding the Importance of Beneficiary Designations and Wills By Dave Wyrwas, President Glatfelter Specialty Benefits VFIS and Glatfelter Specialty Benefits provide a number of products that include death benefits for emergency responders. These programs include Accident and Sickness (A&S, which provides line of duty benefits and optional 24-Hour AD&D benefits), Group Life, LOSAP, Critical Illness and other specialty accident programs. It is common practice to ask the emergency responder to complete a beneficiary form. Typically, a member will name a Primary Beneficiary who receives benefits in the event of the member s death. At times the member will name a Contingent Beneficiary to receive benefits if the Primary Beneficiary dies before the member. Usually these beneficiary designations are kept on file at the Emergency Service Organization. A beneficiary card should be completed for each policy to avoid any complications when benefits are paid. VFIS ardently encourages updating beneficiary forms whenever there is a change in the member s life such as marriage, divorce, children, widowed, etc. An updated beneficiary form ensures the death benefit goes to the person designated. We also encourage the review of beneficiary designations on any personal or employer provided insurance. page 4 Here are some common mistakes with beneficiary designations: 1. Naming Minor Children Life insurance benefits cannot be paid directly to a minor. Absent a trust or other legal arrangements, the court will appoint a guardian which may entail significant costs. Additionally, the court could name someone as guardian who may not be the choice of the family. It is important to seek legal advice to develop a will, set up a trust, and name an adult custodian for life insurance proceeds under the Uniform Transfers to Minors Act. 2. Naming Special Needs Dependents This could put the loved one at risk of losing eligibility for government assistance. Anyone who receives a gift or inheritance of more than a certain amount is disqualified for Supplemental Social Security Income and Medicaid. Seeking legal advice to establish an appropriate trust is prudent in these cases. 3. Personal Wills The named beneficiary in a life insurance policy takes precedence over the provisions of a will. Life insurance is a stand-alone contract with the proceeds paid to the beneficiary listed on the individual life policy or on the beneficiary form on file with the policyholder in the case of most Group policies such as Accident and Sickness or Group Term. Continued on page 5
Beneficiary Designations and Wills Continued from page 4 4. Outdated Beneficiary Forms Forgetting to update forms is very common. Updates are needed every time there is a life-changing event. Otherwise, a long forgotten friend or distant relative could receive a death benefit instead of the spouse or preferred beneficiary. 5. General Designations It is important to be specific. Designating my children without listing names and Social Security numbers could lead to a delay while time is spent researching to verify proper identification. However, being too specific might exclude future children and will require updating your beneficiary designation. A traditional beneficiary designation might state to all my children, in equal shares. 6. Contingent Beneficiaries Not naming a Contingent Beneficiary is problematic. Many married people name their spouse as beneficiary and don t name a Contingent Beneficiary. If the couple is travelling together and dies in a common accident, who would receive the insurance benefit? Without a Contingent Beneficiary, either the state or the insurance policy provisions will determine who receives the benefit. 7. Parents as Beneficiaries Naming a parent who is in a nursing home that might be paid for by Medicaid could lead to any proceeds of the insurance policy going to the state. Wills for Heroes programs provide essential legal documents free of charge to our nation s first responders, including wills, living wills, and powers of attorney. By helping first responders plan now, they ensure their family's legal affairs are in order before a tragedy hits. e 501(c)(3) charitable non-profit Wills for Heroes Foundation supports these Wills programs, giving back to the community and "protecting those who protect us." With any special situation, it is prudent to seek legal advice. Generally speaking, a review of beneficiary designations should be part of the overall will drafting or estate planning process. However, it is shocking how many people don t have a will! According to an article in USA Today, 71% of adults under age 34 and 41% of aging baby boomers do not have a will. The reasons stated are: expense; they believe they do not have many assets; or simply procrastinating. Without a will, state laws determine who receives property. With a will, assets are passed to selected heirs. In my travels, I ve noticed that many states use the services of an organization called Wills for Heroes. Their stated purpose is: Wills for Heroes programs provide essential legal documents free of charge to our nation s first responders, including wills, living wills, and powers of attorney. By helping first responders plan now, they ensure their family's legal affairs are in order before a tragedy hits. The 501(c)(3) charitable non-profit Wills for Heroes Foundation supports these Wills programs, giving back to the community and "protecting those who protect us." In our state, the program is co-sponsored by the Pennsylvania Bar Association's Young Lawyers Division. The service is staffed by lawyer volunteers and is conveniently offered to first responders at meeting halls and police and fire stations. While I haven t personally worked with this program, I have heard positive feedback from departments who have used this service to draft a will and other necessary legal documents. Contact the State Bar Association or State Firefighters Association to see if Wills for Heroes is active in a specific area. I urge everyone to review your beneficiary designations, work with legal counsel, and be mindful of changes in your personal situation. As emergency responders, you continually plan for the unexpected. Shouldn t you use the same strategy for your personal situation? page 5
Important Information for Windows XP and Internet Explorer 8 Users If you are currently using Microsoft Windows XP and/or Internet Explorer 8 for Internet browsing, read on! For the past 12 years, Microsoft has provided technical support for users of Windows XP and Internet Explorer 8. However, Microsoft (along with its hardware and software partners) recently discontinued technical support for these programs and redirected available resources toward the support of more current offerings along with the development of new products. As software and hardware manufacturers continue to roll out new gadgets that are compatible with current Microsoft applications, the number of technological devices that work with Windows XP will no doubt dwindle. Discontinuance of technical support includes certain automatic updates that help protect computers from viruses and other breaches in security. Windows XP users have two options to ensure that computers and the information contained in them remain secure: ˇ UPGRADE YOUR SOFTWARE. As of today, the most recent version of Windows is 8.1. Microsoft suggests that you download and run the Windows Upgrade Assistant to determine if your computer meets the system requirements for Windows 8. (Many older computers do not.) If so, the upgrade contains a tutorial that will walk you through the process. Windows 8.1 system requirements are nearly identical to the requirements for Windows 8. If your computer can run Windows 8, in most cases you can upgrade to Windows 8.1 for free. For more detailed information visit www.microsoft.com. ˇ PURCHASE A NEW COMPUTER. Glatfelter Specialty Benefits actively promotes the use of electronic communication. We do this in an effort to share information in the most expedient manner possible and to protect your privacy. We encourage you to perform regular maintenance on your computer(s) to ensure that there is no interruption in the flow of information or an undue breach of confidential data. Follow us on: page 6 Writers for this edition of Benefits News include: David Wyrwas (President, Glatfelter Specialty Benefits) Lorie Arnold (Assistant Manager, Glatfelter Specialty Benefits) Erik Knopp (LOSAP Pension Administrator) Carissa Cheshire (Group Products Administrator) Stephanie Sutton (LOSAP Administrative Coordinator) Thoughts or comments regarding this newsletter? Please direct them to Stephanie Sutton at ssutton@vfis.com.