Tax-Advantaged Retiree Health Funding
The Signature (401Rx) Retiree Health Plansm offers Employers the opportunity to design a personalized Retiree Health Plan to match their primary business objectives. Employers select from an “a la carte” menu to design a benefit package that can be as unique as their Signature. Meaningful benefits that may be pre-funded include- Long Term Care, Medicare, Dental, Vision and other welfare benefits.
Once the Employer has determined the type of benefits to be offered to their Employer, the maximum funding amount is then actuarially calculated. This process determines the amount an Employer should contribute on an annual basis in order to meet the targeted funding amount. The funding amount is subject to change annually based on such factors as attrition, inflation and investment earnings. In addition, the Employer is not required to contribute the full amount, but instead uses it as guideline when considering how much fund. In lean years, the Employer may even elect to not contribute at all. The Signature Plansm must be offered for all employees on a non-discriminatory basis. Employers may, however, limit participation by excluding employees who are:
- Covered by a collective bargaining agreement;
- Under age 25;
- Have less than three years credited service;
- Seasonal, temporary or part time.
Employers always retain the ability to amend, modify or terminate participation in the Plan, however, plan assets may not revert back to the Employer and instead must be available to all participating employees for qualifying medical expenses.