Cost Savings: Cost savings directly benefit every participant in the plan. By pooling the funds, the UFA VEBA can access economies of scale to reduce the plan’ s individual participant expenses and the investment expenses associated with the funds.
Investment Advantages: There is truth in the saying that it takes money to make money. Pooling the funds gives the VEBA Board a much broader pool of investment vehicles to put the trust funds to work for the employees. Funds can be diversified into different instruments that are not available in a self-directed plan and access investments that would not be available to individual investors.
Fiduciary Risk: All trusts that benefit a group like the VEBA are governed by regulatory laws. By pooling the plan, the VEBA Board has been given access to professional money managers and fiduciary specialists who must benefit the employees of the trust before themselves, the department, and the UFA Board. This means every decision is guided not only by the VEBA Board, but also by professionals who have a legal obligation to look out for employees on the VEBA plan.
Outcome Focused vs. Opportunistic Investment Strategy: The pooled funds allow the portfolio to focus on achieving the most consistent returns possible. Unlike an individual retirement account that can focus on the biggest opportunity for gains and take the largest risk of loss; these funds are guided by an investment policy statement designed to outline the appropriate mix of assets to achieve the goal of making sure employees have the funds to support their retirement medical expenses after separation with UFA.
Q: Do employees pay an Administrative Fee?
For employees participating in UFA’ s group health plan or cafeteria plan and retirees participating in UFA’ s group health plan, a $ 0.95 monthly administrative fee is withdrawn from their account.
For employees who do not participate in UFA’ s group health plan or cafeteria plan, as well as for separated employees, a $ 4.00 monthly administrative fee is applied and withdrawn from their account.
Q: If employees still have money in their VEBA account and they pass away, what happens?
An employee’ s spouse or eligible dependents may continue to utilize the VEBA account for tax-free reimbursement of qualifying expenses in the same manner as the employee.
If an employee passes away without a surviving spouse or eligible dependents, any remaining balance in the account will revert to the VEBA Trust for equal redistribution among participants or to offset expenses for the participants, as determined by the Board.
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