As has been reported in previous Unifiers, the CCASAPE Representative Council is in the process of examining a new 401A retirement plan that will allow participating administrators to shelter up to $40,000 of terminal vacation pay. Participation in the plan will allow administrators to defer paying taxes on the terminal vacation check and to permanently avoid the payment of Medicare taxes on the vacation payoff. Any employee hired after 1986 will pay the Medicare tax on the vacation payoff.

It is important to note that just because CCASAPE is examining this plan, IT DOES NOT MEAN that any final decision regarding participation has been made. Even if the District approves and adopts the 401A plan, ESEA and CCASAPE each reserve the right to agree to participate or to not participate in the adopted plan. Additionally, if CCASAPE determines that it will participate, CCASAPE will also identify the appropriate start date for that participation.

CCASAPE’s goal is to secure sufficient information to make an informed decision. On Wednesday, November 19, 2003, CCASAPE, ESEA, and the District reviewed plans submitted by three vendors. Two of the proposals were eliminated from consideration. Reasons for elimination included insufficient funds currently under management, lack of participant access to financial advisory services, lack of a guarantee for the principal deposit, and the charging of participant fees. The remaining vendor, Bencor, met each of the specifications listed in the request for proposal. Bencor currently has over $421 million under management in 401A plans in 28 states. Additionally, Bencor charges no participant fees for deposits in their fixed accounts, guarantees the principal deposit as long as it remains in a fixed account, and ensures a 2.00% rate of return for deposits in the fixed accounts. Deposits which are placed in variable accounts are not guaranteed by any vendor and are subject to the vacillations of the stock market.

As previously discussed, if the CCASAPE Representative Council votes to participate in the 401A plan, the Internal Revenue Service requires that participation is mandatory for all eligible employees. The IRS stipulates that if an employee has a choice as to whether to shelter the vacation payoff or receive the payoff as taxable income in the final paycheck, participation in the plan is not possible. Mandatory participation means that when eligible administrators retire, they will no longer receive their vacation payoff as part of their final paycheck. Instead, the vacation payoff will be directly placed in the 401A account, deferring the payment of income tax and forever avoiding the payment of the Medicare tax.

There are still critical issues remaining for determining whether CCASAPE will participate in the 401A plan if it is adopted by the District. The first issue centers around the length of time it will take to retrieve the vacation payoff from the account in the event that the administrator does not want to shelter the money. The second issue relates to the utilization of the vacation payoff to purchase retirement credit from PERS. An additional meeting is scheduled for January 21, 2004, to review these and other issues with representatives of the Bencor Company.

If you have questions or concerns regarding mandatory participation of eligible administrators in the 401A retirement plan, please contact Stephen Augspurger at the CCASAPE office at your earliest convenience

Click here to download the survey

During the month of November, all CCASAPE members received a Member Health Insurance Survey. Retirees participating in the CCASAPE Medicare Eligible Health Insurance Plan also received a survey. The survey was specifically developed to elicit information regarding the design of the CCASAPE health benefits plan. As of November 15, 2003, 410 administrators and retirees had returned surveys to the CCASAPE office. This information was analyzed by the CCASAPE staff and then reviewed with the members of the CCASAPE Health Insurance Committee and the Representative Council. Survey results will be used to provide direction in the design of the future health insurance plans for actives and retirees. Members of the 2003-2004 CCASAPE Health Insurance Committee consist of Nancy Alamo, Kathy Foster, Craig Hill, Barbie Holmes, Toby Holmes, Kevin McPartlin, Patricia Schmidt, and Candy Schneider.

As you know, the current medical contract with Sierra Health expires in January of 2005. With the direction provided through the member survey, the CCASAPE staff will begin formal negotiations with Sierra and other interested providers in January of 2004 with the goal of finalizing the new medical benefits contract not later than July 1, 2004.

The CCASAPE staff and members of the CCASAPE Health Insurance Committee appreciate the time and effort of administrators who returned the surveys. Also appreciated were the many written comments regarding the current health insurance plan. These comments resulted in the identification of a number of performance issues which have and will continue to be discussion items with the management at Sierra Health.

Please see insert for the results of the 2003 Member Health Insurance Survey. If you have questions or desire additional information, please contact Allin or Stephen at the CCASAPE office.

Click here to download the 2004 premiums and out-of-pocket expenses chart.

Please see insert for the premiums and out-of- pocket expenses for ACTIVE administrators and their dependents on the CCASAPE / CCSD Health Insurance Plan. Contribution rates for each of the bargaining groups are also listed. The rates listed go into effect on January 1, 2004. Administrators are reminded that the $32 previously negotiated and implemented for health insurance for 2003-2004 will cover the increase in premiums for all administrators and will also cover a portion of the premiums for dependents. Administrators began receiving this $32 increase on their October 10 paycheck.

Article 21-5 of the negotiated agreement between the Clark County Association of School Administrators and Professional-technical Employees and the Clark County School District provides that the District contribute $5.80 per administrator, per month, to the “School Administrators’ Welfare Trust Fund” for health insurance assistance for retired administrators. CCASAPE pays $450.00 annually in January or June to each eligible retired administrator for the first five years following retirement. This January CCASAPE will distribute $48,150.00 to eligible retired administrators for retiree health insurance assistance.

Article 21-8 of the negotiated agreement provides that the District contribute $6.65 per administrator, per month, to the “School Administrators’ Welfare Trust Fund” for unused sick leave reimbursement. Eligible retired administrators receive $10.00 per day for up to 250 days of unused sick leave in either January or June following their retirement from the District. This January CCASAPE will distribute $67,535.00 to eligible retired administrators for unused sick leave.

With the January 2004 payouts, CCASAPE will have paid out a cumulative amount of $829,315.00 in unused sick leave and $601,200.00 in retiree health insurance assistance for a combined total of $1,430,515.00 since these payouts were begun in 1987 and 1990 respectively.