FAQ

Question: How do I join the Plan as a participating employer?

Answer:

  1. Request a complete GASB 45 packet from the SISC office, (661) 636-4411, or cisproles@kern.org
  2. Adopt a Board Resolution to authorize participation in the SISC GASB 45 TRUST
  3. Submit a signed Participation Agreement to approve the Trust Agreement
  4. Submit a copy of your district’s actuarial valuation before year end (June 30)

Question: How can I make contributions to the Plan?

Answer:

Districts must submit a completed and signed Contribution Form to SISC. Forms are available at the SISC website: http://sisc.kern.org

All employer contributions made shall be paid to the Trustee for deposit into the Trust Fund in accordance with the terms of the Trust Agreement. Plan assets shall be invested in accordance with the Investment Policy, so as to produce the best returns possible consistent with prudent investment policies and legal requirements.

Question: How do I know how much to contribute to the Plan?

Answer:

Once every two Plan Years, or as otherwise required under GASB 45, each Participating Employer’s actuary will determine the Participating Employer’s Annual Required Contributions (ARC) and Net OPEB Obligation (NOO). Participating Employers may contribute to the Trust Fund an amount equal to the ARC or NOO, or any portion thereof, as determined from time to time by the Participating Employer in its sole discretion, or any other additional amounts for the purpose of funding the payment of Health Insurance for Participants in accordance with this Plan. Contributions of a Participating Employer shall be credited to the Employer Account of such Participating Employers and will be reflected in the quarterly report provided by the Plan Administrator. The method of determining the amount of contributions shall be established solely by each Participating Employer.

Question: How are my contributions invested?

Answer:

All investments must comply with the SISC GASB 45 TRUST Investment Policy. The investment platform will be modeled after the SISC Defined Benefit Plan (DBP) platform. This platform has been in place for over three years, has a proven track record and consists of a balanced portfolio of equities, fixed income and liquid investments. A sufficient cash reserve will be maintained in a high yielding money market fund with 24 hour liquidity to facilitate cash flow needs of the participating member districts.

Similar to the DBP, the portfolio will consist of a balanced approach and blend of fixed income securities (bonds) and equities (stocks). The goal will be to maintain an approximate balance of 60% equity and 40% fixed income. The Plan Administrator has hired the same firm that manages the DBP investments, Wachovia Securities LLC, to handle the SISC GASB 45 Trust portfolio. SISC will maintain individual employer accounts; however funds are pooled for investment purposes only.

Question: What fees apply to participating employers?

Answer:

Investment costs incurred by the Trust will be deducted each quarter. Fees include:

a. Administrative fees – SISC Districts 0.05% of portfolio value
b. Administrative fees – Non-SISC 0.10% of portfolio value
c. Trustee fees – 0.05% of portfolio value

Please contact the SISC Finance Dept for full explanations and disclosures of all investment related fees and expenses.

Question: How do I know what assets I have invested in the Plan?

Answer:

SISC will provide a quarterly report to Participating Employers indicating the value of the assets of the individual Employer Account for each Participating Employer, including investment income of such assets. Within 60 days from the end of a quarter, the SISC office will provide an unaudited Account Summary to each Participating Employer. An audited statement will follow from the accounting firm selected to perform the audit. Additionally, by adopting an irrevocable trust, your office will greatly reduce the audit disclosures required. You will receive quarterly statements and an annual audited financial statement to assist you with GASB 45 reporting requirements.

Question: What benefits are payable from the Plan?

Answer:

Benefits under this Plan shall be limited to payment of the cost of Health Insurance for a Participant, or other eligible retiree costs. The Plan Administrator may require evidence that eligible retiree costs have been incurred before benefit payment under this Plan may be made to any post-employment health plan of a Participating Employer or reimbursed to a Participant. Payments from the Plan are restricted to fully-insured and self-funded retiree health plans that provide medical care.

A Participant shall be eligible for benefits under this Plan based solely on the Participant’s status as a current and/or future retiree of a Participating Employer, or other individual, who, by criteria of the Participating Employer is eligible for post-employment Health Insurance benefits. The Participating Employer determines who is eligible for retiree health benefits.

Question: How do I get money out of the Plan to pay for those benefits?

Answer:

Participating Employers must submit a Disbursement Request to SISC for payment of eligible retiree benefits. Payments under this Plan shall be made only for eligible retiree costs on behalf of Plan Participants. The Plan Administrator and Trustee shall be permitted to rely on the written direction of the Participating Employer. The Participating Employer represents, warrants and understands that any disbursement shall be made solely for purposes of post-employment Health Insurance benefits as described in the SISC GASB 45 TRUST. The Plan Administrator and/or Trustee may, in its sole discretion, inspect any documentation and/or circumstances surrounding any such distribution. Refer to the Investment Guidelines for various disbursement scenarios and required support documentation.

Keep in mind that this is an irrevocable trust – monies paid into the trust cannot be reverted back to employers.

Question: What if I no longer want to participate in the Plan?

Answer:

It is the intention that this Plan and Trust Fund shall be maintained indefinitely. However, Participating Employers reserve the right at any time or times to discontinue employer contributions to any extent in their sole judgment. The Participating Employer’s failure to contribute to the Trust Fund in any Plan Year will not discontinue the Plan or Trust Fund.

Participating Employers may obtain the transfer of assets from this Trust Fund only in accordance with the Trust Agreement. Such a removal may not be initiated for a date effective prior to the end of any Plan Year that is on or after the third anniversary of the Participating Employer’s entry date into the Plan.

In addition, the Trustee shall retain such assets for the Participants of said Participating Employer pursuant to the provisions of this Trust Agreement until such time that the Participating Employer provides evidence of direct transfer of the Participating Employer’s assets into another tax-exempt vehicle wherein the transferred assets are dedicated solely to the payment of Health Insurance to or on behalf of Participants. No assets of the Trust Fund shall be distributed to the Participating Employer, or to any person or entity under the control of such Participating Employer; and the assets must remain dedicated to the payment of Health Insurance for Participants in another tax-exempt vehicle.

Rev. 7-7-06