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VEBA / HRA Administration Services An innovative new alternative from BPAS
VEBA / HRA Administration ServicesAn innovative new alternative from BPAS
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Why would employers adopt a VEBA / HRA program? To help employees prepare for their financial
needs in retirement (post-retirement health care costs)
A vehicle into which unused sick or vacation pay can be deposited -- providing future benefits to employees while encouraging maximum work attendance
To round out an overall benefits package (consistent with the cafeteria plan philosophy, providing employee choice)
A valuable offset when benefit, compensation or other corporate programs are being modified
Reinforces the notion that preparing for retirement is a shared undertaking
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What is the traditional approach to VEBA / HRA Administration ?Most firms who vie in this space are traditional
cafeteria plan administrators• Monthly valuations and monthly trading• Weekly HRA claim payment processing, manual process for
incoming data• Limited web access for participants and plan sponsor• Most involve multiple firms to provide complete solution• “Not using technology built for the 2013 marketplace”
Why is this an issue? • Client needs and expectations have changed• Demand for state-of-the-art features and technology• Experience from daily valued DC plans has raised the bar (daily
valuation / real time account access)• Desire to automate activity, use “do it yourself” technology• Interest in participant direction of investments• With coming changes to health care landscape, we expect more
employers to adopt VEBA / HRA programs
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How is BPAS uniquely qualified to fill this void?
Broad expertise covering all facets of retirement plans and employee benefits (established business in both cafeteria benefit plan and DC/ DB retirement plans)
Proven track record in Flexible Benefit Plan administration
Vertically integrated model is perfect solution for the VEBA / HRA model
• BPAS acts as daily valuation recordkeeper, administrator, clearing firm and custodian within a single organization (extremely rare in the industry)
• BPAS has in-house investment advisory group
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BPAS – Firm overview
National provider of employee benefit plan administration and consulting services
Wholly-owned subsidiary of Community Bank System, Inc. (NYSE: CBU)
Solution for all types of participant account engagements
– Servicing over 2,500 accounts and 250,000 participants in total
– Engagements from 10 to over 10,000 total employeesApproximately 230 employees in total (parent company
has 2,200)Annualized revenues approximately $32 million BPAS offices located in Manhattan, Houston,
Philadelphia, Pittsburgh, Chicago, Syracuse and Utica
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BPAS’ corporate structure
- Regional Bank
DC Plan Administration
Institutional Trust Company(Member NSCC)Co-Fiduciary ServicesManchester AdvisorsHand Securities (BD)
Actuarial and Benefit Consulting Practice(formerly PWC)
Community Bank, N.A.
Community Bank, N.A.
Community Bank System, Inc. (NYSE: CBU)Community Bank System, Inc. (NYSE: CBU)
Section 125HRA
BPABPA HB&THB&T HarbridgeHarbridge FlexCorpFlexCorp
Benefit Plans Administrative Services, Inc.(BPAS)
Benefit Plans Administrative Services, Inc.(BPAS)
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Program Highlights
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The big picture – How does the program work?
Flex Corp
BPA
Incoming data files
Contribution funds
24 hour web access
BPAS
Quarterly statements
Online claims submission24 hour web access
Mutual fund Families
HB&T
Claims paymentsDaily interaction with service team
Employer Participants
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How accounts are established
BPAS: recordkeeper, NSCC clearing firm and trustee / custodian within a single organization (vertical integration)
We use Sungard OmniPlus as a recordkeeping system and as a trust / custodial system
We use Bemas PayDirect for HRA claims adjudication and claim payments
We establish a single “plan” on Omni for the VEBA / HRA
This plan holds individual participant records -- leveraging the technology that was created for DC plans, including omnibus trading, income / dividends, and reconcilement
24 hour web access for clients and the trustee, same day trading across funds, all funds trade no load
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What it means for a participant
Amounts are deposited to the VEBA / HRA account on periodic basis (initially to a default fund)
Ability to monitor and manage account on 24-hour basis through website
Investments are participant-directed among a range of no-load funds
Quarterly statements
Customer Service Center support for participants
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Servicing the plan sponsor’s needs
Single point of contact – the Client Consultant
Education – BPAS maintains several affiliations such as ASPPA, IFEBP, NIPA, and EBIA that provide continuing education , regulatory and compliance updates that we communicate to our plan sponsors
Annual plan survey – Provides a key feedback loop for plan sponsors to evaluate our services as a whole and performance of key personnel assigned to their account
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The workflow for new contributions
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Plan sponsor uploads file intoCensusPro
BPA reviews file, sends email to client instructing them to log onto CensusProand approve ACHverification.
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Plan Sponsor
Plan sponsor logs onto CensusPro, reviews /
approves ACH verification3
Plan Sponsor
Plan sponsor logs onto CensusPro, reviews /
approves ACH verification3
Plan Sponsor
Plan sponsor logs onto CensusPro, reviews /
approves ACH verification
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3
Trustee
Client logs onto CensusPro, reviews /
approves ACH verification4
If approved by 3:30 PM EST, BPA initiates mutual fund purchases at that evening’s prices. If after 3:30 PM EST, purchases
made on next business day.
5The next morning, clients see trades
reflected in their account. BPAS ‘ACH pulls’required funds from Trustee the next
business day.
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Program flowchart
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Various website features
Account inquiry
Investment elections/ Reallocate account balance
Interactive banner messaging
Fund fact sheets and prospectuses
Online statements
Statement on demand capabilities
Plan level branding
On-line claim submission
Claims history – status of claims and claim history
Plan documents
Pertinent forms
Educational material
Legislative information
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Excerpts from client website. Site provides banner messaging capabilities for the plan sponsor and much more.
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Assisting participants through our Call Center
CSR
CSRCSR
CSR
CSR
CSR
CSRCSR
• All calls recorded and archived• ‘Next available routing’ across multiple offices• If queue exists, approximate hold time is provided• Option to hang up, receive immediate callback when next CSR becomes available• Translator line covers approximately 100 additional languages• Current team hours: 8:30 AM – 6:30 PM EST• Email and voicemail available 24 / 365
CSR Team ManagerCSR Team Manager instant management reports real-time reporting of:
incoming call volume number of calls on hold average hold time call abandonment rate individual CSR performance
can add additional CSRs to queue at any time based on volume
ideal system for managing, training individual CSRs
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The workflow for claims / disbursements
Claim submission options
–Online / Fax / Mail
To ensure IRS compliance, 100% of claim requests are substantiated
Claim reimbursement options
–Direct deposit / manual check
Daily claims adjudication and processing of claim payments
All funds fully invested until claims are processed
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The investment platform
We will help each client develop an investment menu, similar to a 401(k) plan (money market, fixed income, equity, etc)
Broad universe of fund families available on BPAS open architecture platform (over 230 fund families presently)
All funds operate no-load with same day trading
Institutional share classes
Equitable handling of fees
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Investment Advisory Services – Manchester AdvisorsCreation, review and maintenance of an Investment
Policy Statement (IPS) to outline the plan’s overall investment goals and monitor standards
Quarterly investment performance monitoring
Investment reporting services
Quarterly monitoring report measuring investment options against IPS
Annual formal review process that highlights recommendations for additions, deletions and replacements
Able to serve in a 3(21) fiduciary capacity
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Summary of Benefits
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Summary of Benefits
Vertically integrated “total solution” offers the greatest level of accountability, which is a major advantage versus competitor programs where as many as three or four firms may be involved in basic service delivery
Use of technology to streamline administration, eliminate paperwork, reduce work for Human Resources
True open architecture on investments – This eliminates any conflicts of interest in fund review, fund monitoring and participant education process (a key focus of proposed fee disclosure regulations)
BPAS brings state-of-the-art features to the VEBA / HRA space
To obtain a proposal or additional information, please contact:
Dave Ritchie
425-330-5990
