Common use of VEBA Benefit Clause in Contracts

VEBA Benefit. Upon retirement, thirty-five percent (35%) of an employee's unused sick leave credit accumulation shall be transferred to a VEBA account (as described below) to be used according to Internal Revenue Service (IRS) regulations on the day prior to their retirement. Upon the death of an employee, either by accident or natural causes, twenty-five percent (25%) of such employee's accumulated sick leave credits shall be paid to their designated beneficiary. However, if an employee is eligible for retirement and chooses to vest their funds with the Retirement System at the time they leave City Employment, they will lose all sick leave credit and not be eligible to receive the twenty-five percent (25%) cash out. Employees who are eligible to retire shall participate in a vote administered by the Union to determine if the Voluntary Employee Benefits Association (VEBA) benefit shall be offered to employees who elect to retire. The VEBA benefit allows employees who are eligible to retire from City Service to cash out their unused sick leave balance upon retirement and place it in a VEBA account to be used for post-retirement healthcare costs as allowed under IRS regulations. Eligibility-to-Retire Requirements: 5 – 9 years of service and are age 62 or older 10 – 19 years of service and are age 57 or older 20 – 29 years of service and are age 52 or older 30 years of service and are any age For purposes of identifying all potential eligible-to-retire employees, the City shall create a list of members who are in the City’s HRIS system at age 45 or older and provide this list to the Union so that the Union can administer the vote. If the eligible-to-retire members of the bargaining unit vote to accept the VEBA, then all members of the bargaining unit who retire from City service shall either: Place their sick leave cash out at 35% into their VEBA account, or Forfeit the sick leave cash out altogether. There is no minimum threshold for the sick leave cash out. Members are not eligible to deposit their sick leave cash out into their deferred compensation account or receive cash. If the eligible-to-retire members of the bargaining unit vote to reject the VEBA, all members of the bargaining unit who retire from City service shall be ineligible to place their sick leave cash out into a VEBA account. Instead, these members shall have two choices: Members can cash out their sick leave balance at 35% and deposit those dollars into their deferred compensation account. The annual limits for the deferred compensation contributions as set by the IRS would apply; or Members can cash out their sick leave balance at 25% and receive the dollars as cash on their final paycheck.

VEBA Benefit. Upon retirement, thirty-five percent (35%) of an employee's unused sick leave credit accumulation shall be transferred to a VEBA account (as described below) to be used according to Internal Revenue Service (IRS) regulations on the day prior to their retirement. Upon the death of an employee, either by accident or natural causes, twenty-five percent (25%) of such employee's accumulated sick leave credits shall be paid to their designated beneficiary. However, if an employee is eligible for retirement and chooses to vest their funds with the Retirement System at the time they leave City Employment, they will lose all sick leave credit and not be eligible to receive the twenty-five percent (25%) cash out. Employees who are eligible to retire shall participate in a vote administered by the Union to determine if the Voluntary Employee Benefits Association (VEBA) benefit shall be offered to employees who elect to retire. The VEBA benefit allows employees who are eligible to retire from City Service to cash out their unused sick leave balance upon retirement and place it in a VEBA account to be used for post-retirement healthcare costs as allowed under IRS regulations. Eligibility-to-Retire Requirements: • 5 – 9 years of service and are age 62 or older • 10 – 19 years of service and are age 57 or older • 20 – 29 years of service and are age 52 or older • 30 years of service and are any age For purposes of identifying all potential eligible-to-retire employees, the City shall create a list of members who are in the City’s HRIS system at age 45 or older and provide this list to the Union so that the Union can administer the vote. If the eligible-to-retire members of the bargaining unit vote to accept the VEBA, then all members of the bargaining unit who retire from City service shall either: : a. Place their sick leave cash out at 35% into their VEBA account, or or b. Forfeit the sick leave cash out altogether. There is no minimum threshold for the sick leave cash out. Members are not eligible to deposit their sick leave cash out into their deferred compensation account or receive cash. If the eligible-to-retire members of the bargaining unit vote to reject the VEBA, all members of the bargaining unit who retire from City service shall be ineligible to place their sick leave cash out into a VEBA account. Instead, these members shall have two choices: : 1. Members can cash out their sick leave balance at 35% and deposit those dollars into their deferred compensation account. The annual limits for the deferred compensation contributions as set by the IRS would apply; or or 2. Members can cash out their sick leave balance at 25% and receive the dollars as cash on their final paycheck.