PROBLEM:

Many school, city, and county employers pay unused sick leave, vacation pay, or other early-retirement incentives. If these benefits are paid as wages, the employer must pay all wage-related costs, including FICA (Social Security and Medicare) tax. Additionally, after income withholding and FICA tax, the participant receives only a portion of the full benefit, and the value of the early-retirement incentive is diminished.

SOLUTION:

A contribution into an HRA or Special Pay Plan can save taxes for both the employer and the participant. This increases the value of the benefit, which may help employees afford retirement.

• Retiree payouts for sick leave, buyouts, and incentives – HRA or Special Pay Plan
• 415 Excess Trust

PROBLEM:

Often school, city, and county employers have 403(b)/457(b)/401(a) plans in place with many different vendors. Because of the number of vendors, it can become difficult to monitor and maintain compliance.

SOLUTION:

By using our TPA, compliance is more simplified because it removes the burden from the employer. Our TPA can also help organizations reduce down to one vendor if that is desired.

• TPA Compliance Services for 403(b), 401(a), and 457(b)
• Single vendor employer-sponsored plan for 403(b), 401(a), and 457(b)
• FICA alternative 3121 Plan

PROBLEM:

Keeping retirees on an employer’s health insurance plan can significantly increase premiums, not to mention the administrative burden. Also, due to cost increases, schools, cities, and counties who offer retiree health insurance are finding their plans unsustainable over the long term, and may be accumulating large unfunded OPEB (Other Post Employment Benefit) liabilities.

SOLUTION:

By moving to a defined contribution plan, new hires can be provided with an annual contribution to an HRA that they can use in retirement for health insurance and expenses. This plan reduces the employers’ unfunded liability. If paid during active employment and combined with a vesting schedule, this plan can be a powerful retention tool. An HRA will also allow early retirees to gain the flexibility to choose their insurance provider. NIS provides retiree education to assist them with their new choices.

• Payments in lieu of retiree health insurance using a Retiree-Only HRA
• Defined contribution plan using a Retiree-Only HRA
• Health Insurance Exchange Assistance
• Post-Employment Benefit Trust