Oct 17, 2017 - Non-Voting. â CA Dan Carey, APA President. â Mike Knoerr, APA Benefits Director. â Misty Leon, Bene
BRAB Report Fall 2017 BOD
BRAB Members (APA PM 4.08) • Voting – FO Steve Conlon – CA Kerry Burklow – CA Mike MacMurdy
• Non-Voting – CA Dan Carey, APA President – Mike Knoerr, APA Benefits Director – Misty Leon, Benefits Attorney (Wilkins, Finston, Friedman)
October 17, 2017
BRAB - Benefits Department
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Benefits Department • Mike Knoerr
Director of Benefits
• Joanne Goldfarb
Mgr. Pension & Disability Plans
• Marcy Scott
Mgr. Life and Health Plans
• Gayla Coffelt
Benefits Compliance Analyst
• Melba Campbell
Benefits Coordinator
• Toni Cooper
Benefits Coordinator
• Heather Whiteman
Administrative Assistant
October 17, 2017
BRAB - Benefits Department
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APA Benefit Plans • SMP • LIFE • SCB • RHBP • Segal
October 17, 2017
Voluntary Supplemental Medical Grandfathered & Enhanced Life Insurance Staff Custodial Care Benefit Retiree Health Benefit Plan Benefits/Actuarial Consultants
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Today’s Topics • • • • •
SMP Open Enrollment Update Enhanced Life Insurance Additional Dividend Enhanced Life Insurance Maximum Benefit Staff Custodial Care Benefit Termination (Closed Session)
October 17, 2017
BRAB - Benefits Department
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SMP Open Enrollment Update • Open Enrollment Period Oct. 1-Nov. 30 2017 – Eligible APA members • Age 55 and older during OE period • Missed deadline (re-enrollment, add dependent, etc.)
– Coverage for Members enrolling during OE effective January 1, 2018 (contributions begin December 2017)
• Electronic enrollment using Benefit Elect • Back-contribution calculator operational
October 17, 2017
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SMP Open Enrollment Update • • • • •
Under 55 can enroll anytime using normal procedures Periodic reminders via APA News Digest APA Benefits and WebTPA available for questions FAQs posted to website 700+ pilots have enrolled as of COB Oct. 16
October 17, 2017
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Benefits Enrollment & Changes Effective 1/1/2018
• Benefit Elect providing website with link on APA website • All future enrollments, benefit changes, and terminations to be accomplished via website – Increase/decrease benefit levels, add/delete dependent, terminate plan participation • Real-time benefits display to replace annual benefits statement
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Additional Dividend
• Background – 2015 Enhanced Life Insurance reserve surplus of $13.2 Million – R 2015-38 Rev. 1, the APA Board approved an Additional Dividend of $10 Million payable in three installments which ended in 2017 for certain participants in the APA Enhanced Life Insurance
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Additional Dividend • The Plan’s reserves continue to generate a surplus. – $10,075,000 as of December 31, 2016
• Reserves are held in a special account with MetLife – Guaranteed interest rate that changes each calendar year • 4.26% for 2017 • restricts the amount that can be withdrawn during a calendar year to 10% of the balance of such account as of the beginning of the year
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Additional Dividend
• RECOMMENDATION – The BRAB recommends distribution of an additional dividend not to exceed 10% of the reserves in the special account to the same group and using the same distribution methodology that was used for the previous Additional Dividend and that such distribution should occur as soon as administratively feasible in 2018 upon approval by the Board of Directors
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Additional Dividend
• ACTION REQUIRED – R2017-42 Life Insurance Enhanced Additional Dividend
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Increased Maximum Benefit • Background – Some pilots have requested a higher life insurance amount than the current $1 million available under the Enhanced Coverage
• Met Life has offered to increase the maximum benefit level from $1 million to $1.5 million – Segal has reviewed their proposal and believes it to be financially supportable
• Cost of coverage (rate per $1000 of benefit) unchanged – monthly contribution would increase due to the higher amount of insurance for those selecting the higher amount October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Increased Maximum Benefit • Met Life has also offered to increase the guaranteed issue amount of insurance (without requiring underwriting) available to a new member – pilot within the first 12 months of hire as a pilot for American Airlines – increase from $100,000 to $150,000
• Met Life is adding coverage for burns and felonious assault to the Voluntary Accidental Death & Dismemberment (AD & D) coverage
October 17, 2017
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Enhanced Life Insurance Increased Maximum Benefit
• RECOMMENDATION: – The BRAB recommends that the Board adopt MetLife’s proposal to increase the maximum Enhanced Coverage amount for active pilots to $1,500,000, to increase the guaranteed issue amount available to new members, and to add coverage for burns and felonious assault to the Voluntary AD & D coverage, effective January 1, 2018
October 17, 2017
BRAB - Benefits Department
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Enhanced Life Insurance Increased Maximum Benefit
• ACTION REQUIRED – R2017-43 Term Life Insurance Improvements Enhanced Coverage
October 17, 2017
BRAB - Benefits Department
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Staff Custodial Care Benefit (SCB) Plan Termination – The SCB was part of the APA Custodial Care Benefit Coverage (“CCB”) and was frozen to new participants effective July 1, 2001. – Effective January 1, 2015, the staff who were participating and a proportional share of the assets were transferred from the CCB to the SCB as part of the RHBP as a result of the negotiations with the staff union. – The SCB started the year with 7 participants but now there are has 3 participants (2 employees/retirees and one dependent)
October 17, 2017
BRAB - Benefits Department
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Staff Custodial Care Benefit (SCB) Plan Termination – No participant is collecting a benefit, but all are paying an annual contribution of $250/individual – During 2016, the SCB paid its service providers $1,580.66 in fees – As of August 31, 2017, the SCB has assets totaling approximately $100,790.
October 17, 2017
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Staff Custodial Care Benefit (SCB) Plan Termination – The BRAB considered several options including insuring this coverage, converting to an HRA, allowing the plan to continue or terminating the plan. – RECOMMENDATION: the BRAB recommends that the SCB be terminated and that the assets be distributed to the remaining participants upon termination based on a ratio of the contributions made during their participation.
October 17, 2017
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Staff Custodial Care Benefit Plan Termination
• ACTION REQUIRED – R2017-55 Staff Custodial Care Benefit RHBP
October 17, 2017
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Questions
October 17, 2017
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Closed Session • • • • • • •
National Officers APA BOD BRAB Retirement and Benefits Committee Benefits Dept. ERISA and General Counsel APA Legal October 17, 2017
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