Contributions To And Benefit Payments From Retiree Healthcare Plan Assets

Apr 30, 2024 | Other Post-Employment Benefits

Tags | OPEB
Contributions To And Benefit Payments From Retiree Healthcare Plan Assets

Many Retiree Healthcare (Other Post-Employment Benefit or OPEB) plan sponsors have established OPEB trusts to pre-fund future benefit payments for retirees. As these funds have accumulated substantial sums, plan sponsors are now considering payment strategies from those funds. 

Plan sponsors often have questions about the best time to use money from the OPEB trust to pay benefits, what it means for a plan to be 100% funded, and what is a good spend-down approach if the plan is closed to future hires/participants. They also wonder if the annual recommended contribution to the trust matters and how to coordinate or reconcile any recommended contribution with annual benefit payments.

Each month we’ll look at one of those questions beginning next month with a response to the question: What does it mean that a plan is 100% funded?

Stay tuned.

Christian Veenstra, ASA, FCA, MAAA, EA

President, Watkins Ross

Watkins Ross is a 100% Employee-Owned Consulting, Actuarial & Administrative Firm Providing Retirement Plan Services

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