Part 3: Contributions to and benefit payments from Retiree Healthcare Plan Assets – If the recommended contribution is $-0-, may benefits be paid from the OPEB plan trust?

Jun 28, 2024 | Other Post-Employment Benefits

Tags | OPEB
Part 3: Contributions to and benefit payments from Retiree Healthcare Plan Assets - If the recommended contribution is $-0-, may benefits be paid from the OPEB plan trust?

If you have been following this series, you will recall that we are looking at a series of questions intended to assist in making decisions about funding retiree Healthcare Plan aka OPEB plans.  This week we consider the question:

If the recommended contribution is $-0-, may benefits be paid from the OPEB plan trust?

Yes.

It is important to be aware of the types of investments held in the OPEB trust.  Unless a portion of assets are already in a checking or other readily liquid account, if assets are not readily liquid – that is, not easily available from which to pay retiree healthcare benefits – care must be used when taking assets from the plan. Unrealized losses can quickly become realized if liquidating in a down market.

Consult with your investment advisor to establish a strategy for paying benefits from plan assets. Changes in the investment strategy could result in lower-than-expected returns on investments that could impact the funded status of the plan and could require additional funding. 

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