ON THIS EPISODE: We discuss a benefit available to all UFA employees upon reaching eligibility requirements.
UFA is proposing to the Board a 2% addition to all VEBA accounts for eligible employees, which will create 212 new accounts for employees now added to this benefit. This 2% will give everyone the start to a VEBA account until meeting the requirement to reach the sick leave cap to begin investing.
UFA and the employees of UFA own a Voluntary Employees Beneficiary Association (VEBA) plan, managed through Wells Fargo. This is an account UFA contributes funds into, and then that account can be used by employees once they separate employment, usually when they retire, resign, or leave for any other reason. These funds can be used for medical expenses and operates a lot like a FLEX plan, but is for post retirement/post employment.
On average, Firefighters in Utah hire around age 27 and stay for about 27 years, which puts them at 54 come retirement. Since they don't qualify for Medicare for another 11 years, VEBA can fill that gap for medical expense coverage.
One of the key advantages when investing in a VEBA account is the money is always tax free. It goes into the account, accrues earnings and is reimbursed without being taxed. Though it is restricted to medical expenses, it is a great asset to employees for their future planning.
More information is available on our website and in our benefit booklet.