Electrical Workers' Veba Trust

“During the Board of Trustees meeting on June 15, 2023, the Board discovered a possible discrepancy in billing rates for short term disability (STD) and long term disability (LTD) premiums paid to the insurer. Further investigation revealed that the Trust overpaid STD and LTD premiums due to a miscommunication from another plan service provider regarding the applicable rates. The overpayment totaled $351,646.14 over the period from August 2019 through January 2024 (the overpaid premiums as of December 31, 2023 totaled $289,421.86). The entire amount of the overpaid premiums of $351,656.14 was refunded by the insurer to the Trust on May 31, 2024. The Trust calculated lost earnings and interest on this amount to be $39,993.04 using the U.S. Department of Labor's VFCP calculator. In order to restore lost earnings and interest, the insurer has agreed to a discount of $0.01 per hour worked on the LTD premiums from February 1, 2024 through January 31, 2025. Premiums are calculated and paid based on hours worked by plan participants. Using 2023 hours worked as the basis for a projection, this should result in a premium offset of $44,000 (4,452,451 hours times $0.01 = $44,524.51). The total estimated discounted premiums of approximately $44,000 significantly exceeds the $39,993.04 of lost earnings and interest. To ensure the proper payment of STD and LTD premiums, and administration fees, which are all based upon hours worked by participants, corrective actions were immediately implemented. The insurer is now required to provide rate information in its quarterly report to the Board of Trustees. Additionally, a contract was executed between the broker who partners with the insurer and the Trust to outline the broker's responsibilities for the reporting of premium rates to the Board of Trustees and all service providers. The third-party administrator's invoices will likewise begin reporting more detailed premium information.”

“The Trust is administered by an eight-member Board of Trustees. IBEW Locals 77, 125, 483, and 659 appoint four trustees on behalf of the represented employees. The Northwest Line Constructor's Chapter of the National Electrical Contractors Association appoints four trustees on behalf of the participating employers.”

“The Trust auditor annually prepares an initial draft of the Form 990 and provides a copy of the draft via e-mail to the Trust's legal counsel and plan consultant for review. Any review comments are considered, discussed and incorporated as necessary. The Trust's auditor then presents the audited financial statements and updated draft Form 990 during a regularly scheduled Trustee meeting prior to filing the Form 990 with the IRS. During the Trustee meeting, the Trustees consider and review the Trust auditor's presentation. The Trustees may: approve for filing the Form 990 as presented; approve for filing the Form 990 with specified changes; or not approve the Form 990 for filing. Any discussions and decisions are documented in the meeting minutes. Upon confirmation that the Board of Trustees has approved the Form 990 filing, the Trust auditor files the Form 990 in accordance with IRS instructions. The plan consultant maintains final copies of the Trust's Form 990 and supporting audited financial statements in accordance with the Trust's Document Retention and Destruction Policy.”

“A party in interest is under continuing obligation to disclose any financial, personal or professional interest to the Board of Trustees as soon as it is known or suspected. The interested party is given the opportunity to disclose all material facts regarding a financial, personal, or professional interest to the Trustees when considering a proposed transaction, agreement, or arrangement that may implicate that financial, personal, or professional interest. To ensure that the Trust operates in a manner consistent with its purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic (at least annual) reviews are conducted. These periodic reviews include: Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm's length negotiation; Whether partnerships, joint ventures, and arrangements with other organizations conform to written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further the Trust's purposes, and do not result in inurement, impermissible private benefit or in an excess benefit transaction; and Whether any transaction conducted by the Trust during the review period involves or could possibly give rise to a conflict of interest. In connection with such review, each interested party will complete an annual questionnaire which will include (1) acknowledgement by such person or entity that they have read and understand the Trust's Conflict of Interest Policy and (2) disclosure of such person's or entity's knowledge regarding their or any other interested person's financial, personal, or professional interest of and any other potential or perceived conflict of interest.”

“The Trust's governing documents, conflict of interest policy and Form 990 are available to the general public upon written request sent to the Trust at: Gallagher Benefit Services, Inc., 221 N Wall Street, Suite 201, Spokane, WA 99201.”

“None of the members of the Board of Trustees are compensated by the organization. The Board of Trustees is composed of eight individuals, four of whom are representatives of participating employers and four of whom are representatives of participating local unions. The Trustees serve on a volunteer basis and receive no known specifically stated compensation from their employers or any other party for their services on the Board. The Trust does not readily have access to information related to compensation paid by other entities to the Trustees.”