Pennsylvania State Education Association Retiree Benefit Trust

“The pennsylvania state education association (psea) retiree benefit trust permits two alternate members of the governing body (veba committee) to vote in the event of the absence of a regular veba committee member who has not delivered a written proxy for their vote. The alternate members of the veba committee are identified in part vii, section a.”

“The psea vice president serves as a veba committee member along with employees of psea. The 990 instructions for part vi, section a, line 2, define this situation as a "business relationship" between the psea vice president and the other veba committee members. The position of psea vice president was held by aaron f. Chapin. The remaining individuals listed in part vii, section a were employees of psea.”

“The psea retiree benefit trust governing body (veba committee) does not have separate committees with authority to act.”

“A copy of the completed form 990 and related schedules is reviewed by the veba committee. The veba committee also meets with a representative of the accounting firm that prepared the form 990 and related schedules to discuss the content and answer any questions they may have. The final copy is provided to each veba committee member.”

“The conflict of interest policy is reviewed annually. Each veba committee member or other individual delegated powers or fiduciary responsibility for the veba shall annually sign a statement which affirms that they have received, read, and understand the policy. Furthermore that they agree to comply with the policy and they understand that the veba is a tax exempt organization, and in order to maintain its federal exemption it must engage primarily in activities that accomplish its tax exempt purpose. To ensure that the veba operates in a manner consistent with its tax-exempt purpose, periodic reviews shall be conducted. These reviews will serve to ensure that any compensation arrangements entered into by the veba are reasonable, based on competent survey information and the result of arms length bargaining. They will also ensure that any contractual arrangements with third-party administrators conform to the veba's written policies, are properly recorded, reflect reasonable investment or payment, further tax exempt purposes, and do not result in prohibited inurement, impermissible private benefit, or an excess benefit transaction.”

“The psea retiree benefit trust does not directly compensate its officers and veba committee members, however psea, a related organization, has employees who receive compensation and who also serve as veba committee members. The vice president of psea and certain other key employees currently serve on the veba committee. Compensation for key employees, other than the executive director, is set by the personnel committee and then approved by the board of directors. Compensation for the executive director is set by the executive director review committee and then approved by the board of directors. Compensation for key employees, including the executive director, and all management team members is documented in written employment contracts. The salaries for officers, the executive director, and all management team members are based on a differential (or indexed rate) from the highest bargaining unit salary. The process for determining officers and key employees compensation includes a review of comparability data. Comparison data from other nea state affiliates is collected, summarized, and made available to the personnel and executive director review committees for their consideration. The deliberation process and outcome is documented in the human resources confidential files.”

“The governing documents, conflict of interest policy and financial statements are available to the public upon request.”

“The psea vice president, who is also a veba committee member, is on a leave of absence from their school district position while they serve as an officer of psea. Part of their compensation is paid directly by the school district and reimbursed by psea. This part of their total compensation is not reported on part vii as reportable compensation from related organizations since it is not included in the w-2 issued by psea.”

“Transfer of assets from plan -46,467.”

“The veba committee assumes responsibility for oversight of the audit of its financial statements and selection of an independent accountant.”