MERP Overview

Medical Expense Reimbursement Plan



Welcome to the Medical Expense Reimbursement Plan of the FOP Fort Pitt Lodge No. 1 Retiree Medical Trust.

OVERVIEW

Medical Expense Reimbursement Plan

Welcome to the Medical Expense Reimbursement Plan of the FOP

Fort Pitt Lodge No. 1 Retiree Medical Trust.

Understanding the MERP

The Medical Expense Reimbursement Plan (MERP) of the Fraternal Order of Police Fort Pitt Lodge No. 1 Retiree Medical Trust was established in 2019 as a 501(c)(9) tax-exempt union sponsored plan.  The MERP is a Voluntary Employees’ Beneficiary Association (“VEBA”) Retiree Medical Trust designed to provide a tax-free lifetime benefit in a highly tax-advantaged manner to offset the inevitable medical and other long-term healthcare expenses all police officers will face.  Governed by police officer fiduciary Trustees with professional service providers, the Plan is available to officers hired on or after January 1, 2005, who serve 20 years as FOP members.

VIEW LIFETIME BENEFIT ELIGIBILITY

Monthly, Lifetime Reimbursement

The Plan is designed to provide monthly, lifetime  reimbursement payments toward qualified premiums and medical expenses of Eligible Retirees of the City of Pittsburgh Bureau of Police (“Bureau”) upon meeting eligibility requirements. Eligibility for monthly, lifetime benefits under the Plan is generally open to any member of Lodge No. 1 who meets all of the requirements set forth in the “Lifetime Benefit Eligibility” section of this page.

*The Plan is designed to provide monthly reimbursement benefits to Eligible Retirees until death. However, benefits from the Trust are not vested; the Trustees reserve the right to modify and/or terminate benefits as necessary to preserve the financial soundness of the Trust.

Funding the Plan

The Plan is funded pursuant to the collectively bargained Memoranda of Agreement (“MOAs”), and applicable successor agreements, between the FOP Lodge No. 1 and the City of Pittsburgh. 


All contributions into the Plan are bargained by Lodge No. 1 and paid by the City.  The City’s contributions are not taxable income for Plan participants.  Under certain limited circumstances, Beneficiaries may make COBRA self-payment contributions.


Contributions are received by and held in trust by the Trust and are invested with the assistance of a professional investment manager, utilizing investment policies and methods consistent with objectives of this Plan and Employee Retirement Income Security Act of 1974 (ERISA) requirements.

Monthly Benefit Levels

An Eligible Retiree’s monthly “Benefit Level” is calculated by multiplying the Eligible Retiree’s total number of Active Service Units (earned during employment) by the Unit Multiplier in effect on the date of the Eligible Retiree’s retirement from employment with the Bureau. This is the maximum amount of reimbursement the Eligible Retiree may receive per month.

ACTIVE SERVICE UNITS

An Employee earns Active Service Units during each month that contributions are made to the Trust on his/her behalf. Each monthly contribution of $25 earns the Employee one Active Service Unit. For example, if contributions of $50 per month are made to the Trust on your behalf, you are earning two (2) Active Service Units per month or twenty-four (24) per year.

UNIT MULTIPLIER

The Unit Multiplier is a variable amount periodically set by the Trustees with the help of a professional actuary. The Unit Multiplier is based on an actuarial study of demographic and financial factors related to the Plan. The current Unit Multiplier is $0.16.

Lifetime Benefit Eligibility

In order to become an Eligible Retiree entitled to receive lifetime monthly benefits under the Plan, you must meet the following requirements:

  • Earn twenty (20) years of Active Service (generally this means 20 years of full-time employment in a classification represented by the FOP Lodge No. 1); 
  • Contributions were made to the Trust on your behalf for all years of Active Service after commencement of contribution to the Plan started by the Pittsburgh Bureau of Police;
  • Stop working for the Bureau of Police, and remain unemployed by the Bureau;
  • Attain age 50;
  • Retire from employment with the Bureau, and become eligible for retirement benefits under the City’s retirement plan (including a medical retiree).

It is the intent of the Trustees to administer the Plan so that benefits for an Eligible Retiree will last for his or her lifetime. However, this is not guaranteed. The Trustees have the authority to reduce or terminate benefits earlier, if prudent, to preserve the financial soundness of the Plan.

SUMMARY PLAN DESCRIPTION
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