INTRODUCTION / MEMO
to the
EMPLOYEE ACCOUNT INITIAL ENROLLMENT PACKET

MARCH 24, 2010

 

Participant:

 

Website links at the bottom to this cover memo, you will find an “Informational Bulletin” and a “Portfolio Selection Form” regarding the assets credited to your Employee Account in the PORAC Retiree Medical Trust.  It is important that you read the Bulletin, and then please choose one of the options and return the Portfolio Selection Form in the enclosed envelope, postmarked NO LATER THAN 30 DAYS AFTER THE DATE OF THIS MEMO. 

 

If you do not return the Portfolio Selection Form within 30 days, the assets credited to your Employee Account will be invested in the default selection – Money Market Portfolio. After making your initial investment selection, you may change your investment selection once a year during open enrollment. This is your chance to have an impact on the investment of your Employee Account.

 

Background:  The PORAC Retiree Medical Trust.  The PORAC Retiree Medical Trust was set up as a tax-favored way of saving a portion of your sick leave cash-out on retirement.1  The Trust administrator maintains an individual recordkeeping account in your name, which is called your “Employee Account,” and the administrator records the sick leave contributions made on your behalf to the Trust.  These mandatory contributions (of sick leave) are made pursuant to a provision in your labor agreement. 

 

Investment of Your Employee Account.  The Board of Trustees of the PORAC Retiree Medical Trust, in consultation with the Board’s professional investment manager, has developed the following choices for investment of your Employee Account:

 

1. Money Market Portfolio – this investment option has the lowest volatility, and has the lowest expected return in the long-term.

 

2. Bond Portfolio – this investment option has a higher expected return than the Money Market Portfolio, but is a more conservative choice than the Pooled Portfolio, which offers a blended stock/bond make-up (see #3 below).

 

3. Pooled Stock/Bond Portfolio – this investment option is the riskiest option, but has the highest expected return.  Generally, assets in this Portfolio are allocated 60% to equities (i.e., stocks) and 40% to fixed income (i.e., bonds and cash).  

 

Enclosed Informational Material.  The Board of Trustees of the PORAC Retiree Medical Trust want you to fully understand your options; enclosed please find an Informational Bulletin explaining your investment options, along with a Selection Form.  The Board is made up of public safety officers from participating Associations of PORAC. 

 

Please carefully review the enclosed materials to make an informed decision.  You may also want to seek assistance from your personal accountant or investment manager to make an informed decision, in light of your personal circumstances. 

 

Trust participants with questions about the Selection Form can call the Trust Administrator, Cindi Forbes, at (800) 700-6762.   

 

Regards,

Earl Titman, Novato PMA
Chairman, Board of Trustees
PORAC Retiree Medical Trust

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 Links:

• Informational Bulletin

• Download Form (Portfolio Selection Form)

 

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1 Members of participating bargaining groups have also been deferring part of salary into the Trust on a monthly basis pursuant to your MOU.  These amounts are held in a pooled account, invested by the Trustees.