Registration is now open for the 2022 Deputy Sheriffs' Memorial Golf Tournament

by David Schaller

The following article represents recommendations from the RMT Board and not the DSA Board.

It seems like we just started, but the San Diego County Public Safety Retiree Medical Trust (RMT) is now six years old. We started with nothing and currently have a pooled account balance of $16, 518,7561. This last year was great for the stock market and our plan was no exception, earning just shy of 20% for the year. We started January 1, 2019 with $11,346,490.18*, so we’ve added nearly $5.2 million to the pool in just over a year!

For members who have joined us since the inception of the RMT, we are a locally-controlled member plan, directed by appointed members of the DSA, District Attorney Investigators, Probation Officers, and Probation Supervisors. We have five board members. I sit as the chair of the board, we have trust counsel, and the plan is administered by Gallagher Benefit Services, who also administers all the County’s non-Kaiser health benefit plans. We are locally controlled by active County employees and can customize our plan to best fit our members’ needs, quickly and efficiently.

As of last year, all original members are now vested for lifetime benefits, and we have employees retiring and utilizing the plan to offset their retiree healthcare expenses.

One of the options in our plan, which can be put into place with a simple vote of the members, is the ability to cash out unused vacation time into the trust at time of retirement. This accomplishes two things. First, it allows the plan participant to make a one-time purchase of Active Service Units (ASUs), which means they can significantly increase their monthly benefit.

Second, because the money is transferred to the RMT pre-tax, it protects the member from the tax liability that would consume up to a third of the payout if they were to take it in cash. The deposit also earns interest tax-free and when the money is used for qualified medical expenses, it is withdrawn tax-free. That’s right, no tax liability on any end. I’m not aware of any other such investment.

The Sheriff’s Management (SM) group has already elected to do this, and one of the recent retirees was excited to learn he could cover most of his monthly healthcare premium using his monthly RMT benefit.

For the first few years of the plan, we closely watched the administrative costs of the plan. We were in an equity-building period, and only a few short-service members were exhausting their individual accounts. Over the years, I have heard valid complaints about the website, but at the time, it didn’t make sense to pay for a more robust site, when so few members were even making claims.

We now have two years of vested members entering retirement, and the RMT board recognizes the time has come to spend the money on a more robust online platform; enter Health Invest HRA.

We are in the process of migrating to this new system, which is still managed by Gallagher, but is a far superior product than what is currently in place. This new plan will significantly improve members’ ability to access timely information.


Options to pay or file claims:
Previously, members submitted written claim forms and receipts. Moving forward, retired members will have the option of filing online claims using their computer, tablet, or smartphone. Retired members will also have the option of simply paying for out-of-pocket costs utilizing their RMT debit card. The fee will be paid with no further action needed.


Retiree member-directed investment of unused benefit funds:
Another added feature is member-directed investment of their unused monthly payout. For instance: Deputy Smith retires and takes another job and with healthcare benefits, so there is no need to use any or all of their RMT monthly benefit. Currently, the money accumulates in an individual account, but no interest is earned.

With the new plan, the member can choose from 13 member-directed investment options, further building their pool of available money when the need arises to utilize the benefit.


Increased access to account information for active employees:
For the active employee, the new member portal provides all the information members have asked for, including monitoring accrued Active Service Units, the member can track their current contribution amount, and see a record of their deposits. The front page also includes a projected retirement amount, which allows for customization by entering an anticipated retirement date. This information can also be accessed from a computer, tablet, or smartphone app.


Moving forward, how to maximize your retiree health benefit:
Though there was skepticism from some members, we now have retired members receiving significant monthly benefits utilizing the plan. The RMT board recommends the following plan changes to best build the benefit plan to provide an even better member benefit moving forward:

– Increase the bi-weekly contributions. We started this plan six years ago, and the DS group, which includes sheriff’s lieutenants, sergeants, and deputies, have never voted to increase the contribution from the original $25 per pay period contribution. If we never increase this benefit, a 25-year employee will only receive a benefit of around $2,700 per year.

By comparison, sheriff’s management, which includes captains, commanders are raising their bi-weekly contribution to $175 effective June 19, 2020 and are raising it again to $200 next year! With their contribution and vacation cash out, they are on track to receive a retiree healthcare benefit of about $10,000 or more per year.

An increase to $50 or even $75 will have a negligible impact because the money comes out pre-tax. Look at what we have done and think of the impact we could make if we doubled or tripled our contribution. This can be done at any time with a majority vote of the DS membership.

Vote to roll over some portion, or preferably all unused vacation balance, into RMT at time of separation. This protects the retiring member from a huge tax burden and makes a significant impact on the final lifetime monthly benefit.

The RMT plan is a COBRA-eligible benefit plan, which means you can elect to contribute to the plan for an additional 18 months at time of retirement. This is accomplished by the member making a one-time payment, or continued payments for an additional 18 months’ worth of plan contributions.


The RMT board is excited about these changes, which we expect to be in place later this summer.
In closing, this a relatively new benefit plan. Before RMT, we had no retirement healthcare for our members. The easiest way to think about the RMT is as a 401k plan for your retirement healthcare costs. Just like a 401k, the final benefit is entirely dependent on sufficient savings accumulating interest earnings over a period of many years. If utilized correctly, our plan can make a significant impact in helping to manage our collective retirement healthcare costs.


* As of RMT board meeting, held February 18, 2020