What kind of service does Penflex, Inc. provide?
Penflex provides comprehensive consulting, establishment and administration services for Length of Service Award Programs (LOSAPs).
What is a LOSAP?
It's a simple, pension-like plan intended to help recruit and retain volunteers. LOSAPs are similar to pension plans in which volunteers are paid cash service awards at the entitlement age.
What is the entitlement age?
The entitlement age is usually 55-67 years of age depending on the type of program. Depending on what kind of programs are available in your state, there are many variations. To an extent, you can custom design your LOSAP.
How much does it cost to have a LOSAP?
Program costs can range from $200 per year member to as much as $2,000 per year per member depending on what each fire department can afford.
How much does it cost to hire Penflex, Inc.?¸
Penflex Inc. works strictly on a fee basis so that volunteer organizations can reap the maximum benefits from their investment. We receive no compensation from the investment of the LOSAP assets.
Does Penflex work with insurance companies?
Yes. Our primary goal is to put together the best package that will assist in your efforts to recruit, retain and reward volunteers. Therefore Penflex Inc. is happy to work with any existing insurance companies. After ten years of specializing in LOSAPs, Penflex strongly advocates an organization that carefully chooses what kind of insurance it offers and how that will work in conjunction with your custom-designed LOSAP. In some cases, life insurance and annuity-funded LOSAPs have less money in its trust fund than you expect. The reason is that some of the funds were used to pay the premiums on individual life insurance policies, commissions, etc. These numbers can be easily calculated.
Does Penflex choose your investment firm?
No. Penflex is a third party administrator, meaning we do not dictate investment partners. In the event that the organization would like some direction on what investment company to choose, Penflex, Inc. has a long list of reputable companies such as UBS Financial Services, Glens Falls National, RBC Dain Rauscher, etc. Penflex is also happy to add clients to this list. Again, we receive no compensation from the investments of LOSAP assets.
What is the difference between a defined benefit and a defined
contribution plan?
A defined benefit (DB) plan is chosen when an organization wants to pick the exact benefit once a volunteer reaches the entitlement age. A defined contribution (DC) plan is one that dictates the amount invested each month.
How much do LOSAP laws vary from state to state?
Some states such as New York, New Jersey and Wisconsin have enacted State legislation setting forth the allowable provisions, which may be included in a local municipal-funded Service Award Program. Other states (like Pennsylvania, Maryland, and Michigan) have no such legislation which means that in these states volunteer organizations and local municipalities have a lot of latitude when creating their program rules.
Please call Penflex, Inc. if you need more information on the rules in your state and if you are interested in finding out more about how LOSAPS can help you help recruit, retain and reward your volunteers.
