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Retiree Helps Act

The Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act was signed into law on August 17, 2006 as part of the Pension Protection Act of 2006. The HELPS Retirees Act takes effect on January 1, 2007 and will allow a yearly disbursement of up to $3,000 pre-tax from a governmental defined benefit pension, 403(b) or 457 plan to retired public safety officers for use toward health care insurance premiums. The disbursements, which will be made directly to insurance and health care providers, will be tax-free. Prior to the HELPS Retirees Act, when retirees paid for their health insurance premium, it was paid with out of their pockets with after-tax dollars. Beginning in January 1, 2007, eligible public safety retirees will be able to use pre-tax dollars from their qualified pension plans to pay for insurance premiums. If you are in the 28 percent federal marginal tax rate bracket, this could be a tax savings credit on their Adjusted Gross Annual Income of up to $840 per year! This special tax exclusion must be elected by each retiree. Therefore, APRS has derived an election form for each retiree to sign in order to authorize the Austin Police Retirement System to send their health insurance premium withholding directly to the insurance provider so that they can take advantage of this tax exclusion. This form consists of two pages. The first page is the actual election form to participate in this program. The second form is a set of Disclosures and Disclaimers that are designed to protect the pension plan from any unforeseen law suits that may arise from this election. While APRS must take certain steps to protect its staff, advisors and the health insurance providers, we believe that this program will be beneficial to all our retirees and we encourage retirees to sign the election forms and return them in the self addressed envelop enclosed prior to the year-end. Any questions regarding this new tax exclusion can be directed to Stephanie Willie, Assistant Pension Administrator or Michelle Waller, Benefit Services Specialist at (512) 416-7672.

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