Length of Service Award Program (LOSAP)

The JF Group atMorgan Stanley

80 STATE STREET, 12TH FLALBANY, NY 12207

518-427-5524 / MAIN

800-541-0601 / TOLL-FREE 518-463-1354 / FAX

https://fa.morganstanley.com/sal-vagniandforkeutis/

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Frank Salvagni - First Vice PresidentFinancial Advisor - GES

N. Jeanne Forkeutis - Associate Vice PresidentFinancial Advisor – GES

We both have the Government Entity Specialist designa-tion which allows us service and solicit clients defined asGovernment Entity by the firm.

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Engaging in business with U.S.Government Entities is ahighly regulated activity. WM employees who engage in busi-ness with U.S. Government Entities on behalf of the Firm arerequired to comply with various laws and regulations, includ-ing but not limited to, federal pay-to-play rules, state andmunicipal lobbying laws, and municipal advisor regulations.

3THE JF GROUP

Meet the Professionals

4 MORGAN STANLEY

Frank Salvagni 12 years LOSAP experience

6 years at Morgan Stanley

Jeanne Forkeutis 18 years LOSAP experience

6 years at Morgan Stanley

We manage both Defined Benefit and Defined

Contribution plans for Fire Districts, Villages and

Towns. Additionally, due to our size and flexibility we

develop and manage customized portfolios for each

client and do not rely on an in house model. We are

committed to proactively making changes as needed and

to always keep our costs low.

5THE JF GROUP

N. Jeanne ForkeutisGovernment Entity SpecialistAssociate Vice PresidentFinancial Advisor

PPrrooffeessssiioonnaall EExxppeerriieennccee::Morgan Stanley

Associate VP 11/10 to presentUBS Financial Services, Inc.

Account VP 03/98 to 11/10LLiicceennsseess::Series 7, General Securities Rep.Series 31, Managed Futures Rep.Series 63, Uniform Securities State LawSeries 65, Investment Advisor Rep.Life, Health Insurance and Annuities LicensedNMLS # 1312664PPeerrssoonnaall && CCoommmmuunniittyy::Resides in North Greenbush withhusband, Paul and our two children, Lindsey and Nicholas.Volunteered with the local chapter of the Girl Scouts of NENY: troopleader for 10 years and service unit treasurer. Past Vice Chairman for the Industries for the Blind of New York State; Board Member from 2006 to 2014. Industries for the Blind is a non-profit corp-oration that provides meaningfulemployment to the blind and visually impaired.

6 MORGAN STANLEY

Frank SalvagniGovernment Entity SpecialistFirst Vice PresidentFinancial Advisor

PPrrooffeessssiioonnaall EExxppeerriieennccee::Morgan Stanley

First Vice President 11/10 to present

UBS Financial Svs Inc. VP of Investments06/04 to 11/10

A.G. Edwards & Sons VP of Investments 04/96 to 06/04

EEdduuccaattiioonn::M.B.A. Samford University, 1978B.S. Finance, Siena College, 1971LLiicceennsseess::Series 7, General Securities Rep.Series 63, Uniform SecuritiesState LawSeries 66, Uniform RegisteredInvestment AdvisorLife, Health Insurance and Annuities LicensedNMLS # 1433361PPeerrssoonnaall && CCoommmmuunniittyyMarried for 33 years to CathySiena College Alumni Assoc.Lake George Assoc.

These plans fall under InternalRevenue Code 457, they need to meettwo criteria; they must be bona-fidevolunteers and the annual contribu-tion for any person cannot exceed$3,000.[1] These plans are most help-ful with retention of volunteers andreduce the cost of turnover. With eachturnover that occurs the cost istwofold: first you lose experiencedfirefighters and second they need topay for training and equipment forthe new member.[2]

WWhhoo ccaann eessttaabblliisshh aa LLOOSSAAPP??Programs are established by a spon-soring agency, which is the governingbody of a municipality or fire district.In New York State the New York StateGeneral Municipal Law (GML)Article 11.A Service Award Programsallows municipalities and fire dis-tricts to establish and maintain aLength of Service Award Program(LOSAP). When a fire district ormunicipality sponsors a LOSAP, offi-cials are required to establish a pointsystem that complies with GMLArticle 11.A. The point system speci-fies how points toward LOSAP serv-ice credit will be earned by volun-teers. GML establishes the activitiesthat can be included in the point sys-tem.[3]

AAddmmiinniissttrraattiioonn ooff tthhee PPllaannThe sponsoring agency and theAdministrator/TPA (TThird PPartyAAdministrator of your choosing) enterinto an agreement. The Administratorshall prepare a single program docu-ment setting forth the obligations ofthe sponsor, the rights of the partici-pants and the standard and procedurefor the administration of the plan.The Administrator shall fully admin-ister the program, including prepar-ing all necessary forms, compiles andretain records, prepare and distributereports and program summaries,record and process contributionsmade by sponsors and record andprocess distributions of serviceawards and tax reporting forms.

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A LOSAP can be structured as aDefined Benefit (DB) or a DefinedContribution (DC) plan.

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With a DB plan, LOSAP provides life-time monthly income payment oncepayments once a volunteer reachescertain entitlement age, usuallybetween 55 and 65. Ten years of

Length of Service AwardProgram

8 MORGAN STANLEY

monthly payments (total 120) to par-ticipant (if the participant does notlive for the 10 year period the balancewill be paid to the beneficiary).Participants who are paid 120 month-ly while they are alive will continue tobe paid monthly for their lifetime,however no payments will be made tobeneficiary after participant dies. Thesize of the “pension” is a function ofthe number of years a member volun-teers.[4]

Death Benefit- there is sometimes aminimum pre-entitlement death ben-efit of $10,000.[5]

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In the case of the DC plan, the LOSAPsponsor contributes an amount eachyear into the program trust fund. Theprogram sponsor invests the amountscontributed. When the firefighterreaches entitlement age, he or she ispaid a lump sum equal to the amountsthat were contributed plus invest-ment earnings.[6]

Death Benefit - the benefit is usuallythe actuarial value of the participantsaccrued service award at death.[7]

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Under both plans the plan sponsorcontributes an annual amount to acentral fund for each qualifying vol-unteer. The program trust assets aregenerally in a pooled sponsor-direct-ed account for the benefit of the vol-unteers. The program trustee shallhold the assets of the program intrust; receive and process contribu-tions: invest assets of the trust: annu-ally determine fair market value of thetrust: make payments to program par-ticipants and provide timely informa-tion to enable the Administrator toprepare annual reports, statementsand tax reporting forms.[8]

[1] IRC Section 457(e)[2] U.S. Fire AdministrationRetention and Recruitment for theVolunteer Emergency ServicesChallenges and Solutions FA-310/May 2007[3] NYS Gen.Mun.Law Article 11-A[4] NYS GML Article 11-A § 219[5] NYS GML Article 11-A §219[6] NYS GML Article 11-A §218[7] NYS GML Article 11-A §218[8] NYS GML Article 11-A §219-A

9THE JF GROUP

We are dedicated to providing the plan sponsor with thestrategies and resources that can assist you in achieving theLength of Service Award Program (LOSAP) goals in today'schanging financial environment. We manage both DefinedBenefit (DB) and Defined Contribution (DC) plans for FireDistricts, Villages and Towns.

10 MORGAN STANLEY

© 2017 Morgan Stanley Smith Barney LLC. Member SIPC. 87592 09/2017

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