You’ll wonder where the money went when you lose your Medical Benefit!

The MEBA Medical and Benefits Plan has been experiencing a roller coaster ride of changes centered around the continued depletion of Plan reserves and it’s need for a better balance between contributions and expenses.

Spin the numbers from the 5500 Forms filed with ERISA, for the Medical Plan, from the years 2000 through 2004 around in a hat and you can come up with some interesting statistics, and comparisons.


2000 contributions from employers and retirees: $22.29 million.
2000 direct payments to participants and dependents: $23.18 million.

2001 contributions from employers and retirees: $22.74 million.
2001 direct payments to participants and dependents: $22.95 million.

2002 contributions from employers and retirees: $25.33 million.
2002 direct payments to participants and dependents: $24.36 million.

2003 contributions from employers and retirees: $34.03 million.
2003 direct payments to participants and dependents: $27.45 million.

2004 contributions from employers and retirees: $31.49 million.
2004 direct payments to participants and dependents: $27.43 million.

So the ascertaitions by the Davis Group those contributions from current contracts and retirees will keep up with expenses, and keep the Plan was on sound financial footing, was on the surface not totally misleading. However, these figures do not reflect payments to other insurance providers which seems to average $2.5 million per year, administrative costs which average $3.5 million per year, and losses and gains in the stock, bond, and cash funds which have been averaging a $3.35 million loss per year. So over and above the contributions/benefit equation is the loss of $9.35 million a year in the other components of the Medical Plan.

Nor does it reflect or fully explain the transfer of $7.5 million from the Re-allocatable Fund to cover expenses generated by the November 2003 Medical Plan Modification to cover surviving spouses. There is, however, $6.68 million amount that first appears for an end of the year asset value for 2003 under Schedule H, Financial Information, Line c9, “Value in interest in common/collective trusts.” Was this money, or assets of $14.18 million transferred to inflate the value of the Medical Plan prior to an election year (2004)at a time when it was actually experiencing large losses due to financial investment ineptitude and high Administrative Costs. The value of this asset at the end of 2004 was $5.60 million.


In reference to Administrative Cost let us look at Schedule C on the 5500 form which is “Service Provider Information”. This is payments to individuals who have provided services to the Medical and Benefits Plan and come under the heading of Administrative Costs in Expenses Line j5. The Plan is only required to list the top 40 individuals that provided services and the payments made to them. This top 40 list includes every one from the Plans Legal Counsel, to Port Representatives all the way down to the guy who sweeps up at night.
For the year 2003 some of these payments were:

Vacation Plan Manager: $55,123
Pension Manager: $63,828
Human Resources Manager: $60,474
Lawyers and Legal Aid: $652,899
Plan Administrator: $158,181
Aon Consulting: $92,643
Outport Rep-Jacksonville $42,883

These figures begs the question of why are these salaries (Vacation Plan Manager, Pension Manager etc.) being charged to the Medical Plan. While calculating out the Top 40 list for the year 2003 I was able to account for $450 thousand in payments that actually went to someone who dealt primarily with the Medical Plan.

As I mentioned earlier you’ll wonder where the money went when you lose your medical benefit!

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May Flowers

Spring is in the air and the April Union meetings will herald the election of the annual Financial Review Committee.

This year the committee will have to grapple with a serious issue and one that should be of great concern to all Mebites, active as well as retired:

How is it that Tim Brown, President of the MM&P who is a mere Captain, makes 350 grand a year, while Ron Davis who after all, is an Admiral is paid only half as much?

Something should be done to rectify this situation and quick too.

“But wait!” you say, “What does Davis do to warrant such a fat raise?”

That’s not the right question. The question is: “Can the MEBA afford to be seen as a cheap little Union and Davis seen as a cheap little guy?” Well, maybe that’s not the right question either. But look at it this way:

When Davis hired Messrs. Joseph and Kelly to help him do his job, and get the MEBA embroiled in a $400 million lawsuit, you were in effect paying $375,000 per year for a MEBA President. Davis now has cast Joseph and Kelly adrift. Is it not fair that he should participate in the savings? Double Davis to equal Tim Brown and you’re still saving $25,000 per year. It’s all how you look at it!

But 350 grand a year means there is still no real difference between the two Union heads. Why not go a bit further: fire Billie Doyle and pay Davis 400 grand! Now there’s a respectable difference between Davis and Brown and…..you’ve now saved $70,000 per year. See, this gets easier al the time! In short, the more you pay Davis, the more hard working Members dues you save!

At public occasions Davis now follows Mike Sacco around like a lapdog, giving credence to the notion that the MEBA has become a de facto subsidiary of the SIU. Davis’ position as President of the MEBA will be secure as long as he does what he’s supposed to. Mike Sacco has reason to be friendly however, seeing as Davis will be looking to transfer as much as $400 million of MEBA assets to the SIU’s real subsidiary, the AMO.

And because Davis is friends with Sacco, he does not need Joseph and Kelly to help him win Union elections anymore. And Sacco is hugs and kisses with Elaine Chao, so that protects Davis as well.

Which is why you may as well pay Davis 400 Grand per year. After all, it’s only your dues money and you can always pay more dues. Besides, if Davis is going to give away all those millions, he ought be able to afford a decent set of duds. And here’s another thing: if he’s out spending his own money, he doesn’t have time to be out spending pots of MEBA money on boondoggle projects costing millions! See, you are now millions ahead!

That’s why this year special consideration must be given to just who will serve on the committee. Should you elect someone who you feel will best represent the interest of the Members?

Silly Rabbit! Absolutely not! In fact, don’t even go to the meetings. Davis can shuttle a sufficient number of shills and officials around the country at Union expense (see “unallocated expenses” in the LM-2 statements) to get who he needs on the FRC. Anybody who is not a Davis hack will only cause the Davis Administration to spin information in order to legitimize this FRC farce. Why cause all this extra fuss? Do yourself a favor: be apathetic!

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