4.10 4.10
AGREEMENTSTenllex-2022-23 Service Fee Agreement—11-7-2022
RESOLUTION AUTHORIZING ENGAGEMENT OF PENFLEX, INC.
SERVICE AWARD PROGRAM SPECIALISTS TO PROVIDE
ADMINISTRATION AND SUPPORT SERVICES FOR 2023/2024 AND
PROVISION OF 2022 STANDARD YEAR-END SERVICES
RESOLUTION NO.: ,2022
INTRODUCED BY:
WHO MOVED ITS ADOPTION
SECONDED BY:
WHEREAS, the Queensbury Town Board wishes to engage the services of PENFLEX,
INC. Service Award Program Specialists to provide administration and support services during
2022/2023, and the 2022 standard year-end administration services for the Town of Queensbury's
Volunteer Firefighter Service Award Program and the LOSAP Audit Package, as outlined in
PENFLEX's Service Fee Agreement presented at this meeting, and
WHEREAS,PENFLEX will provide these services for the total estimated amount of:
• $14,100—Estimated Standard and Distribution Services Fees; and
• $ 345 —NYS LOSAP Audit Package;
for a total estimated cost of$14,445,
NOW, THEREFORE, BE IT
RESOLVED, that the Queensbury Town Board hereby approves and authorizes the
engagement of PENFLEX, INC. to provide administration and support services during 2022/2023
and the 2022 standard year-end administration services for the Town of Queensbury's Volunteer
Firefighter Service Award Program for a total estimated cost of $14,445, to be paid from the
appropriate account as determined by the Town Supervisor and/or Town Budget Officer, and
BE IT FURTHER,
RESOLVED, that the Town Board hereby authorizes and directs the Town Supervisor to
execute the Service Fee Agreement with PENFLEX, INC. substantially in the form presented at this
meeting and the Town Supervisor and/or Town Budget Officer to take any other actions necessary
to effectuate the terms of this Resolution.
Duly adopted this 7 h day of November, 2022 by the following vote:
AYES
NOES
ABSENT:
50 Century Hill Drive,Suite 3 t 800-742-1409
PENFLEXCJI) Latham,New York 12110 f 518-783-6915
Email: info(cupenflexinc,com
SERVICE AWARDS FOR FIRE & EMS penflexinc.com
October 2022
Ms.Victoria LaMarque
Town of Queensbury
742 Bay Road
Queensbury, NY 12804
Re:Service Award Program 2022-2023 Service Fee Agreement
Dear Ms. LaMarque:
In 2022, Penflex welcomed the opportunity to reconnect with our clients through in-person meetings, at trade shows,
and attending trainings together. Also, many of our clients, including ourselves, perfected the art of conducting effective
virtual meetings this year. No matter how we've interacted with our clients, two constants remain: one is the level of
passion that you all continue to exhibit in serving your communities, and the second is the level of dedication and
commitment Penflex has in serving you, our clients! Penflex continues to provide continuity and consistency to our
clients when administering their LOSAP program.
Enclosed, please find our service fee agreement for the new administration year, which sets forth the fees for actuarial
and administration services for your program. As with every year, Penflex is excited to service and remain a trusted
partner for our clients.
Over the last year, Penflex continued to leverage the resources of a large company like McNeil & Company while still
operating autonomously and providing a small firm feel, focused on being available and attentive to our clients. To
highlight some technology advancements, Penflex now offers online training with a tracking management program with
2417 access to a wide variety of courses for volunteers, all free of charge to the plan sponsor. Additionally, clients can
now utilize a secure client portal which allows the sharing of the plan,client, and participant information electronically. If
you want more information on these enhancements, please get in touch with Penflex staff. Behind the scenes, one of
the most significant technological investments was for Penflex to move onto the McNeil Information Security Platform.
The new platform allows for participant information to be monitored in a 2417 manner that no other independent
organizations would have the resources to accomplish. In today's environment, protecting participant information is
paramount, and our clients can rest assured that Penflex, in conjunction with McNeil,offers a robust technology security
infrastructure.
Indeed,the cornerstone of Penflex has always been the level of knowledge, experience, and expertise our staff exhibits
when working with our clients in addressing their LOSAP needs and questions. Since last year,Penflex added two new
staff members, with one associate holding the highest actuarial credential (Fellow of the Society of Actuaries). The
influx of new staff, experience, and ideas directly contribute to the high standard of expectations Penflex has shown for
over 30 years when servicing our clients.
Please return a signed copy of the Service Fee Agreement to Penflex Actuarial Services, LLC by January 131, 2023.
Your timely response is greatly appreciated. The signed Agreement can be faxed to (518) 783-6915 or emailed to:
info@penflexine.com or mailed to: Penflex Actuarial Services, LLC. 50 Century Hill Drive, Suite#3, Latham NY 12110.
Please note that if applicable, an invoice for our base fee is enclosed. If you are requesting that we prepare an optional
financial statement disclosure package, please review your auditor's information, and make any applicable changes to
the Agreement.
The entire Penflex staff takes great pride and satisfaction in meeting the high expectations of our clients and will always
have their best interest at the forefront of our actions. Thank you for your continued business!
Paul A.Cognetta
Vice President of Operations
Penflex Actuarial Services, LLC.
11/1/2022-10/31/2023 Service Fee Agreement
TOWN OF QUEENSBURY
VOLUNTEER FIREFIGHTER
SERVICE AWARD PROGRAM
Standard Services Fee Schedule
Per-Participant Fee: $47
Payment certification and trustee directive letters: $75 per letter
Total Estimated Standard and Distribution Services Fees: $14,100
Optional Preparation of Financial Statement Disclosures (For Additional Fee)
Disclosure Packages Provided For Program Year 2021*
NYS LOSAP Audit Package: Yes Auditing Firm: BST & Co. CPAs, LLP
Contact Name: Paul Goetz
Email Address: pgoetz@bstco-com
Please Check 'Yes' Or 'No' For Program Year 2022:
Complete the NYS LOSAP Audit Package for a fee of$345: Yes No
Please refer to the enclosed newsletter titled'NYS volunteer Firefighter LOSAP Audit Requirement'for more information.
PLEASE NOTE: If you are requesting any Disclosure Packages, please review and make
any necessary changes to your auditor's information noted above.
All other services are optional and are billed only when requested. Please call for fee estimates and
purchase order arrangements. optional services include additional client meetings, drafting of special
correspondence and documents, and performing cost estimate calculations for proposed program
amendments. Plan transfers have a $750 processing fee, while plan consolidations or terminations fee will
be determined, by the complexity of the work upon request.
To authorize Penflex Actuarial Services, LLC. to begin providing these services in accordance with this fee
schedule, please have the Town Supervisor sign and return this Service Fee Agreement. Keep a copy for
your records.
Z":)Z,rW� Aew�
Print Name Signature Paul A. Cognetta
Supervisor Vice President of Operations
Town of Queensbury Penflex Actuarial Services, LLC.
Email Address
P E N F L E X U0
SERVICE AWARDS FOR FIRE & EMS
SERVICE AWARD PROGRAM STANDARD SERVICES
I. Prepare an annual Service Award Program statement for each Service Award Program participant,
including those who are in payment status.
2. Prepare for the record and for audit purposes an annual Service Award Program report which:
a. shows and completely documents the calculation (defined benefit plans) or allocation (defined
contribution plans)of the annual Program cost.
b. accounts for changes in the Program's assets.
C. lists the earned Service Awards(defined benefit plans)or accounts for changes in the Program
account(defined contribution plans)for each participant.
d. summarizes the major provisions of the Program.
e. lists current payment recipients.
f. includes a service credit listing for current participants.
g. includes a written description of the actuarial methods and assumptions used to calculate the
annual program costs(defined benefit plans).
h. For members of the Sponsor's Governing Board or Officials, prepare:
L "Fact Sheet"which includes current year important information about their Program.
ii. "Annual Report Commentary" correspondence which alerts officials about emerging
issues and/or explains changes in the Program (such as increase/decrease in Program
funding costs).
3. One meeting upon request, first with officials and then with volunteers to review the Annual Report,
to answer questions from volunteers about their annual statements, and to provide updates on
Service Award Program related legislation and on their own Program.
4. Provide pertinent forms for participants to apply for payment upon eligibility, elect or change
beneficiaries,etc.
5. At year-end, provide written instructions about how to prepare the required certified listings to be
approved by the Sponsor's Governing Board and Department/Company officials, posted by the
Department/Company, and sent to Penf3ex Actuarial Services, LLC.
6. Project the Program's cash flow needs in order to plan and formulate investment strategy.
7. Prepare written notification/explanation to be sent to persons who cease to participate in the
Program.
8. During normal business hours, have trained staff available to answer questions from officials and
designated client contact persons.
9. Throughout the year, receive, review and reconcile financial statements from custodian and/or
investment and/or insurance providers.
10. Process Service Award payment applications, certify payment amounts and eligibility, prepare
payment directives and communicate directly with the payment recipient and/or custodian and/or
paying agent when necessary.
11. Answer routine questions from Sponsor's auditors about the Program and the Annual Report,
12. When required, prepare vouchers for payments to the Program Trust Fund.
Penflex Actuarial Services,LLC
50 Century Hill Drive,Suite#3
Latham,NY 12110 E N F L
800-742-1409 SERVICE AWARDS FOR FIRE & EMS
accounting@mcnellandcompany.com sy 0., McNei[&Co.
www.penflexinc.com
INVOICE
BILILTO INVOICE# 2022-1270
DATE 10/12/2022
Attn:Barbara Tierney,Budget Officer
Town of Queensbury TERMS Due on receipt
742 Bay Road
Queensbury,NY 12804
DESCR PTI 1Y'OT ,,�flATE
AMOUNT
Z -7,
Town of Queensbury Volunteer Firefighter Service Award Program Administration Services for the 192 45.00 8,640.00
period November 1,2022 to October 31,2023.
Billing 60%of estimated per-participant fee,payable at the beginning of the agreement term
(November 1,2022). Remaining Penflex fees will be billed after the Annual Report is completed and
will be based on the actual number of program participants/account balances as of 12/31/2021.
Estimated participants as of 12/31/2021 is 320. 60%of 320=192 participants
Please remit payment to: BALANCE DUE $8p640.00
Penflex Actuarial Services, LLC
PO Box 5670
Cortland NY 13045
PEN FL
SERVICE AWARDS FOR FIRE & EMS
Background
In November 2005 and May 2006, the Long Island-based newspaper Newsday published articles about
Length of Service Award Programs (LOSAPs), in particular, their relatively poor funded status. Partly in
reaction to these articles, a bill was introduced in 2006 that was eventually signed into law. This new
legislation, GML §219-a(3) required a LOSAP to be audited annually by an independent certified public
accountant(CPA). The justification for the bill stated, in part, the following:
Annual audits w111 help ensure&hat p1ograms are adequately frinded, a/Ioav p1ogram sponsors 1a adjust
contributions and increase transparency.
The new statute required the audits to commence effective with the program sponsor's fiscal year ending
on/after June 30, 2007. Although the original deadline for the completion of the audit was 90 days, it was
subsequently increased to 270 days. However, for reasons discussed below, the deadline for fire districts
that prepare audited financial statements is 180 days. The audit report must be submitted to the Office of
the State Comptroller(OSC).
Our observation is that the audit requirement has made LOSAP sponsors generally more educated about
the financial state of their program, but more progress must still be made. Penflex is proactively working
with CPAs, statewide associations, and other professionals serving LOSAP sponsors to increase
awareness about the need to more closely monitor these programs.
Comp/fiance&Afode/Footnote
The text of the statute is somewhat vague and open ended. To clarify how a LOSAP sponsor is to comply
with this requirement, the OSC established guidelines in a 2008 memorandum which outlined two
options. The first option is aimed towards LOSAP sponsors that already have their financial statements
audited by an independent CPA. These sponsors can include a footnote of information about the LOSAP
in its financial statements. The CPA will then audit the footnote and LOSAP as part of the overall financial
statement audit. The second option is to engage a CPA to perform a LOSAP-only audit in compliance
with the AICPA Audit and Accounting Guide for Employee Benefit Plans. With either option, the LOSAP
information is to be presented using the model footnote format and submitted to the OSC. Note that fire
districts that are required to have their financial statements audited must submit the financial statements
to the OSC by June 301h, making the effective filing date for these fire districts 180 days, not 270.
The footnote is to state basic program provisions and benefits provided. It must describe how the
program assets are managed and what vendors have been hired to assist the sponsor in its fiduciary
role, including asset management and third-party administration. It also requires disclosure of the
financial condition of the program, which includes the investment allocation of the program assets and
changes in the assets during the year, liabilities, contributions required and made during the year, fees
paid to vendors for administration, actuarial and/or investment management services, and actuarial
assumptions (for defined benefit programs).
lnfo@penfiexinc.com 50 Century Hill Dr.,Suite 3, Latham,NY 12110 (800)742-1409
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The 0S8P audit must befiled with the OSC by the required deadline. Based on our discussions with
UbC staff and information we requested on LOS8P audits reported to the []SC. it appears that LO8AP
audits are not being transmitted tothe OSC even though they are likely being nonnp/ebad by the CPA.
Based on information obtained through a Freedom of Information requmat, it appears that the number of
oubrnius/nnm has increased from 306 in 2013to 353 in 2016 (the most recent year avai|ab|o). Although
information about the L[)G&P (i.e., LOGAP footnote) is submitted with the Annual Update Document
(/\U[)), this submission does not satisfy the L[}S8P audit requirement because it is not one of the two
compliance options outlined above.
Based on municipal spending data available on the OSC website, there are about 510 municipalities that
report an annual expenditure for LOGAP. Hovw*ver, this data does not include many towns, since the
L(}8AP cost /s often rolled into fire protection contract costs. Knowing this, we estimate that 353 L{}SAP
audits likely represents o filing compliance rate of5O96 to 6096 of all LOSAP sponsors. Although we
believe that the L[}GAP statute requires the CPA to file the audit report with the [)SC direot|y, we
understand in speaking to CPAs that there are certain restrictions that do not always make this a practical
procedure. We recommend that each sponsor work with its CPA to mnaunm that the audit in being filed
with the O8C. either by the CPA orthe sponsor. |t can be electronically fi|edto . /m
addition, vve suggest that the sponsor review the results ofthe audit with the CPA and ask tobmalerted
of any problems or concerns. If the CPA ever has questions about actuarial or administrative work
padbrmnedbyPenflex. theCPAimanoounagedtOountactusdimoct|ytohnvothaomqueaUonaonsvvered.
PeOffex L 0SAPA&W
To assist our clients in complying with the audit requirement, Penflex developed an optional LOSAP Audit
Package service. After consulting with several CPAs, the LOSAP Audit Package was modeled to provide
all the necessary information to fulfill the -audit requirements for the sponsor. Eoanntia|/y. PenOox
completes the model footnote on behalf of the sponsor and provides the necessary documentation for the
CPA to verify its accuracy — annua| repmrt, asset stetementm, fees peid, and other supporting materials.
The L{}8APAudit Package iaenmai|ed to the CPA and sponsor. Penf|axanevvara any questions from the
CPA about the LC)G/\P or the package. Most CPAs find this package helpful in that it gives them direct
oouees to the necessary information from PenOex rather than having to piece it together from nnu(Up!a
sources. Our clients benefit from o more streamlined process that reduces their effort and improves the
accuracy of the disclosures. ||oxxover, before asking Penflax to prepare the LOSAP Audit Package,
please discuss it with the CPA to determine if the goal of the package will be achieved.
While our LOSAP audit package is comprehensive in its content, it cannot function as the audit itself. The
audit must be performed by the CPA, and the results of the audit must be submitted to the OSC.
What.yo4unemedtoknomm..
" The LOSAP audit is an annual requirement that must be filed with the OSC within 270 days ofthe
end of the opnnmmr'm fiscal year(1180 days for most fire«8Umtrizts).
• ThePenf|ex L(]SAPAudit Package is an optional service and provides the necessary disclosures
but does not satisfy the audit disclosure requirements.
" The sponsor must retain onIndependent CPA tn perform the annual audit.
" There are two audit options—the CPA can help the sponsor determine which approach is best.
° Attaching the footnote to the AU[} does not satisfy the audit requirement.
3
� EN' F L E X DO
SERVICE AWARDS FOR FIRE & EMS
v °
The accounting and financial reporting requirements of Governmental Accounting Standards Board (GASB)
Statement No. 73 "Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB 68" became effective for fiscal years beginning after June 15, 2016. Penflex has responded to this
new client need by providing educational information as well as an optional "GASB 73 Disclosure Package"
containing the information required to be reported under GASB 73.
The majority of our clients who have requested the GASB 73 Disclosure Package have now completed their first year
of financial statements including these new requirements; a handful of clients are in their second year of reporting
under this new standard. Over the past year,we have prepared the actuarial information required by GASB 73 for
our clients and communicated with them and their auditors regarding implementation of the new standard.
Throughout this process we have heard many questions and concerns about the new standard and the information
presented in our GASB 73 Disclosure Package.
The following is a list of some of the most frequently asked questions.
Ql.is my municipality required to report financial information in accordance with GASB 73?
Al. Financial statements that are prepared in accordance with generally accepted accounting principles(GAAP)are
required to comply with all applicable GASB statements, including GASB 73. Many of our clients consist of Towns
and Villages, and the majority of those municipalities prepare GAAP based financial statements which are including
the GASB 73 information. Conversely, fire districts typically do not prepare GAAP based financial statements.
Ultimately, your accountant or auditor will be able to advise you as to whether the GASB 73 information will be
needed by your municipality.
Q2.is the Office of the New York State Comptroller(OSC)going to require GASB 73 information to be reported on
the Annual Update Document(AUD)?
A2.As of the date of this newsletter,the OSC has not issued any guidance on the reporting of GASB 73 information
on the AUD. However,the OSC did recently issue guidance on a separate statement, GASB 75,which applies to the
treatment of liabilities for other post-employment benefits (OPEB) sometimes offered by local governments. The
OSC will not be requiring the GASB 75 OPEB information for AUD reporting purposes. Penflex is hopeful that similar
guidance will be issued soon regarding the reporting of GASB 73 information on the AUD.
Q3.My[OSAP is a defined contribution plan,not defined benefit. Do I still need the Disclosure Package provided
by Penflex?
A3. Penflex does not provide a GASB 73 Disclosure Package for our clients with defined contribution plans. While
GASB 73 is applicable to defined contribution C_OSAPs, the information required does not require special actuarial
calculations. The GASB 73 disclosure can be prepared by your accountant or auditor using the Annual Report
already provided by Penflex.
info@penflexinc.com 50 Century Hill Dr.,Suite 3,Latham, NY 12110 (800)7424409
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Q4. Does this mean that there will be a change to the LOSAP contribution or funded status calculated by Penflex
inmy Annual Report?
A4. GA5B 73 is meant to impact the accounting and financial reporting ofpensions only and intentionally does not
address how the pensions are funded. PenOex is committed to he/ping our clients properly fund for the benefits
promised to volunteers by determining annual contribution requirements based on sound actuarial principles and
appropriate funding policies. The calculation of the 5AS8 73 information is unrelated to plan funding calculations;
therefore GASB 73 will have no impact on program contributions or funded status.
QS. Why is the Total Pension Liability (TPL) different from the Actuarial Accrued Liability (Ao/) shwu,n /n the
Penflex Annual Report?
A5.As noted above,the 5AS8 73 information is intended for accounting requirements, notp|an funding.The TPL is
calculated using methods and assumptions that are prescribed in that statement and that differ from those used in
Penflex funding calculations.For this reason,the TPL in the GASB 73 Disclosure Package will differ from, and should
not be compared to,the 4ALin your LOSAP Annual Report.
Q6. Why does the information inmyGASB73 package have a measurement date that is one year prior to the
date qfmyfimncialstatements?
A8. Penflex is measuring the Total Pension Liability(TPL) as of a date one year prior to some clients'fiscal year end
in order to be able to provide th'e Disclosure Package in a timely manner and to best align with staff workloads.This
practice isin accordance with the G4SB73 standard which allows for some flexibility in the timefranneat which the
TPL is measured.Specifically,the TPL can be measured on atiydate up to a year prior to the reporting dote' or the
fiscal year end.This choice in measurement date has no material impact onthe'required
``--~-° uns.
q7. What b the difference between the uA0a73 package and the/VYStx»o/OSAP Audit package?
A7.Section 2l9'a(3)of the New York State General Municipal Law requires every volunteer firefighter service award
program to be audited. Theimplementation of the new G4SD 73 standard does not change this State audit
requirement.The challenge for the majority of LOSAP sponsors is that compliance with the State audit requirement
takes the form of footnote to the spunsor's audited financial statements. The template for this footnote was
provided by the Office of the State Comptroller.The information about the program that is detailed on the footnote
is based on the Annual Report prepared by PenMex, which is different than what is reported in the GASB
73 disclosure (as addressed in Question 5). This has left many treasurers, comptrollers, and auditors unsure how
to balance complying with both requirements against the potential confusion of reporting two financial disclosures
of the program on the same statement. From our discussions with the OSC about this topic,we have been alerted
that guidance is forthcoming. In the meantime, you should continue to work with your auditor to decide the
most appropriate way tnproceed.