ING's Retirement division announced today that it has launchedthe next generation of its retirement health reimbursementarrangement — the ING Health Reserve Account (ING HRA) — to helpstate and local governments fund their employees' future healthcare expenses on a tax-favored basis.

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The latest HRA offering, which builds upon ING's existingstrategy, provides an expanded menu of investment options and athird-party recordkeeping solution that helps simplify planadministration.

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Retiree health care coverage is a valuable benefit for publicsector employees, and many consider it to be an even more criticalpart of their total compensation package than ever before. However, with rising medical costs and tightening budgets,retirement health benefits represent unfunded liabilities that canstrain public systems.

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"As state and local governments face mounting pressure on theirretirement systems, there is a growing demand for solutions thatcan help them better manage future benefits liabilities," saidBrian Comer, president of Public Markets for ING U.S. RetirementServices. "By pre-funding their retiree medical savings plansthrough a health reserve account, employers may significantlyminimize exposure to important, post-employment benefits whilepreparing employees for health care costs when they will most needthis support."

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ING initially developed its HRA program to help minimize theimpact of government accounting standards — GASB Statements No. 43and No. 45 — which require public employers to report future,post-employment benefit liabilities (other than retiree pensionbenefits) on their annual financial statements. Theseliabilities, however, and the long-term costs they represent may beoffset in advance through various pre-funding strategies.

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One way this can be done is with the ING HRA™, which allows anemployer to set aside funds to reimburse employees in the futurefor qualified medical expenses, after they have retired orseparated from service. A key benefit for employees is tripletax savings — contributions, earnings and reimbursements are alltax-free.

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Among other features, the new ING HRA™ offers the following:

  • Choice among more than 100 investment options from leading fundcompanies. These include a fixed investment option with aguaranteed minimum crediting rate*, socially responsibly funds, anda variety of offerings by ING's fund manager, ING InvestmentManagement.
  • Participant counseling services with one-on-one and groupmeetings.
  • A technology-driven, third-party recordkeeping solution thatincludes efficient claim processing and reimbursement services, acustomer service call center, account statements and reports, and24/7 online account access.
  • A flexible design that can accommodate two widely usedpre-funding vehicles — a voluntary employees' beneficiaryassociation (VEBA) trust or a governmental trust under IRC Section115.

To learn more about the ING HRA™ program, contact ING at[email protected].

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