Tribal Member Benefits Program©

A unique program that provides tribes the structure needed to address members’ specific needs, provide a per capita savings plan and minimize tax implications for its members.

Tribal Member Benefits Program©

FS Advisors Inc. (“FSA”) has been working with American Indian Tribes for the past 15 years creating and administering tribal member benefit programs as well as implementing investment management strategies to effectively maintain and fund these programs. With the approval of the General Welfare Exclusion Act of 2014, guidelines were established that allow American Indian Tribes to provide even more non-taxable benefits to its members.

FSA has created the Tribal Member Benefits Program©

that allows tribes to:

The General Welfare Exclusion Act The General Welfare Exclusion Act allows American Indian Tribes to establish benefits and programs to care for their tribal members. The Act enables tribes to create non-taxable programs to address their unique social, cultural, and economic issues. In developing these programs, tribes give significant consideration to individual needs as well as the needs of the entire community. In order to qualify as an “Indian general welfare benefit,” any payment made or service provided to or on behalf of a member of an Indian Tribe (or a spouse or dependent of a member) under a tribal government program must:

1. Maximize non-taxable benefits provided to tribal members.

2. Effectively administer a comprehensive benefits program electronically including tribal member benefits and a per capita savings plan.

3. Produce detailed annual benefit statements for tribal members and comprehensive program reports for tribal administration.

1. Be administered under specified guidelines and does not discriminate in favor of members of the governing body of the tribe;

2. The benefits provided under the program are available to any tribal member who meets the guidelines, are for the promotion of general welfare, are not lavish or extravagant, and are not compensation for services.

The General Welfare Exclusion

enables tribes to create unique tax exempt

benefit programs to address needs for their

tribal members.

Advantages of the Tribal Member Benefits Program©

The past decade has seen a variety of initiatives aimed at protecting tribal social programs. With the passage of the Tribal General Welfare Exclusion Act, tribes are now empowered to create benefit programs that can change the lives of their members. Although tribes have always strived to provide for the health, education, and welfare of their members, the General Welfare Exclusion Act provides the following opportunities:

• More structured approach for funding member needs.

• Benefits designed to meet the basic needs of all members - not lavish or extravagant.

• More control and better management options for benefit costs.

• Benefits provided are non-taxable.

Tribal member benefit programs include but are not limited to the following:

• Housing Programs - mortgage payments, down payments or rent payments (including but not limited to security deposits) for principal residences, enhancing habitability of housing, basic repairs or rehabilitation, paying utility bills and charges, etc.

• Educational Programs -

transportation, tutors, supplies, tuition payments, room and board, childcare, job counseling, training and interviewing expenses, clothing for job interview or training, etc.

• Elder and Disabled Programs - provides benefits/services for individuals who have attained age 55 or are mentally or physically disabled (as defined under applicable law, including but not limited to tribal government disability codes). Benefits

may include meals, assistance with daily household needs, transportation, housing improvements, etc.

• Other Qualifying Programs – childcare, health care (medical care), transportation for obtaining services at medical facilities, meals and lodging when receiving medical care away from home, relocation and shelter, cost of nonprescription drugs, transportation to the grocery store, etc.

• Cultural and Religious Programs - expenses to attend or participate in an Indian tribe’s cultural, social, religious, or community activities-pow-wows, ceremonies, traditional dances. Expenses for cultural or historical site visits, instruction about an Indian tribe’s culture, history, and traditions, funeral and burial expenses, etc.

Tribal member benefit programs include but are not limited to:

Cultural and

Religious

HealthCare

HousingEducation

Elderlyand

Disabled

Example #1Tribal Member Benefits

Funding • Tribe provides $10,000 towards

tribal member benefits in lieu of per capita payments.

• Funds are directed into tribally-sponsored benefits that meet the member’s needs.

Example - $5,000 towards health care and $5,000 towards utilities.

Member Savings • $10,000 of member benefits would

be tax exempt. Member would receive

$10,000 worth of benefit

• If the entire amount were distributed as a per capita payment it would be reported on a member’s 1099.

At a 25% estimated tax rate, the member would pay $2,500 in taxes and only receive $7,500 in per capita payment.

• The $10,000 provided in the form of tribal

member benefits would net more direct assistance ($10,000 vs. $7,500) to the tribal member and fund specific needs in the form of benefits for the tribal member.

Example #2Per Capita Savings Plan

Funding • Tribe provides $10,000 in per

capita payments.

• Tribal member elects to contribute $5,000 to a tribally-sponsored per capita savings plan and receive $5,000 as a per capita payment.

Member Savings • The $5,000 that is contributed to the per

capita savings plan is not taxed in the year it is deferred, but instead will be taxed in the year that it is received by the member.

The earnings on the deferred

amount also grow tax deferred until it is received by the member.

• The remaining $5,000 per capita payment would be reported on a member’s 1099.

At a 25% estimated tax rate,

the member would pay $1,250 in taxes and only receive $3,750 in per capita benefit.

Tribal Member Benefits Program© Examples

The Tribal Member Benefits Program© provides tribes the structure needed to address members’ specific needs, provide a per capita

savings plan option and minimize tax implications for its members.

Creation of the Tribal Member Benefits Program© FSA specializes in the design, enrollment, communication, administration and compliance of the Tribal Member Benefits Program©.

• Design – FSA assists tribes in assessing their members’ needs for priority and funding requirements and creating the necessary documents desired for implementing and administering the program. Although a plan document is not required, it is suggested that policies and procedures be developed by the tribe. Depending on the program being established and the benefit funding, amendment of a tribe’s Revenue Allocation Plan may be required.

• Enrollment – may occur with the tribe’s benefit department or by an online portal. FSA’s enrollment system allows tribal members to select tribally-sponsored benefits and/or participate in a tribally-sponsored per capita savings plan.

• Communication – Tribal leader and member education is critical for a

successful TMBP. FSA provides education and communication that can be delivered by onsite workshops, community meetings, webinars, mail-outs and blogs.

• Administration – FSA’s program administration can provide tribal members with debit card options for payment of benefit services and/or process qualified payments electronically or manually. FSA provides complete program management which includes all aspects of creating and administering a program, including providing comprehensive statements to tribal members and tribal administration.

• Compliance – To ensure the integrity of the tribe’s program, FSA performs compliance testing based on the tribe’s plan guidelines and provides extensive reporting options for a tribe’s internal audit or informational purposes.

Schedule a Webinar or Meeting with FSA to Learn More

FS Advisors, Inc. is an American Indian owned financial advisory firm that has been working with tribes for well over a decade as a trusted advisor in creating member benefit programs. As an active participant in Indian Country, we understand both the dynamic

nature and uniqueness of the challenges tribes face today. Contact us today to learn more about FSA’s Tribal Member Benefits Program© and how your tribe and tribal members can

benefit from the program.

NANCY LOWREY, PRESIDENTNLOWREY@FSADVISORSINC.COM

PHONE: 251.459.6915

PH 251.459.6910 FX 251.459.6918 110 Brookwood Rd. Atmore, AL 36502 fsadvisorsinc.com