As the result of the new Memorandum of Understanding effective June 16, 1972 which calls for additional contributions of $1.60 per man-day, total income will exceed total expenses beginning July 1, 1978. A "spot" budget as of that date indicates a projected operating surplus of 37.8¢ per man-day, B. INCOME AND EXPENSES Table 1 is a summary of the Plan's income and expenses for the year ended December 31, 1977. In that year there was a net decrease in unassigned funds of #1,824,200 and thi was about 28 percent of total income. In 1976 there was a net decrease of WW)** which was about 11 percent of total income in that year. Table 9 in the 1976 Annual Report projected income and expenses for 197 In that table we projected an operating deficit of $1,702,000. As you will see in terra ) the "operating deficit" was in fact $1,971,200 but the $347,200 dividend from the Equitable Life Insurance Company reduced it to the net decrease referred w prevl ously. The following paragraphs discuss the various tema of income and exy Employer contributions TABLE 1.-Statement of income and expense for year ended Dec. 31, 1977 Annual level cost of welfare benefits for pensioners and their dependents.. 202,500 Less: Welfare benefits paid for pensioners and their dependents (included in benefits paid above).. -452,753 Net decrease in reserves for welfare benefits for pensioners (-4.3 percent) -250,253 Administration expense (18.4 percent) 1,079,593 Professional expense (1.6 percent).. 95,024 Total expense (133.6 percent).......... 7,834,803 Operating decrease in unassigned funds for year ended Dec. 31, 1977 (33.6 percent)..... - 1,971,235 347,075 Dividend from Equitable Life Assurance Society. Net decrease in unassigned funds for year ended Dec. 31, 1977...... —1,624,160 TABLE 2. ADMINISTRATION EXPENSES FOR YEARS ENDED DECEMBER 31, 1977 AND DECEMBER 31, TABLE 2.-ADMINISTRATION EXPENSES FOR YEARS ENDED DECEMBER 31, 1977 AND DECEMBER 31, Table 4 shows the benefits paid in 1977 and each of the two prior years. This table provides the benefit information by category of beneficiary and by type of benefit. Total benefit payments in 1977 were $6,489,500. This was $572,800 (10 percent) more than in 1976 and $1,837,900 (40 percent) more than in 1975. In 1977, there were 9,905 seamen eligible for the full benefit program. In 1976, there were 10,139 and in 1975 there were 11,440. Accordingly, the decline between 1977 and 1976 was about 2 percent as compared to 11 percent between 1976 and 1975. In 1977, there were 280 seamen eligible for partial benefits as compared to 234 in 1976. Seamen eligible for full and partial benefits totalled 10,185 as compared to 10,373 in 1976, a decline of about 2 percent. Since benefit payments increased by 10 percent and you have now seen that the number of seamen decreased by about 2 percent, it follows that benefit payments per capita in 1977 were somewhat higher than in 1976. The higher level of benefit payments was due to increases in many of the benefits provided by the fund but most particularly with respect to the major medical benefits provided to both seamen and dependents and with respect to the prescription drug and dental programs. Major medical benefits paid on behalf of seamen increased by over 30 percent, the major medical benefits paid on behalf of dependents increased by almost 43 percent. This indicates both increasing utilization as well as the known factor of increasing hospital, surgical and medical costs. The prescription drug claims increased by about $73,000-about $8 per eligible seaman per year. In this case, utilization remains very low-2.45 claims per seaman and pensioner eligible per year, and most of the increase is the result of increases in drug costs. The average prescription cost in this case is $8.34, which is higher than most other welfare funds. This is in good measure the result of the low utilization which indicates a higher than normal pattern of not using the prescription plan for mau crescrictions and not filing for direct reimbursement. In any event the cost of eaman per month is markedly lower than most other funds. tental aims increased by about 3129.400-58 percent. On a per capita basis, 2 Increase was only slightly lower-about 57 percent-since there were essentially a same number of covered employees over the 2 years. This increase was not expected a new of the past history of the employees covered by this fund with -- ne zation of new benefits. anita benefits paid to seamen increased about 6 percent, per capita -Ce's or tependents were about 17 percent higher and pensioner benefits were ercent ower. Ail or these figures are derived from the statistics provided 33 apie 5 which shows the benefit payments per eligible seaman. dzie s prepared so that the actual trends in benefit payments from year to caependent of the number of seamen covered from year to year. ortom of "apie 5 vou will see that the grand total of benefit payments per De seaman per year was 3546.40 in 1977 as compared to $484 in 1976. This is an 19 seen |