Thanexus Annual Report 2012

2012 ANNUAL REPORT
Enhancing and Personalizing the
Employer-Employee Experience
BOARD OF DIRECTORS
Kimberly M. Saul-Bowne, CFSP, Chair
Saul Funeral Homes, Inc.
Hamilton Square NJ
Victor J. Costantino
Costantino Funeral Home
Berlin NJ
Joseph C. Parell III, CFSP, Vice-Chair
Poulson & Van Hise Funeral Directors
Lawrenceville NJ
Rosemary K. Mahoney
CoopMetrics
Arrington VA
James R. Tomasello, Secretary
Gardner Funeral Home
Runnemede NJ
Steven N. Perlmutter
Walter J. Johnson Funeral Home
Clark NJ
Thomas J. (Toby) Bizub Jr.
Bizub-Parker Funeral Home
Little Falls NJ
Glenda S. Stansbury, CFSP
In-Sight Books, Inc.
Oklahoma City OK
Enrico T. Caruso Jr., CFSP
South Jersey Funeral Associates, Inc.
Pennsauken NJ
MANAGEMENT TEAM
Wilson H. Beebe Jr., President
George R. Kelder Jr., CFSP, Executive Vice President
Barbara D. Guinta, Chief Financial Officer
Lorraine Walker, PHR, Director of Human Resource Services
As the “employer of record” for approximately one third of the industry payroll in New Jersey, Thanexus
prides itself on supporting our cooperative members in the provision of human resource, financial,
insurance and marketing services. The past year reinforced our long-standing commitment to keeping
healthcare costs affordable, marketing materials compliant, insurance offerings pertinent to today’s
realities, and generating competitive employment opportunities.
The seamless integration of human resource and benefits services continues to be our primary focus.
Through the use of rapidly evolving technologies, we are enhancing the quality of our services and
personalizing employee experiences.
The implementation of our online payroll system proved priceless during the aftermath of Superstorm
Sandy. While other companies remained inoperable for days we continued to perform necessary payroll
and benefits plan administration in alternate off-site locations, never missing a beat.
Costs for healthcare benefits have been on the rise across the nation. But Thanexus continued to retain
its low cost benefit offerings, even receiving an employer and employee surplus payment due to better
than expected performance.
The year also brought growth to Thanexus, as we welcomed two new stockholders to our family.
As 2013 progresses, we will be rolling out new Occupational Health and Safety Administration
(OSHA) compliance plan materials and forms, as well as two new OSHA field representatives, to
help stockholders keep their worksites safe for all who enter.
Our cooperative remains strong and our focus remains on our employers and employees.
Kimberly M. Saul-Bowne, CFSP
Chair
In 2012, Thanexus shared
employment-related responsibilities
with 69 stockholders in 113 registered
mortuaries at 106 worksites for a
Wilson H. Beebe Jr.
President
combined gross annual payroll
of over $30 million—which is
approximately one third of the total
industry payroll in New Jersey.
LOW HEALTH
PREMIUM
INCREASES AND
SURPLUS CREDIT
In 2012, the ability to provide excellent
choices for healthcare packages at
affordable rates continued to be a
primary goal at Thanexus. In the wake
of nearly a decade of double-digit health
premium increases, we incurred lowerthan-national-average health premium
increases for the second year in a row.
In July, a “Return of Surplus” of 3.4
percent of 2011’s premium rates was
issued to both employers and employees
as a result of better than expected
performance. The surplus appeared as
credit against all health and life benefits
costs. This “contribution holiday” was a
result of the Association Master Trust’s
(AMT) nonprofit, self-funded health
benefits arrangement, thus allowing the
company’s trustees to refund surplus
directly to its participating members.
Premium credits and lower than national
average rates during a time of national
healthcare reform are one of the reasons
why the partnership between Thanexus
and AMT remains strong.
NEW INSURANCE PRODUCT OFFERING
In 2012, all stockholders of record* gained limited coverage under a Thanexus
employment practices liability insurance (EPLI) policy for certain covered
employment-related claims.
The new EPLI policy provides defense and claims coverage up to $1 million for
each covered claim, subject to an aggregate limit† of $5 million. The policy is
subject to a deductible of $25,000, applicable to each stockholder of record on
each and every claim.
While the new limited coverage is an
added benefit, it is not a substitute for
individual stockholder EPLI policies.
All stockholders are still encouraged
to carry their own EPLI policies.
In 2012, funeral directors placed close
to $3.0 million in insurance premiums
with Thanexus Financial Services, LLC.
*Coverage only applies to the stockholder of record on the books and records of Thanexus.
†
An aggregate limit means that if there were several claims against several stockholders all at the same
time, the policy limits could be exhausted before the $1 million limit was reached on each individual
covered claim.
HEALTHCARE REFORM COMPLIANCE
The establishment of the Patient Protection and Affordable Care Act (PPACA)
in 2010 has already begun to impact many American employers.
WEB-BASED
PAYROLL REPORTING
Technology is transforming almost every
aspect of our businesses. Thanexus expanded
its technological efforts this past year by
converting from a paper heavy process to a
comprehensive Web-based reporting tool.
The addition of this tool allows Thanexus to
provide online access to important forms and
manuals, and enables us to connect more with
our managers and employees.
Thanexus continues to ensure that our stockholders are in compliance
with healthcare reform requirements by keeping them informed of impacts
affecting how the cooperative model operates. For example, due to the
way Thanexus aggregates its administrative obligations among its
co-employer stockholders, all 2012 W-2 statements included a published
value of healthcare coverage.
We also conformed to the nondiscrimination rules in that Thanexus
stockholders are now required to charge one set dollar amount for employees
regardless of their age.
In 2013, Thanexus will
continue to endeavor to
become completely
paperless by launching
direct deposit and
paperless payroll
campaigns throughout
the year.
Additionally, Thanexus began conducting affordability tests on all worksite
wage/healthcare cost ratios in order to measure whether employees have
reasonable fees for their coverage. Doing this should help deter the imposition
of any “pay or play” penalties for those employers that have employee
healthcare contribution costs that exceed 9.5 percent of their gross wages. If
circumstances are identified where this is the case, Thanexus will coach those
stockholders to help meet the January 1, 2014 affordability requirement.
2012 FUNERAL CALL VOLUME SURVEY*
AVERAGE CALL VOLUME
BREAKDOWN BY STOCKHOLDER
Over
250 Calls
13,180 Total
Calls
188
Average
Calls
66
122 Non-Cremation (65% of total calls)
Cremation (35% of total calls)
* Based on 67 responses out of 69 stockholders surveyed.
24%
33%
43%
126 – 250 Calls
125 or
Fewer Calls
LOWEST BENCHMARK PENSION COSTS
Once again, our Thanexus 401(k) Plan has among the lowest costs and fees. Benchmarked
against close to 500 other companies with a similar plan size, our employees have access to
a robust retirement plan at significantly lower cost.
LABOR AND WAGE BENCHMARKING
Our Thanexus Annual Compensation and Call Volume Survey remains the only source of
actual labor and wage benchmarking data in the industry.
2012 ANNUAL COMPENSATION SURVEY
The 2012 Annual Compensation Survey represents data for
262 licensees and 536 non-licensed employees—for a total of
798 funeral service professionals across New Jersey.
Licensed
Owner†
Licensed
Non-Owner††
Average Median
139,102
$
76,013
$
$
$
111,131
$
69,226
$
18.03 /hr
$
15.85 /hr
$
Clerical and
Administrative
$
Funeral
Attendant
$
Interns
$
AVERAGE PAYMENTS
220
Arrangements
238
Celebrant
Services
220
Embalming
17.50 /hr
$
15.00 /hr
$
15.73 /hr
† Owner compensation includes only that compensation taken in the
form of W-2 wages and does not include other typical forms of ownercompensation including dividends, rent and net profit distributions.
†† On average, a newly licensed non-owner salary begins at $35,000,
and varies by county.
250
58
$
60
$
(non-posted remains)
Local Direction
Door
(two-hour visitation)
Pallbearer (local)
MARKETING AND COMMUNICATIONS
In 2012, Thanexus stockholders received approximately 37,000 customized
marketing pieces that adhered to Federal Trade Commission and New Jersey
State Mortuary Board regulations.
MATERIALS INCLUDED:
• General Price Lists
• Statements of Funeral Goods and Services Selected
• Authorization Forms
• Promissory Notes and Invoices
• Cremation, Welfare (County) and Veterans Funeral Packages
• Eco Burial and Ethnic Funeral Packages
CONSOLIDATED BALANCE SHEET
(for year ended December 31, 2012)
ASSETS2012
NOTES:
Current Assets
Cash and Cash Equivalents
Investments in Marketable Securities
Member Receivables1
Prepaid and Other Current Assets
Other Receivables
1 Member receivables reflect the financial reporting
requirements to accrue all wages and benefits
as of December 31 that are not yet booked
and processed. The amount is considered fully
collectible. Accordingly, no allowance for
doubtful accounts is required.
Deferred Tax Assets
TOTAL ASSETS
$
1,700,377
166,921
576,979
57,381
143,948
2,645,606
6,637
$ 2,652,243
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Expenses
$
123,531
Accrued Salaries and Related Payables
1,142,466
Income Taxes Payable­—
Member Capital Payable2
29,120
Patronage Dividends Payable3
27,780
TOTAL LIABILITIES
1,322,897
STOCKHOLDERS’ EQUITY
Common Stock, $100 Par Value; 300 Shares Authorized,
69 Shares Issued and Outstanding Additional Paid in Capital4
Accumulated Other Comprehensive Income (Loss)
Retained Earnings TOTAL STOCKHOLDERS’ EQUITY
Total Liabilities and Stockholders’ Equity
6,900
404,240
10,456
907,750
1,329,346
$ 2,652,243
2 The company may retain member capital for
stockholders who terminate membership for a
period of time to pay outstanding liabilities after
the date of termination or as otherwise determined
by the Board of Directors. For the year ended
December 31, 2012, $29,120 of member capital
was accrued to pay stockholders who terminated
membership. There were no distributions to
stockholders for the year ended December 31, 2011.
3 Stockholders of Thanexus are entitled to
patronage dividend distribution of eligible
earnings. Investment income and earnings from
Thanexus Financial Services, LLC are not patronage
eligible. For the year ended December 31, 2012,
the company declared a patronage dividend of
$27,780 in the form of a cash distribution. 4 Additional paid-in capital represents previous
years’ patronage dividends, less amounts paid
out in cash distributions.
CONSOLIDATED STATEMENT OF OPERATIONS
(for year ended December 31, 2012)
REVENUE2012
Administrative Fees Insurance Commissions5 Initiation Fees
Other Income Employment Related Income6
$
TOTAL REVENUE
1,237,590
477,398
9,800
24,472
37,191,440
38,940,700
DIRECT COSTS
Salaries
Payroll Taxes
Pension Costs7 Other Benefits
30,003,021
2,247,675
1,633,994
3,306,750
TOTAL DIRECT COSTS6
37,191,440
EXPENSES
General and Administrative8
1,637,493
TOTAL EXPENSES
1,637,493
INCOME FROM OPERATIONS
111,767 6,183
Other Income
EARNINGS BEFORE DECLARATION OF PATRONAGE DIVIDENDS 117,950
Patronage Dividends Declared
(27,780)
EARNINGS BEFORE PROVISION FOR INCOME TAXES
90,170
Provision for Income Taxes
(23,944)
NET INCOME
$
66,226
Retained Earnings, Beginning of Year
$
841,524
Retained Earnings, End of Year
$
907,750
NOTES:
5 Gross commissions earned from the operations
of Thanexus Financial Services, LLC are combined
for financial reporting purposes. The operations
of Thanexus Financial Services, LLC do not
contribute to the patronage dividends and are
taxed at the cooperative level.
6 Total direct costs are netted against employment
related income in the company’s audited financial
statements. The total employee related costs for
2012 and 2011 were $37,191,440 and $36,769,694,
respectively.
7 The Company maintains an employee retirement
plan qualified under Section 401(k) of the Internal
Revenue Code. The plan is available to all full-time
employees who have completed one year of service.
All of the stockholder funeral homes contribute at
least three percent of eligible compensation. Firms
may contribute additional discretionary funds. The
401(k) expense for the years ended December 31,
2012 and December 31, 2011 were $1,633,994 and
$1,741,198 respectively.
8 General and Administrative costs include office,
marketing, personnel, professional, management
fees and Knowledge Based Funeral Service
expenses. The Company has a management
agreement with the New Jersey Funeral Directors
Services, Inc. to provide office space and related
services for a fee, which totaled $209,250 in 2012
and $206,000 in 2011.
THANEXUS
FINANCIAL
SERVICES, LLC
In 2012, our wholly owned insurance
subsidiary continued to offer optional
lines of insurance tailored to funeral
directors and industry-related businesses.
Members and non-members enjoy
the benefits of excellent coverage and
competitive pricing through our toprated insurance carriers.
Thanexus Financial Services, LLC is
staffed by salaried, non-commissioned
professionals who have no personal
stake in the lines of coverage offered.
2012 STOCKHOLDERS OF RECORD
Ana Maria Zevallos Home
for Funerals, LLC
H.T. Layton Funeral Home
and Cremation Service
Pettit-Davis Funeral Home, Inc.
Anthony R. Pizzi Funeral Home
Hagan-Chamberlain
Funeral Home, LLC
Prout Funeral Home, Inc.
Ashcraft Funeral Home
Bailey Funeral Home
Beaugard Funeral Home
Higgins Home for Funerals, Inc.
Hoffman Funeral Homes
Biondi Funeral Home, LLC
Holmdel Funeral Home, Inc.
Bizub-Quinlan
Funeral Home Corporation
Inglesby & Sons, Inc.
Inglesby Funeral Homes, Inc.
Bradley & Stow Funeral Home, LLC
Introcaso-Angelo Funeral Home
Bradley Funeral Home
John F. Pfleger Funeral Home, Inc.
Brunswick Memorial Home
John P. Condon Funeral Home, LLC
Costantino Funeral Home
Kain-Murphy Funeral Services
Creran Funeral Homes, Inc.
Krowicki Gorny
Memorial Home, Inc.
Damiano Funeral Home
Doyle Funeral Home, Inc.
M. John Scanlan Funeral Home
Poulson & VanHise Home, Inc.
Radzieta Funeral Home
Riewerts Memorial Home, Inc.
Robert Spearing Funeral Home, Inc.
S.W. Brown & Son Funeral Home, Inc.
Saul Funeral Homes, Inc.
Shook Funeral Home, Inc.
Shook’s Cedar Grove
Funeral Home, Inc.
Smith-McCracken Funeral Home
South Jersey Funeral Associates, Inc.
Stephen J. Priola Parsippany
Funeral Service
MacFadden Funeral Home
Timothy E. Ryan
Home for Funerals, Inc.
McCriskin-Gustafson
Home for Funerals, LLC
Vander May Colonial
Funeral Home, Inc.
Freeman Funeral Home
McLaughlin
Funeral Home Corporation
Vander Plaat Funeral Home,
LLC of Wyckoff
Funeral Service of New Jersey, Inc.
Memorial Funeral Home
Walter J. Johnson Funeral Home
G. Keenen O’Brien Funeral Home, Inc.
Nazare Memorial Home, Inc.
Warner-Wozniak Funeral Service, LLC
Galante Funeral Home
Norman Dean Home for Services
Wimberg Funeral Home
Gallaway & Crane Funeral Home, Inc.
Norton Funeral Home, LLC
Gardner Funeral Home
Oakland Memorial Home
George H. Wimberg
Funeral Home, Inc.
Pancoast Funeral Home
Ely Funeral Home, Inc.
Evoy Funeral Homes, Inc.
Festa Memorial Funeral Home, Inc.
The Godfrey Funeral Homes, Inc.
Gosselin Funeral Home, Inc.
Parow Funeral Home, Inc.
Peppler Funeral Home Inc.
In 2012, Thanexus welcomed
Inglesby Funeral Homes, Inc. in
Cinnaminson and Maple Shade and
George H. Wimberg Funeral Home
in Ventnor and Linwood.
CONTACT US
Interested in becoming a Thanexus stockholder?
Contact Chris Murphy, business development manager, at 888.309.5137.
PO Box L
Manasquan NJ 08736-0642
888.309.5137
www.thanexus.coop
©2013 Thanexus, Inc. All rights reserved. PO#13-092 4.13