90-day notice of Underfunding Plan implementation

All topics about cryopreservation costs, membership dues, etc.
Max.More
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90-day notice of Underfunding Plan implementation

Post by Max.More » Fri May 24, 2013 12:59 pm

Dear Alcor Member,

The Alcor Board of Directors has passed an Underfunding Plan that requires Alcor members with cryopreservation funding below today’s minimum levels of funding to pay additional membership dues to help reduce Alcor’s underfunding liability. An alternative to paying these additional dues is for members to increase their cryopreservation funding to match the current minimum levels of funding, which are $200,000 for members choosing whole-body cryopreservation and $80,000 for members choosing neurocryopreservation.

In the past, Alcor members were not required to pay additional dues or increase their cryopreservation funding when cryopreservation minimums were raised. However, the Alcor board has now chosen this course of action because the number of Alcor members who are underfunded has increased to 526 and the total amount of under-funding has increased to $25,538,708. Members are urged to increase their cryopreservation funding to levels well above the minimum levels of funding, both to strengthen Alcor financially and to help pay for attempts to revive them in the future. The costs of future revival attempts are currently unknown.

Underfunded Alcor members who have chosen to have their whole bodies cryopreserved also have the alternative of switching to neurocryopreservation in order to meet current minimums. Underfunded neurocryopreservation members who do not pay the additional dues or increase their funding to the current minimum will be referred to the Underfunding Committee to attempt to work out a solution to enable them to maintain their Alcor membership. One alternative that may become available to such members is financial help from the Alcor Hardship Fund.

The additional annual membership dues required of underfunded Alcor members will be based upon the following formula: the amount of money the member is underfunded that year will be multiplied by 1%. Thus, if a member is underfunded by $60,000, the amount of additional dues that member will be required to pay over a year will be $600. The normal monthly rate would be 1/12 of 1% of the amount the member is underfunded that year, our example member paying $50.

Additional membership dues for underfunded members will start on September 1, 2013. From September 1, 2013 until December 31, 2013, underfunded members will be required to pay 1/3rd of the normal monthly rate for 4 months. From January 1, 2014 until December 31, 2014, underfunded members will be required to pay 2/3rds of 1% of the amount of their underfunding. From January 1, 2015 and in subsequent years, underfunded members will be required to pay 1% of the amount of their underfunding. The Alcor Board will evaluate the effects of the Underfunding Plan every year and reserves the right to make changes in the plan or eliminate it entirely.


Affected members will receive an invoice for the September through December 2013 dues relating to their underfunding, separate from their regular dues invoice. This bill will be sent in September. Beginning in 2014 and forward, all additional dues will be shown as a separate line on a member’s regular membership dues invoice and billed at the same frequency and date that they are typically billed. All calculated additional dues relating to underfunding will be rounded to the nearest $5 on each invoice.

Life Members will not be charged additional membership dues under the Underfunding Plan unless they request and sign the “Underfunding Plan Opt-In Form” (available to Life Members upon request from Alcor). If you are not a Life Member, do not request or sign this form: your participation in the Underfunding Plan is automatic. Life Members who do not opt-in and are underfunded must increase their cryopreservation funding. The option to pay additional dues in place of ensuring funding at or above minimums is available only to members who joined Alcor on or before May 12, 2013.

Members who have questions or comments about the Underfunding Plan or its implementation should call Max More, CEO and President of Alcor toll-free at 1-877-462-5267, Ext.113 or Bonnie Magee, Finance Director, Ext.114.

NOTE: The details of the Underfunding Plan and the accompanying Committee details have already been emailed to members, and are going in the regular mail today.
Max More, PhD
President & CEO, Alcor Life Extension Foundation
7895 E. Acoma Dr # 110
Scottsdale, AZ 85260
480/905-1906 ext 113

Max.More
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Re: 90-day notice of Underfunding Plan implementation

Post by Max.More » Fri May 24, 2013 1:08 pm

Alcor Underfunding Plan
Version 2.11b-5a
May 4th, 2013

Summary
Underfunded Alcor Members who became Members of Alcor prior to adoption of this Underfunding Plan (“Existing Members who are or become Underfunded”) shall pay Additional Membership Dues, as described herein, in addition to any other applicable Membership Dues, commencing on September 1st, 2013.

Notice of Increase in Minimums

All Alcor Members will be given 90 days written notice, in accordance with their Cryopreservation Agreement or Cryonic Suspension Agreement, that their required minimum funding will now and in the future be the current Required Cryopreservation Funding Minimum for the membership option they have selected (whole body cryopreservation or neurocryopreservation, as appropriate). The current Required Cryopreservation Funding Minimum for whole body cryopreservation is $200,000.00 and the current Required Cryopreservation Funding Minimum for neurocryopreservation is $80,000.00. Alcor will change or increase the current Required Cryopreservation Funding Minimums from time to time, and will give notice to Members of such change or increase. Members with funding at or above their required minimums are not affected by this Notice and need take no immediate action. Underfunded Members may (a) provide increased funding in order to comply with their new minimum funding requirements or (b) take advantage of this Underfunding Plan [FOOTNOTE: Life Members need to explicitly “opt-in” if they wish to benefit from this Underfunding Plan by requesting and signing the appropriate form from Alcor.] or (c) select a less expensive membership option. The Underfunding Plan can be helpful to Members in managing their short term finances. It is not expected to be the most economical method of providing long term funding. Underfunded Members are encouraged to increase their funding to the extent practical. Alcor’s preference is for all its Members to be and remain fully funded.

Annual Underfunding Percentage
The “Annual Underfunding Percentage” will be:
0.33% per year from 9/1/13 until 12/31/13
0.67% per year from 1/1/14 until 1/1/15
1% per year from 1/1/15 until changed by the Board.

Definition of “Underfunding”
If an Alcor Member’s Cryopreservation Funding or Suspension Funding (the “Cryopreservation Fund” or “Suspension Fund” as defined in his or her Cryopreservation Agreement or Cryonic Suspension Agreement) has a funding level below the current Required Cryopreservation Funding Minimum for the membership option he or she has selected then the Member is Underfunded.

Underfunding Plan Unavailable to Members who join after Adoption of The Plan
This Underfunding Plan will not be available to Underfunded Members who become Members of Alcor after the date upon which this Underfunding Plan is first adopted by the Alcor Board of Directors (“Future Underfunded Members”).

Future Underfunded Members who have chosen the whole body option can convert their membership to the neurocryopreservation option. In most cases, such conversion will enable these Members to become fully funded.

Alcor reserves the right (a) to convert Future Underfunded Members who have chosen the whole body option to the neurocryopreservation option or (b) after appropriate warnings, review and notice in accordance with their Cryopreservation Agreement, to terminate their Alcor membership.

Future Underfunded Members who have chosen the neurocryopreservation option will, after appropriate warnings, review and notice in accordance with their Cryopreservation Agreement, have their Alcor membership terminated.

Amount of Additional Dues
Existing Members who are or become Underfunded, unless otherwise exempted by written agreement with Alcor [FOOTNOTE: Life Members are exempted unless they have requested to participate in this Underfunding Plan and have signed the appropriate form, available on request from Alcor.], must periodically pay the additional Membership Dues described herein. The amount of the additional Membership Dues will be computed by multiplying the time-span of the billing period measured in years, times the Annual Underfunding Percentage, times the amount by which he or she is Underfunded at the start of the period (the difference between their Cryopreservation Funding and the appropriate current Required Cryopreservation Funding Minimum).

How paid
The additional Membership Dues will be added to any other applicable Membership Dues and will be paid in the same manner as other Membership Dues. Alcor is continuing the practice of using general funds supported by Membership Dues to offset shortfalls in funding for cryopreservation case expenses and research.

Review of Annual Underfunding Percentage and Underfunding Plan
Each year the Alcor Board will review and possibly adjust the Annual Underfunding Percentage. The Alcor Board reserves the right to change the Underfunding Plan. The Underfunding Plan does not alter or modify the right of Alcor to increase or modify Membership Dues and/or Cryopreservation Funding Minimums and/or “minimum funding” as deemed necessary in the sole discretion of Alcor.

No Windfall Loans
The Underfunding Plan is not intended to permit Members to borrow money using funds intended for their cryopreservation as collateral.

Consequently, if a Member alters his or her funding arrangements in any way in order to reduce his or her Cryopreservation Funding below his or her current Required Cryopreservation Funding Minimum, even if said reduced Cryopreservation Funding remains above the minimum funding required by his or her Cryopreservation Agreement, and the Member has not obtained advance approval in writing from Alcor for this alteration, then Alcor may refuse to accept some or all of any payments the Member might make towards his or her Membership Dues and withdraw some or all of the benefits of the Underfunding Plan.

Consequences of non-payment
Underfunded Members participating in the Underfunding Plan [FOOTNOTE: Life Members who wish to participate in the Underfunding Plan should request, sign and return the appropriate form from Alcor. Participation is required for all other Members unless otherwise exempted by written agreement with Alcor.] who have selected the whole body cryopreservation option who do not pay all their Membership Dues (or are deemed not to have paid all their Membership Dues pursuant to the foregoing “No Windfall Loans” provision), and have not switched to neurocryopreservation will, after appropriate warnings, review and notice in accordance with a Member's Cryopreservation Agreement, be converted to the neurocryopreservation option. The Member’s minimum funding in either his or her revised or new Cryopreservation Agreement following this conversion (as appropriate) should be at least the current Required Cryopreservation Funding Minimum for neurocryopreservation.

Underfunded Members participating in the Underfunding Plan who have selected the neurocryopreservation option or been converted to the neurocryopreservation option and who are not able to pay all their Membership Dues will, after appropriate warnings, review and notice in accordance with their Cryopreservation Agreement, be referred to the Underfunding Committee.

Notice to All Members
Through this Underfunding Plan, Alcor is not altering or changing the terms, conditions or obligations of a Member’s Cryonic Suspension Agreement or Cryopreservation Agreement, and the terms, conditions and obligations of such agreements remain in full force and effect.

By way of example and not of limitation, Alcor reserves the right to modify or increase Membership Dues, and/or Cryopreservation Funding Minimums, and/or the “minimum funding”, either now or in the future, for any individual Member or any group of Members. Alcor also reserves the right to terminate Members who fail to comply with any of the terms or conditions of their Cryonics Suspension Agreement or Cryopreservation Agreement, including failures caused by increases in their Cryopreservation Funding Minimum and/or their “minimum funding.” Alcor further reserves the right to exercise any and all of the existing rights it might have under any and all Agreements it might have with any Member or Members.

Alcor reserves the right to modify this Underfunding Plan, either in part or in whole, including the right to terminate it. Such modifications or termination will not alter or change the terms, conditions or obligations of a Member’s Cryonic Suspension Agreement or Cryopreservation Agreement.
Max More, PhD
President & CEO, Alcor Life Extension Foundation
7895 E. Acoma Dr # 110
Scottsdale, AZ 85260
480/905-1906 ext 113

Max.More
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Re: 90-day notice of Underfunding Plan implementation

Post by Max.More » Fri May 24, 2013 1:10 pm

Alcor Underfunding Committee
Version 2.11b-5a
May 4th, 2013

Underfunding Committee
The Alcor Board of Directors will appoint a committee (the “Underfunding Committee”) comprised of at least one Alcor Board member and at least 2 other Alcor Members, all to serve 2 year terms. Members who face difficulties in increasing their funding or paying their Membership Dues may contact the Underfunding Committee to explore potential solutions. The Underfunding Committee will seek to work proactively and flexibly with these Underfunded Members to attempt to find funding solutions that retain them as Members while ensuring Alcor's long-term financial health. The Underfunding Committee will not be deemed a fiduciary of any Member, but instead a liaison to discuss alternatives, if any, that an Underfunded Member might have to continue membership. The Underfunding Committee will not have any obligation to provide funding to Underfunded Members, and does so at its sole discretion. The Underfunding Committee has no authority to modify the terms of a Member’s agreement with Alcor.

Hardship Fund
The “Hardship Fund” is hereby established and seeded with a $20,000 loan from Alcor’s Reserve Fund to provide financial assistance to Members who cannot pay their Membership Dues due to demonstrated financial hardship, in the sole discretion of the Underfunding Committee. The loan shall be repaid in the event that the Underfunding Committee determines that such repayment can be made without detriment to the purposes of the hardship fund. Suspended Animation, Inc. (“SA”) has agreed to provide field washouts free of charge for cases of Members accepted by the Underfunding Committee. When Alcor receives the benefit of such a free field washout, the funds not paid to Suspended Animation, Inc. will be paid to the Hardship Fund from the CMS Fund (or, if the CMS Fund no longer exists or is no longer used to pay SA for its standby services when it performs a field washout, then from such Fund as is normally used to pay SA for such services). SA’s offer to pay for field washouts for cases of Members accepted by the Underfunding Committee shall be reconsidered by SA on an annual basis.

Decisions with respect to payments from the Hardship Fund will be made by the Underfunding Committee. The Hardship Fund will pay the least part of the additional Membership Dues, caused by the Underfunding Plan, of Members who have selected the neurocryopreservation option, that it determines is reasonably sufficient to allow these Members to meet their obligations. Payment from the Hardship Fund on behalf of a Member in a particular year is not a guarantee of payment in a future year. The Underfunding Committee shall reconsider requests for subsidized payments on an annual basis.

In no event shall the Underfunding Committee authorize a payment in excess of the funds available in the Hardship Fund. The Underfunding Committee will annually evaluate whether total payments and future projected payments will result in the eventual depletion of the Hardship Fund and report this evaluation and their recommendations on how to avoid such depletion to the Board at the annual September Alcor Board meeting.

There is no guarantee that the Hardship Fund or the Underfunding Committee will exist in the future, and any subsidization and/or payments authorized by the Underfunding Committee shall not be construed or deemed a modification of any Member’s agreement with Alcor. The Hardship Fund and the Underfunding Committee are independent and separate from any agreement between a Member and Alcor. Neither the establishment of the Underfunding Committee or the Hardship Fund will be deemed a modification to the agreement between a Member and Alcor.

Donations to the Hardship Fund
The Hardship Fund shall be described, as appropriate, in fund-raising materials as an Alcor fund available for directed donation.

Purpose
Subject to the foregoing terms, the Hardship Fund is intended to provide relief to Neurocryopreservation Members who are unable to pay their Membership Dues because of increases in their minimum required amount of funding. Alcor expects to continue previous policies with regard to non-payment of dues for other reasons or non-payment of CMS fees, including but not limited to cancellation of membership in accordance with the terms of a Member’s Cryopreservation Agreement or Cryonic Suspension Agreement. In addition, the Hardship Fund is not intended to be a substitute for maintaining “minimum funding” as defined in a Member’s Cryopreservation Agreement or Cryonic Suspension Agreement that was required when the Member first joined Alcor; Alcor expects to continue previous policies with regard to minimum funding, including but not limited to cancellation in accordance with the terms of a Member’s Cryopreservation Agreement. For example, a Member whose life insurance policy has been canceled cannot simply pay increased Membership Dues to avoid cancelation of his or her Membership.
Max More, PhD
President & CEO, Alcor Life Extension Foundation
7895 E. Acoma Dr # 110
Scottsdale, AZ 85260
480/905-1906 ext 113

Andrew
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Re: 90-day notice of Underfunding Plan implementation

Post by Andrew » Sun Jun 02, 2013 8:54 pm

As an Alcor member, and a new one at that. I can't see an easy way around raising the premium on the underfunded. I don't like it, but what else can be done?

When I signed up for life insurance, which I would never have done if not for the need to pay for cryonics, I was amazed that I could pay for my suspension easier through insurance than saving money. Part of the reason for this is monetary inflation eats up savings, and $1 (or $100,000) won't be worth in 30 years what it is now.
Then again, the resources I will use when I am suspended will have to be paid for in the future...

Should Alcor set a higher suspension cost from the outset? That's not a challenge. I know Alcor has provided financial information publicly and the board thinks about this much more than I have. I'm funded above minimum because advice from Alcor suggested it, and my life insurance agent suggested it. Is it enough though?

I know there is no crystal ball here and I think this move is really encouraging, and the hardship fund is a smart thing to have in place. I wonder what fellow Alcor members think about this decision and this funding issue.

criley
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Re: 90-day notice of Underfunding Plan implementation

Post by criley » Mon Jun 03, 2013 9:38 am

Right now I think the smart way is the way they are doing it, that is to encourage people to over fund their insurance now because as you said with inflation, prices will continue to rise over the long term.

I don't see a way around raising minimums for the underfunded either and it seems as if the Board has done a good job weighing the pros and cons of each. Without a huge donation I am not sure what the alternative is.

Andrew wrote:As an Alcor member, and a new one at that. I can't see an easy way around raising the premium on the underfunded. I don't like it, but what else can be done?

When I signed up for life insurance, which I would never have done if not for the need to pay for cryonics, I was amazed that I could pay for my suspension easier through insurance than saving money. Part of the reason for this is monetary inflation eats up savings, and $1 (or $100,000) won't be worth in 30 years what it is now.
Then again, the resources I will use when I am suspended will have to be paid for in the future...

Should Alcor set a higher suspension cost from the outset? That's not a challenge. I know Alcor has provided financial information publicly and the board thinks about this much more than I have. I'm funded above minimum because advice from Alcor suggested it, and my life insurance agent suggested it. Is it enough though?

I know there is no crystal ball here and I think this move is really encouraging, and the hardship fund is a smart thing to have in place. I wonder what fellow Alcor members think about this decision and this funding issue.

TDK
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Re: 90-day notice of Underfunding Plan implementation

Post by TDK » Tue Jun 04, 2013 9:27 pm

I agree, but I would like to see the yearly membership fees go down, or else we risk losing members, and failing to gain new members, due to the cost... I see companies raise prices, and decide to keep prices high, because people grudgingly pay. But the customers are not happy. And that means you risk those people leaving for an alternate cryonics company. If the rates are fair, and reasonable, no one complains, no one leaves, and we encourage other people to join because we think it has great service for the value. That's no longer the case. It's now something that is cool, and really amazing, but out of the price range of most "average" people. And that sucks, because anyone who has the vision to see cryonics as valid, should be able to become a member without seeing the cost as prohibitive. I'd actually prefer to see all the operating "membership" costs absorbed into the life-insurance amount. If you pay $1000/year for 50 years, then make people get $50k extra in life insurance, and don't charge them any yearly membership fees. If people just had to pay their monthly life insurance fees, that would make it much more appealing to potential new members.

criley
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Re: 90-day notice of Underfunding Plan implementation

Post by criley » Fri Jun 07, 2013 2:27 pm

I agree with the sentiment, but it seems like a catch-22. If you were to just fund via insurance, what happens in the years when there are few new patients. It makes it much more volatile in terms of revenue. If you get a large enough base like an insurance company, they can say "out of our 100,000 customers there will be 87.5 +/- 6 deaths per year" (or whatever).

It is tough to get over that hump though without raising funds to cover operating expenses during the lean times.

:-)

TDK wrote:I agree, but I would like to see the yearly membership fees go down, or else we risk losing members, and failing to gain new members, due to the cost... I see companies raise prices, and decide to keep prices high, because people grudgingly pay. But the customers are not happy. And that means you risk those people leaving for an alternate cryonics company. If the rates are fair, and reasonable, no one complains, no one leaves, and we encourage other people to join because we think it has great service for the value. That's no longer the case. It's now something that is cool, and really amazing, but out of the price range of most "average" people. And that sucks, because anyone who has the vision to see cryonics as valid, should be able to become a member without seeing the cost as prohibitive. I'd actually prefer to see all the operating "membership" costs absorbed into the life-insurance amount. If you pay $1000/year for 50 years, then make people get $50k extra in life insurance, and don't charge them any yearly membership fees. If people just had to pay their monthly life insurance fees, that would make it much more appealing to potential new members.

Andrew
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Re: 90-day notice of Underfunding Plan implementation

Post by Andrew » Sat Jun 08, 2013 3:44 pm

http://www.alcor.org/Library/html/suspe ... lures.html
The above appeared in a 1992 edition of Cryonics. As it's title suggests, it documents efforts made by an early cryonic movement which tragically failed to achieve its goals. Often, the problem was financial.

I feel we owe a debt to cryonic organizations that came before, not just because they showed how not to proceed (which is in itself valuable), but also because their failure supplies us with a great energy to succeed, an undeniable drive, maybe even an unresolved sense of culpability that needs an answer. As if we must make it work, not just for our sakes and future generations but also in the name of those who had the same vision, based in science, reason, and compassion, but, in the end, were lost. As if that loss can't be in vain.

Often success is preceded by failure. Wise people have said that precedent failure is even required for eventual success. The current cryonics movement is required to succeed. Hopefully cost issues will lessen with an economy of scale as the cryonics movement grows. Until then, if increases in financial requirements are unavoidable in order to keep Alcor financially strong then they must be made. Needless to say the financial failure of the past cannot be repeated. Maybe this is preaching to the choir. It does sound a little preachy. Still.

TDK
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Re: 90-day notice of Underfunding Plan implementation

Post by TDK » Mon Jun 10, 2013 7:22 pm

I absolutely think Alcor needs to address the underfunding issues.
And I think the way they are handling it seems to be a pretty reasonable option.

But I worry that the dues increases to new and existing members have the
potential to reduce growth of the organization.

I prefer to look at it in terms of most people's average monthly
expenses. What can the *average* American afford? I am not talking
about people who are pulling in $70k or $100k per year. I am talking
about the median income in America. Which right now, is around $25k
per person. $50k per household. You have to put that into a monthly
basis, and figure the cost of rent, food, car payments, credit card debt,
and all the other stuff. When you get around to the amount of disposable
income most families have, spending so much on cryonics is pretty
difficult for most of them to do, even if they are interested.

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Re: 90-day notice of Underfunding Plan implementation

Post by Merkle » Fri Aug 09, 2013 3:20 am

Some reduction in dues paid for with an increase in cryopreservation minimums looks interesting.

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