Editorial: Employee Retirement Benefits Should Remain Unchanged

By / Editorials / Wednesday, 17 June 2015 04:00

By WILLARD KILLOUGH III
Managing Editor

The Carolina Beach Town Council recently adopted a balanced budget for the 2015-2016 fiscal year starting July 1st.
They did not take action on changes to employee retirement benefits.
They will discuss that issue in more detail at their upcoming June 23rd, workshop meeting at 6PM at Town Hall in the Council meeting room.
Evidently this issue was first proposed to the Town Council back in April of this year.
In a presentation given April 28th, it was stated, "Other Post Employment Benefits (OPEB) liability is actuarially calculated for the Town approximately every three years by outside, independent auditors."
The presentation given by the Town's Human Resources Officer Holly Brooks said they anticipated a large increase over the previous figure estimated in 2012 of $348,083. In the presentation it stated, "This liability will continue to grow as employees continue to accrue years of service under the current schedule of post retirement benefits as outlined in the Personnel Policy Manual" and, "Making a change to post retirement benefits offered will curtail the growth of the OPEB liability and associated employee benefit expense."
Some of the recommendations made included, "Any employee hired after 06/30/2015 not be eligible to accrue any time towards a retiree health insurance benefit" and, "Terminate offering a Medicare Supplement policy to any retiree except those currently enrolled in the Medicare Supplement policy. Over time this plan dwindles down in participants until it no longer exists."
Another recommendation was, "Consider review of motion approved by Council in 2000 allowing a select list of Volunteer Firefighters to receive reimbursement for health insurance" and, "Request legal council to determine the OPEB liability and future vested rights, if any, of the 19 Volunteer Firefighters identified in the 2000 Council approved motion. This outcome of this motion is not currently included any OPEB liability or costs."
In a later document available on the Town's website it stated:

• Effective July 1, 2015 - Freeze Future Health Care Benefit. Only those employees hired prior to July 1, 2015 would be eligible to accrue service time toward post-employment health and/or dental insurance.

• Effective July 1, 2015 – Freeze current dependents covered. Any employee that meets the criteria for benefits continuation at retirement will only be eligible to continue health and/or dental insurance on themselves. No dependents can be covered in retirement. Freeze the current dependents covered.
• Effective July 1, 2015 – New Employer and Drop Coverage. A person who retirees from the Town must take health insurance if offered by a new primary employer. The retiree
would not be eligible for any type of financial reimbursement from the Town for enrolling in a health plan sponsored by a primary employer.
• Effective July 1, 2015 - Freeze Medicare Supplement Benefit. Only those over age 65 retirees currently enrolled in the BCBS Medicare Supplement plan will be allowed to remain in the BCBS (Blue Cross Blue Shield) Medicare Supplement Plan/RX Plan. Any retiree that attains Normal Social Security Retirement Age after July 1, 2015 and/or otherwise becomes eligible for Medicare will no longer receive a medical insurance type benefit from the Town.

First of all, it's my understanding that many of the employees had no clue this change was coming. I asked a retired firefighter the other day about any changes and they said "no". I'm aware of some retired employees who are not "over age 65 retirees" and they bad been looking into the situation. I certainly hope the Council clears up this issue at their June 23rd, meeting in order to put employees minds at ease.
Long time and currently retired employees have planned their retirement based on what the Town promised them.
Freezing such benefits for new hires is perfectly fine, but It may make the benefits package less appealing to experienced job seekers. Yet that's not the issue. The issue is, making sure those who have worked long and hard to serve our great community are taken care of appropriately. Council should help inform the employees and retirees and then make themselves available to hear input directly from them before making a final decision.

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