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Council eyes adjusting retirement health benefits

By NATHAN BRUTTELL
Today's News-Herald
Published Monday, November 9, 2009 9:36 PM MST

The city is set to pay $1,000 each to several employees hired between July 2004 and June 2005 according to an agreed defined contribution plan.

City Council and staff will discuss the potential fiscal impact at a public hearing today during the council’s work session. The proposed plan will contribute $1,000 into each employee’s account every year that can be used for healthcare expenses after retirement, provided the employee has worked at least five years with the city. Employees hired before July 2004 are subject to a former defined benefit program that pays up to 100 percent of premium health care costs to the employee and up to 50 percent for dependents.

The Employee Benefits Trust found the former program, first established in 1995, that future costs would’ve risen 10-fold during the next 10 years and rise to about $17 million annually by 2023.

“Because the increased level of contributions would be detrimental to the continued financial health of the city, the retiree medical plan was revised in May 2004,” City Finacne Director Gayle Whittle wrote in communication to City Council. “This effectively limited the liability from growing to unaffordable levels and reduced the estimated yearly expense by one-third by the year 2023.”

The revised plan then took effect July 2004 and required employees to contribute five years with the city. The first group of employees under the new plan is set to receive contributions this year. As long as the employee remains with the city, 20 percent will be vested to the account for five years, according to city documents. If an employee leaves before the end of 10 years, any amount not vested would return to the city.

Whittle said staff is prepared to enter into an agreement, following a successful proposal, for adoption during the next City Council meeting.

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Comments (6 comment(s))

Rosie wrote on Nov 16, 2009 12:36 PM:

" What do you consider longterm? Nowadays, youngsters can't seem to keep a job for very long because they feel mistreated! "

MN wrote on Nov 15, 2009 5:19 AM:

" When YOU apply for a job, don't YOU look for one with benefits?? You are a fool if you don't. All government jobs and most private employers offer benefits. If Obama has his way, employers that don't offer health insurance will get fined..hahaha..now that will solve everything..not! They will just not hire as many people.Way to help the unemployment! "

Hidija wrote on Nov 10, 2009 11:53 AM:

" Five years??? Please, those kind of benefits whould be for long time employee's, not just for someone who takes a job with the City to get Health Insurance after 5 years for life! No wonder our Cities and States are all going broke! "

gatekeeper wrote on Nov 10, 2009 2:08 AM:

" Isnt the benefit of government jobs just as mentioned, the benefits? If the benefit packages are sub-standard, then some will go elsewhere or apply to the private sector. "

dunhavasu wrote on Nov 9, 2009 10:41 PM:

" Must be nice to have a job and health insurence "

Desertrat wrote on Nov 9, 2009 9:49 PM:

" I blame the PD, FD, City Council, Mayor, Chamber, CVB, School District, Hospital, Courts, Government, City Workers, Post Office et al. for ALL of it! "

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