HomeMy WebLinkAbout03. (Handout)CHand"
Central Contra Costa Sanitary District
July 12, 2011
Jeffrey, C. Chang
Kenneth W. Ruthenberg, Jr.
1. A labor negotiation process that obtains
employee acceptance and maintains
employee self -worth and respect.
2. A labor agreement that would maintain
public acceptance and support.
3. A financially sustainable retirement plan
that balances the needs and impacts
between employees receiving pension
payments and health benefits and the cost
to the public.
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• Develops a sound understanding of the
current situation
• Combines careful legal and financial analysis
of what can and cannot be done
• Includes comparative employer benchmarking
• Draws input from and provides education for
stakeholders
• Results in a sustainable benefits plan that
balances employee needs with sound fiscal
practice
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• Generally the capacity to make actuarially
required contributions on a consistent,
ongoing basis without sacrificing a publicly
acceptable level of service
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• Analyze:
— Current costs and unfunded liability for
the benefits already promised
—How such costs and liabilities will
change over time
—What level of benefits are needed, in
view of the entire compensation
package, to attract/retain employees
needed to fulfill the District's mission
• Determine whether:
— Current/projected benefit costs or
liabilities are preventing or will prevent
the District from fulfilling its mission
—A lower (if necessary) benefit cost or
liability could be achieved through plan
redesign without causing unacceptable
hardships to employees or retirees
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• What are the reasons for making the
change?
• How much in costs or liabilities must be
reduced /saved?
• Are the benefits bargained for and what is
the current negotiating posture?
• What are the legal bases for the existing
benefits?
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• Will the new level of benefits attract and
retrain the skilled, necessary personnel?
• How will employees at or near retirement
be affected by any proposals?
• How will you manage expectations of
employees and the public?
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• Spiking is contrary to the actuarial and
funding assumptions used by the plan (you
didn't save for it)
• These practices undermine the public's
trust in the system and in the District
• Regardless of passage, we would
recommend evaluation of whether any
District pension /payroll practices could be
viewed as "spiking," and look at ways to
curtail this activity
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• Are other similar agencies currently
increasing benefits, offering significantly
better benefits, or in greater hiring modes?
• What about other employers who compete
for individuals the District would like to
attract and retain?
• What else does the District offer that makes
it a desirable employer?
• Are you benchmarking retirement benefits
only?
• Or are you considering other factors that
employees value?
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• Evaluate and assign a monetary value to all
of the benefits the District provides so that
all stakeholders have an accurate picture of
true costs
— Allows for better negotiation of incremental
changes or trade -offs
— Communicate the total compensation
package to your employees and
prospective employees
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• Inventory and reevaluate whether certain
benefits (e.g., PTO, benefits in lieu, payment
of member contributions) are no longer normal
or justified in this new environment
• Analyze the extent to which cost shifting may
be possible or savings may be generated for
employees with working spouses
• Consider reducing benefit obligations by
offering certain early retirement incentives
V
• What are Board members' concerns, level
of knowledge of the legal /financial specifics,
goals for services to constituents, goals for
employees, knowledge of how your benefits
compare with the benefits of competitors for
your workforce,...?
• Develop program of education coupled with
an overall process that addresses their
specific concerns and goals
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• Sanitary District — Advised on ability to
make further changes to CalPERS health
and retiree health benefits
• Healthcare District — Advised and assisted
in migration from a defined benefit pension
to a defined contribution pension
• City — Advised with respect to the manner
in which it had negotiated certain pension
and retiree health benefit changes
• City — Advised with respect to the tax
treatment of various benefit changes and
the legal issues arising in connection with
certain retiree health changes
• Special District — Assisted in evaluating
range of possible benefit changes to reduce
overall costs and liabilities
FA
• Several Cities And Districts — Assisted in
understanding how policies permitting the
cash -out of paid time off created an income
tax problem for both employers and
employees; advised how those policies
could be changed to avoid such results in
the future (to include using those funds to
provide enhanced retirement benefits
instead of current taxable income)
Questions?
Jeffrey C. Chang
jcc @seethebenefits.com
Kenneth W. Ruthenberg, Jr.
kwr @seethebenefits.com
(916) 357 -5660