Change in Retirement Benefit

GeorgeAndGracie

Our organization (school district) changed the retirement benefits for its teachers through the union negotiation process. Other non-union employees, (not teachers) had one of the same retirement benefits as the teachers (specifically a one-time 1/2 annual salary payoff upon separation after 20 years of employment). The school district is eliminating that benefit for the other employees as well. I am wondering if there are legal ramifications about changing the retirement benefits of current employees that we are not taking into consideration.

Shadowfax

Changing the benefits of current employees is pretty straightforward: if union, negotiate; if non-union, implement. Obviously one shoud be a bit more sensitive, but at least you meet the minimum legal threshold acting that way. The bigger question is changing benefits for retirees. If retirees are still represented via their union, then you're ok. If they are not, as is the case in most municipal corps (I believe) then the issue is who represents them, if indeed they are entitled to representation. Our county recently drastically changed all retirees health benefits. They sued. The Michigan courts say there is no contractual obligation to a retiree, regardless of the terms under which he retired, and the county is entitled to do whatever it wants. That make eminent fiscal sense; in terms of fairness, it is an outrage.

pork1

[font size="1" color="#FF0000"]LAST EDITED ON 10-19-05 AT 03:00PM (CST)[/font][br][br]You are absolutely right it is an outrage, but good business sense.

When I entered the military service medical care for my family and myself was a given after retirement. It requires me to pay a premium for coverage, which I have always done; however, during my years of service our pay scale was always bounced off of the current cost of living and then reduced to compensate for the benefit services available after retirement including the VA. Well I am here now and none of those promises for cutting pay raises and increases to proposed wage scales based on cost of living expenses are here.

City government, county government, state government and the Federal government can do what they want or need to do in order to keep the cost of governing as low as possible. But grand fathering those who have given their all for the population at large is also important.

I recommend that you hire a risk and effective management person and have them ride around and watch for government abuse. It does not take 4 men and a backhoe with a driver to dig a ditch or a hole in the ground. nor is it necessary to stand there and watch a busted water line until someone bothers to shut down the systems network. It does not take a driver and two passengers riding around in a city truck looking for whatever and wasting time.

These are monies that could be used to support the grandfathered retirees. After all, it is a known truth that retirees loose their lives earlier than otherwise, if they are not gainfully employed. Ask and you will find that city/county retirees like military retirees die faster than their own peer groups.

I hope you and the city/county government will find a way to take care of the deserving, at least help them secure medical coverage until they reach 65 which is what the military is now doing. My Medicare Card is now in my possession and I will start making premium payments in December 2005. I am not elgible for full SS retirment until 65 + 9 months.

PORK

Hunter1

Probably controlled by state law or case law in your state. In WI, there is recent case law which says you cannot do what you just did to your non-rep employees. What it basically says is that once an employee 'vests' this benefit (it doesn't have to say somewhere that the employee vests), you cannot just take it away. If the employee in this case already has 20 years of service, he/she is vested in this benefit and you cannot just take it away. As to new employees, or those who don't have the 20 years, you can change their benefit. But, all this is WI, check the status of case law in your state. In WI, we have very active public sector employees who will sue their employers over practically any reduction in benefits

PORK: There certainly is waste in government, local as well as state and federal, but I don't buy into all of your characterizations of public employees. Our city has grown from 18,000 to 30,000 in the 24 years I've been here, and we have cut the size of our Public Works Department from 68 employees to 45. We don't have three people riding around in a truck looking for something to do. While the size of the city has grown by 2/3, the size of our workforce has grown by 1/3 and most of that growth has been in protective services. (By the way, not justified in my mind, but strongly backed by our politicians)
I believe strongly in providing the benefits you promise to retirees, but I think you have to be careful in what you do promise.