Human Resources Minutes 4-15-20 with Attachments<\/a><\/p>\nTo read the minutes, please open or download the pdf from the link above, or you may see more below.<\/p>\n
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Brunswick-Glynn County Joint Water & Sewer Commission<\/strong><\/p>\n1703 Gloucester Street, Brunswick, GA 31520<\/strong><\/p>\nCommission Meeting Room<\/strong><\/p>\nWednesday, April 15, 2020 at 10:00 AM<\/strong>\u00a0<\/strong><\/p>\nHUMAN RESOURCES COMMITTEE<\/strong><\/h2>\nWORKSHOP MINUTES<\/strong>\u00a0<\/strong><\/p>\nPRESENT: \u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/p>\nDonald Elliott, Committee Chairman<\/strong><\/p>\nCornell Harvey, Commissioner\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/p>\nWayne Neal, Commissioner<\/strong><\/p>\nAndrew Burroughs, Executive Director<\/strong><\/p>\nALSO PRESENT: \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/p>\nBen Turnipseed, Commission Chairman<\/strong><\/p>\nCharles Cook, Commissioner<\/strong><\/p>\n\u00a0John Donaghy, Director of Finance<\/strong><\/p>\nLaDonnah Roberts, Senior Financial Analyst<\/strong><\/p>\nCatina Tindall, First Coast Benefits Solutions, Inc.<\/strong><\/p>\nDaphne Gable, Teamwork Services Inc.<\/strong><\/p>\nJanice Meridith, Exec. Commission Administrator<\/strong>\u00a0<\/strong><\/p>\nMEDIA:\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/p>\nMedia Present – None<\/strong>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0<\/strong><\/p>\nChairman Elliott called the workshop to order at 10:00 AM.<\/p>\n
\u00a0<\/strong>PUBLIC COMMENT PERIOD<\/strong><\/p>\nThere being no citizens that wished to address the Committee, Chairman Elliott closed the Public Comment Period.\u00a0<\/strong><\/p>\nAPPROVAL<\/strong><\/p>\n\n- Minutes from March 5, 2020 Human Resources Committee Meeting<\/strong><\/li>\n<\/ol>\n
Commissioner Harvey made a motion seconded by Commissioner Neal to move to approve the minutes from the March 5, 2020 Human Resources Committee Meeting.\u00a0 Motion carried 3-0-0.<\/u>\u00a0<\/strong><\/p>\nDISCUSSION<\/strong><\/p>\n\n- Self-Funded Health Insurance Proposal <\/strong>\u2013 C. Tindall<\/li>\n<\/ol>\n
Catina Tindall indicated there is a vast amount of information regarding self-funded health insurance, that at this meeting she will be providing highlights to the Commissioners, and she will be available to return to provide more information and discussions.\u00a0 Next she gave responses to questions that were asked at the previous meeting.\u00a0 Commissioner Neal had asked her to discuss with the County what they are currently doing with their Wellness Plan.\u00a0 The county representative Ms. Tindall spoke with advised that: participation in the Glynn County Wellness Plan is not mandatory for their employees; a very good discount is offered if the employees do go through their Wellness Plan; every county employee is tested for tobacco use every year regardless whether they use tobacco or not, as well as their adult dependents over 18 year of age; the cost for the tobacco testing is between $40 to $60 and is paid by the county; and, BMI checks are not charged for.\u00a0 Commissioner Duncan previously asked about discussing level-funding.\u00a0 Ms. Tindall explained that level funding is in between self-funding and fully-funding.\u00a0 When there is a good claims year, the insurance company is going to split and give a rebate based on the claims.\u00a0 If JWSC chose to quote level-funding, this would have to wait until March 2021.\u00a0 Additionally she noted that self-funding has at least a 3 to 5 year commitment.\u00a0 At the previous meeting, Commissioner Elliott requested Ms. Tindall to provide the numbers for JWSC\u2019s health insurance enrollment in the plans for the years of 2019 and 2020, of which she did provide to him.<\/p>\n
Ms. Tindall proceeded to review the recent changes that were made to JWSC\u2019s health insurance plans, and then reviewed fully-funded and self-funded plans.\u00a0 With fully-funding the organization pays the bill and the insurance pays the claims.\u00a0 With self-funding the organization pays the claims.\u00a0 There will always be a cost incurred for administration and a cost for re-insurance with either type of plan.\u00a0 With self-funding, once the claims have hit a certain level the insurance company will pick up the cost of claims from there, which allows the organization to better know what the possible risks may be.\u00a0 Ms. Tindall reviewed the pros and cons of the two types of plans.\u00a0 With the fully-funded plan JWSC currently has very low risk, purchasing from insurance company JWSC pays the bill with no balances left on the bills, the budget is predictable, the plan is not volatile, employers know the cost in advance, JWSC is not responsible for any run-out claims, any claims received after 12 months are still going to be covered even if the policy cancels, the carrier assumes all the risk, but JWSC has little control and premium cost may be higher, the potential low renewals are based on low claims which may cause no or little increase in the renewal costs. She noted that with self-funding there will be an increase seen every year due to the organization acting as the insurance company and paying the claims.\u00a0 Flat renewals are only available with fully-funded plans. The cons of the fully-funded plan are the cost is higher, there is no rebate or return of premium with the good claims year, lack of flexibility on plan design, the carrier uses past claims experience to determine future rates, premium payments do not reflect real time changes, and administration and insurance profit costs are higher. Ms. Tindall then reviewed the pros and cons of the self-funded plan. The pros were listed as a higher risk but with a greater potential for reward and cost savings, JWSC pays all of the claims up to the Stop-Loss period, in a bad claims year JWSC would pay more if they were fully-insured and in a good claims year JWSC experiences immediate savings by lowering the cost (paying less in claims), there are pharmacy rebates and JWSC would get 80% of the savings and the insurance company would get 20%, the renewals and administration will go up annually, the renewals for stop-loss are about 25 or 30 the second year.\u00a0 Savings will be found in the lower paid claims versus the higher fully-funded plan.\u00a0 The cons of the self-insured plan are that United Health care was the only carrier that would offer JWSC a reinsurance option due to the previous high claims, and if those high claims hit again, JWSC would be incurring a loss and if they did, JWSC would be spending more than they would have on the fully funded plan.\u00a0 Moving to a self-insured plan is a 3 to 5 year commitment, the employer assumes all the risk with the stop-loss insurance providing financial protection against catastrophic claims, the first year of the claims are going to be immature, there will constantly be cash moving out of this account paying claims every week, a separate fund has to be set up and funded, and the likely toughest thing is the JWSC will not know what the claims are going to look like.\u00a0 It was mentioned that the insurance will likely go up in the next year due to the Covid 19 Pandemic which will become a part of the trend that insurance companies will look at next year.\u00a0 \u00a0Ms. Tindall will provide an e-mail to the Commissioners containing all of the details of this discussion for their consideration. Ms. Tindall then proceeded to review and explain four pages of charts with numeric data, examples, United Healthcare Medical Plan Design and Fee Detail for a self-funded program based on the same three plans as currently provided to JWSC employees, optional coverages to be considered, and examples\/exhibits of proposals for 2020 and 2021.\u00a0 Commissioner Harvey requested Ms. Tindall to provide the past five years of JWSC claims to help give the Commissioners an idea of the trends during that time.\u00a0 Commissioner Elliott request she provide those prior five years, plus an anticipated next five years of future expectations to provide a model of an anticipated ten year trend of JWSC claims.\u00a0 Ms. Tindall will prepare the requested information for the next workshop on this subject matter.\u00a0 Commissioner Elliott suggested that all of the data and information should be given to the staff for their review and presentation of their recommendation on going to self-funding and present how they would manage the program and time schedule that would have to be devoted to it.\u00a0 All will reconvene for another workshop after all is ready for presentation to the Commissioners.<\/p>\n
\n- 2. Pension Plan Changes<\/strong> \u2013 A. Burroughs<\/li>\n<\/ol>\n
Mr. Burroughs first presented four options for Pension Plan changes: (1) Maintain current pension format; (2) Grandfather all existing employees into the current plan and move new employees to a Defined Contribution Plan with GMA, currently GMA is the one who administers our program; (3) Grandfather all the employees who are currently vested in the existing plan, and move everybody that is not vested to a Defined Contribution; and (4) Also, on the second two options we could make changes and then contribute additional money to lower the unfunded portion down quicker.\u00a0 Mr. Burroughs then explained the existing plan format.\u00a0 JWSC contributes 6% of covered payroll to the pension annually; so 6% plus what is paid to the amortization of the unfunded liability, which is currently $207,000 per year on top of the 6% of payroll.<\/p>\n
Mr. Burroughs presented a chart projecting future costs to JWSC if the existing plan format is maintained.\u00a0 He noted that the dollar amounts shown assume that the $207,000 is paid for the next 14.5 years, which is what the amortization schedule is, and he also based the numbers on a 2% salary increase every year at the existing staff level.\u00a0 This allowed him to use those amounts to make some projections of the costs to JWSC as follows: (1) Year 2020 = JWSC Cost $560,400; (2) Year 2030 (Proj) = JWSC Cost $783,463; (3) Year 2040 (Proj) = JWSC Cost $687,589; (4) Year 2050 (Proj) = JWSC Cost $835,521.\u00a0 The pros to maintaining the existing format is that it requires no changes to be made on JWSC\u2019s part and it is administrated very simply.\u00a0 The cons are that it is the most expensive option and JWSC will be unlikely to be able to contribute any funds to pay-off that unfunded liability any quicker.<\/p>\n
The second chart Mr. Burroughs presented projected the costs to JWSC if the existing employees are grandfathered in to the current plan, and only new employees are moved to a Defined Contribution Plan.\u00a0 He noted that there are 151 active participants now in the pension program.\u00a0 New employees starting on July 1, 2020 would participate in the Defined Contribution Plan with GMA.\u00a0 JWSC would continue contributing 6% for the existing employees (Tier I) and 3% for the new employees (Tier II) after July 1, 2020, and the new employees would also contribute 3% of their pay to make up that gap.\u00a0 JWSC will still be responsible for paying off the unfunded portion at $207,000 per year.\u00a0 It will also be recommended that Tier II have a 10 year vesting schedule, and Tier I would remain on the current schedule of becoming partially vested after 3 years and fully vested after 5 years. \u00a0The pros of this option are that it would boost the morale of existing staff, and it will lower the cost to JWSC.\u00a0 The cons are that JWSC could be paying into Tier I pension for 30 more years, and this option doesn\u2019t save the maximum cost for JWSC.\u00a0 The projections for costs with this option to JWSC were as follows: (1) Year 2020 = JWSC Cost $560,400; (2) Year 2030 (Proj) = JWSC Cost $509,106; (3) Year 2040 (Proj) = JWSC Cost $355,254; (4) Year 2050 (Proj) = JWSC Cost $421,050.<\/p>\n
The third chart presented the projected costs to JWSC if the currently vested employees (Tier I) are grandfathered in, and everyone else (Tier II) is moved to a Defined Contribution Plan.\u00a0 JWSC would contribute 6% of covered payroll for Tier I staff and 3% for Tier II staff.\u00a0 Tier II staff will contribute 3% of their salary to the Defined Contribution Plan and will also incur a 10 year vesting period.\u00a0 Mr. Burroughs advised that there are currently 103 vested employees and 48 employees who are not vested; those 48 will be shifted to the 3% contribution and 10 year vesting period.\u00a0 He also noted that this is the option with the greatest savings to JWSC (the pro), however it is not as much as one might expect since the number of vested employees is about 65% and that limits the overall savings (the cons).\u00a0\u00a0 The projections for costs with this option to JWSC were as follows: (1) Year 2020 = JWSC Cost $560,400; (2) Year 2030 (Proj) = JWSC Cost $493,098; (3) Year 2040 (Proj) = JWSC Cost $351,453; (4) Year 2050 (Proj) = JWSC Cost $420,149.<\/p>\n
Mr. Burroughs then addressed the unfunded liability and commented that this unfunded portion can be reduced with either of the two last options presented.\u00a0 The current unfunded liability is $1,923,597, and the current amortization is 14.48 years at $206,797 per year on top of the long term required payments of 6%.\u00a0 He the provided that JWSC could potentially take the savings options, and see immediate savings by going to either of the new plans and still take a savings off of what we would be paying with the existing plan 5% a year and make that gap up on the unfunded quicker.\u00a0 So for example in year 5 the current plan is projected to cost JWSC $732,522; 95% of that is $695,896; the projected for option 2 as presented is $590,008 and you would be adding an extra $105,888 to the unfunded. Instead of paying it off in 14.5 years you are paying it off in 8 years.\u00a0 That would allow that savings with that unfunded portion going down to be realized more quickly.\u00a0 That unfunded is assuming a 7.5% rate of return for GMA which they have hit for 3 to 4 years in a row, we don\u2019t know what it will be this year, but over the long haul they have been able to hit 7.5% fairly consistently.\u00a0 But if it came out to be a 5% or so, all of the numbers as presented would be adjusted proportionately.<\/p>\n
Commissioner Neal asked what percent JWSC is funded at now, and Mr. Burroughs responded 76%, and added that the 76% funded on everything could be looked at in multiple ways, but on an ongoing basis for which we are 97% funded. He commented that essentially if we continue making our payments we will be funded assuming we continue making the payments, but if we stop all the vested payments now, in everything we are about 76% funded.\u00a0 Mr. Burroughs then addressed Commissioner Neal\u2019s question from the last meeting of, \u201cWhat happens if we freeze the existing pension and move everyone to a plan similar to a 401K type plan?\u201d\u00a0 For these numbers the assumption would be that we would still contribute 3% and take 3% from the employees\u2019 salaries on a 401K auto draft as a match.\u00a0 Mr. Burroughs then referred back to the example chart for grandfathering in the vested employees and moving everyone else to Defined Contribution and stated that if that did occur what would happen is for those 103 vested employees their 3% would not be included in that \u201cspent\u201d every year which would save you an additional $243,000 a year.\u00a0 You would still have to pay off the unfunded portion of the existing pension program, so you would still be paying the $207,000 for the next 14.5 years, if you stopped it today, but you would save the 3%.\u00a0 Commissioner Neal said that he had understood that JWSC would have to pay the unfunded balance immediately.\u00a0 Mr. Burroughs commented that was not what he had been told, but if we had to pay the balance of $1.9M, we could take that out of reserves but I would not recommend taking that out of reserves and setting up a health care reserve all in the same year, but it could be done.\u00a0 Commissioner Neal commented that he has tried to become educated on pensions outside of our County staff and JWSC staff, just trying to get an unbiased education on it.\u00a0 To your credit and to the County\u2019s credit, the reports we got back were pretty much in line with what you have been presenting, so that was refreshing to hear.\u00a0 Mr. Burroughs provided that if the current pension plan was frozen and JWSC went to the 401K style that eliminates the vesting portion of this and once that money goes to the person\u2019s 401K, they\u2019ve got it.\u00a0 As was stated before, only 20% of our people make it 10 years; so 80% of the money that you would be paying out if you went to the 401K instead of going to a 10 year vesting period, would be leaving for people who were never going to retire from here.\u00a0 You would be basically knowing your pay isn\u2019t too much because people aren\u2019t going to be there. \u00a0So, that\u2019s $191,000 per year if you assume the 20%, meaning $191,000 per year that you would be paying that would be leaving every year for people that would be leaving the organization.\u00a0 Commissioner Elliott commented that also you don\u2019t incentivize people to remain with the organization.\u00a0 Mr. Burroughs provided that on the vesting, currently we begin vesting in 3 years; only 51% of the people we hire make it 3 years, so 1 out of every 2 that come in the door is going to be at least partially vested in the current plan.\u00a0 He added employees get fully vested in 5 years, and only 36% make it 5 years, but again only 20% make it 10 years.\u00a0 Mr. Burroughs then said with the recommendation to grandfather in the existing employees and move the new employees to the Defined Contribution Program through GMA, one thing that would happen is that there will be those 48 employees that are not vested right now and a portion of them would become vested within the next 5 years and would be fully vested under the existing plan with the current rules in 5 years.\u00a0 Let\u2019s assume 4 years would be the cap on that since we have very few people who have been here less than a year.\u00a0 In 4 years all of the current employees who are still here would be fully vested.\u00a0 If you went to a 10 year schedule for the new employees that would give you a 6 year window where no one new is vesting in the program.\u00a0 There would be a 10 year cliff since employees would have to be here for 10 years to be vested.\u00a0 So all that money that JWSC would be putting in there would actually be helping to pay off the unfunded quicker because it is not going to pay off vested liabilities.\u00a0 Commissioner Elliott then asked if there would be any stagger in the vesting, and Mr. Burroughs advised there would only be a 10 year cliff, no staggering.\u00a0 Mr. Burroughs added you would be paying 3% instead of 6% on the new employees and from statistics 80% of them aren\u2019t going to make it to vesting so that money would still be there to pay off the unfunded portion for other people.\u00a0 Now, they would still take their 3% back when they left the organization, but that would leave the other 3% in there to pay off the unfunded for those folks that didn\u2019t stay.\u00a0 And for the calculation of the pension, for the benefits the calculation would stay the exact same.\u00a0 So, GMA would have the same calculation, the only difference would be who is paying what percentage.\u00a0 We would be paying 3% and the employees would be paying 3%.\u00a0 Administratively it would be easy since we would continue to pay the pension amount like we are now, and for the new employees that deduction out of their check would go back to the JWSC instead of having Teamwork Services pay separately to the pension, and us pay separately to the pension.\u00a0 Essentially JWSC would pay the full amount and be reimbursed by the 3% deduction of the new employees\u2019 paychecks.\u00a0 Commissioner Neal asked what the turnover rate is and Mr. Burroughs replied that we lose about 15% of staff every year. \u00a0Commissioner Harvey asked if that type of transfer of money was legal, for JWSC to prepay the 6% to the GMA, and then the 3% that comes from the employee\u2019s paycheck goes back to JWSC. When the employee leaves the organization though, GMA returns the 3% that employee paid in to the program.\u00a0 John Donaghy provided that this was the same way that Social Security Payments from the employees\u2019 checks works also, but everything would be confirmed.\u00a0 Commissioner Neal provided to Mr. Burroughs that he did not want to speak for someone else, but he knew that one of the concerns that Commissioner Stephens has is looking at total compensation; what this pension total benefits, how JWSC employees rank against non-governmental types of jobs in total compensation.\u00a0 He asked have we made any headway in looking at the recommendation and how that fits in with salary benefit.\u00a0 Mr. Burroughs responded that those numbers have not been run; the difficulty is valuing the pension benefit because you could say that the employee is getting a 6% benefit every year on top of their normal salary because they are not having to pay any of that or 3% in this case.\u00a0 They are not having to pay any of that so essentially it would be a 3% bump in salaries if we did that.\u00a0 But no, we have not looked at that in entirety yet; we are just trying to make a decision on the pension because if we want to make changes effective July 1, we are going to need to do that pretty quickly since it is going to take some time to run the paperwork.\u00a0 Commissioner Elliott commented that it is going to reduce the total compensation to new employees.\u00a0 Mr. Burroughs agreed, yes it will reduce the total compensation to new employees, at least 3% because they will have that coming out of their check.\u00a0 He added that for the existing employees, theirs would stay the same, but we will start making progress toward that goal immediately; we hire 15 to 20 people per year coming into the organization so you would see an immediate turnover in them.\u00a0 Commissioner Neal said he was interested to know how our employee package measures against private sector in our location; he thinks it is important and thinks it is something we have to look at now and I agree with Commissioner Stephens on that aspect of it.\u00a0 Mr. Burroughs responded, now we did look at straight salaries, not benefits, at some other governmental agencies around here in this general area and we were in line, there were some lower and some higher depending on where you are at.\u00a0 Certainly larger cities are going to pay more typically than smaller cities will, but also authorities like Jekyll Island may pay more for some staff members than we pay, so based off of the numbers we are getting back now.\u00a0 We are not looking at benefits packages.\u00a0 We were told by consultants that benefits packages are between 38% and 42% of compensation across the board, just as a standard rule; and we are at 41%.\u00a0 Commissioner Neal said, but again I am also interested in the private sector in that if these guys left us and went into a construction industry say as a backhoe operator, what can he make in the private market. \u00a0Commissioner Elliott commented that he believed they would have a hard time coming up with the numbers that relate.\u00a0 Commissioner Neal said that he was not saying to wait on those numbers to make this recommendation.\u00a0 Commissioner Elliott noted that for a backhoe operator, JWSC\u2019s people have to run a backhoe and much other stuff, plus they have to be licensed.\u00a0 Chairman Turnipseed asked Mr. Burroughs about the recommendation stating grandfather existing meant even those employees who are not vested, and Mr. Burroughs confirmed it did.\u00a0 Chairman Turnipseed then said their vesting is on a 3 and 5 year deal and is not changing any of them to a 10 year period; and Mr. Burroughs said except for the new employees and added that the existing employees would stay on the existing vesting schedule whether they are vested currently or not.\u00a0 Commissioner Neal asked Mr. Burroughs to provide him with a chart showing the dollar amounts side by side for comparison of the options as he had presented on the bar chart comparison of the annual costs of the options.<\/p>\n
Commissioner Elliott inquired as to what were they going to recommend to the full Commission.\u00a0 Chairman Turnipseed asked Mr. Burroughs how much the option he recommended would save, and Mr. Burroughs provided that 3% would be saved immediately on new employees which would be about $160,000, there would be some staff left on the existing plan resulting in an initial savings of $130,000; the savings increases as more new employees go onto the new plan.\u00a0 Commissioner Neal asked Mr. Burroughs if he were reasonably solid on the second two, moving the new and moving the non-vested; and added those numbers are very close. Mr. Burroughs responded yes, and explained that those numbers are close again, because a lot of the non-vested people aren\u2019t ever going to get vested due to the turnover rate, which is why those numbers end up that way.\u00a0 When someone comes off the plan and the 3% after they have been here, for example, five years and has received a couple salary raises, the new employee placed in that position starts at a lower rate.\u00a0 In the long run by doing the 10 year vesting with the new plan, based on the numbers you get to a point where you don\u2019t really see a tremendous increase in the amount of vested people each year since so few make it 10 years, versus the ones that are actually able to retire each year.\u00a0 You may only have 1 or 2 people vest in a year, and maybe 1 or 2 people retire.\u00a0 Chairman Turnipseed asked what that would save JWSC.\u00a0 Mr. Burroughs responded that the 10 year vesting would save the $160,000 now which would continue to increase, and after a few quick calculations he estimated that over a 5 to 10 year window a little over $1M dollars would be saved.\u00a0 Chairman Turnipseed commented that right now in 3 years they are eligible and in 5 years they are fully vested.\u00a0 Mr. Burroughs clarified that in 3 years they are 1\/3 vested, 4 years 2\/3 vested, and in 5 years fully vested.\u00a0 Chairman Turnipseed asked when do employees start being eligible with the 10 year vesting, and Mr. Burroughs provided that they would be 0% from years 1 to 9 and 100% vested at 10 years.\u00a0 Commissioner Neal stated he would agree with that.\u00a0 Commissioner Cook commented that you might see more people shooting for the 10 if you change the vesting to 10 years.\u00a0 Mr. Burroughs added that what he has seen is people who get to 8 years want to hang on for 2 more years to get to the 10 years, but people who are at 5 to 6 years, it seems like it is too far away for them so they will make a decision to move.<\/p>\n
Commissioner Neal requested Mr. Burroughs to return to the slide with the recommendation and said he would go ahead and make a recommendation.\u00a0 Commissioner Harvey said he had a couple of questions to ask before the recommendation is made.\u00a0 He then said to Mr. Burroughs that he thinks the employees really want to know if they are going to be paying this 3%; is 3% going to be coming out of their pay; according to this last plan here you are saying that 3% will only come out of the new employees pay.\u00a0 Mr. Burroughs stated that he was correct.\u00a0 Commissioner Harvey said, so in other words everybody else will be staying just as they are right now and they are not paying anything, and Mr. Burroughs said that is correct. \u00a0Commissioner Harvey said, alright. \u00a0Chairman Turnipseed asked if the new employees had to participate, and Mr. Burroughs replied yes, it would be mandatory, and if not then that unfunded portion would continue to grow.\u00a0 Chairman Turnipseed asked if they have to participate in the 3% towards the IRA, and Mr. Burroughs said yes, with the GMA they would, it is mandatory.\u00a0 He added that if you went to a 401K they would not, but with GMA it is mandatory.\u00a0 Commissioner Harvey commented, so what you are saying is that we are comfortable with only the new employees coming in paying the 3%, in other words we are going to continue on with the way that we are going and only those new employees contribute.\u00a0 He asked Mr. Burroughs how many new employees did he predict that would be per year, and Mr. Burroughs replied it would be 15 to 20 per year.\u00a0 Commissioner Harvey then said, and they would be the ones who would start paying, and Mr. Burroughs stated that was correct.\u00a0 Commissioner Harvey added that also we are looking at a savings by virtually moving our vested plan further away so we won\u2019t have to pay so much coming out and that is how we are looking to save on that end, versus having people pay the 3% up front.\u00a0 Mr. Burroughs said, yes there would be a minimum of 5 years; if someone started June 30th<\/sup> and we start this July 1st<\/sup> there will be a minimum of a five year period where no one gets vested because of the change in plans.\u00a0 Commissioner Harvey then said the vested part is really us paying people out for a period of time for being vested; that is the savings we are looking at versus the savings of having everybody pay the 3%, only the new people pay the 3%.\u00a0 So, we are attacking it from the back end instead of from the front end, basically.\u00a0 I understand; and all of our other employees who were hired under the program stays on it; and he commented okay, I am fine with that.\u00a0 Mr. Burroughs added that for those employees that are currently with us, knowing that they have got the Tier 1 plan that would incentivize them to stay as much as possible, because if they went somewhere else, they would not be able to transfer that pension given what the new employees are doing now.\u00a0 Commissioner Harvey agreed that he was right.\u00a0 Mr. Burroughs noted that right now, we have a very qualified staff that if we could retain the majority of them, it would benefit us.\u00a0 So I think this would provide an additional incentive for those staff members too.\u00a0 Commissioner Harvey said he also thought so, and said those employees we have currently aren\u2019t paying in to the pension plan; we are paying them to work for us, and work well for us too.\u00a0 Commissioner Neal added that within 5 years approximately half of our employees will be on the new plan.\u00a0 Mr. Burroughs added that the people who are closer to retirement typically are at a higher salary point than the new employees that would be coming in, so there would be that reduction as well.\u00a0 For example if someone making $20 per hour is replaced by someone making $15 per hour, 3% of that is less money; so it has that effect as well.\u00a0 Chairman Turnipseed asked Mr. Burroughs if the people who have been hired since he has been here have come because of our pension plan or do they care about it?\u00a0 Mr. Burroughs replied, certainly I think people care about it; of the people I have directly hired we have one who moved in to town had a spouse who moved in to town, and he was looking at other options where he could have been paid more than what we offered him from a salary perspective, and in some cases significantly more, but our pension plan was very attractive to him.\u00a0 He added that he thought for someone coming in who is over 40 the pension plan is very attractive for, but if one is being hired in for a crew and is 19 years old, they probably don\u2019t spend a lot of time thinking about the pension program. \u00a0Commissioner Cook asked if the actuarial assumption is a 7.5% return, and Mr. Burroughs said that is correct. Commissioner Cook asked how many years is that assumed over, and Mr. Burroughs replied that they do make adjustments periodically; 2 years ago they adjusted it downward from 7.75% to 7.5%, so they do look at that annually, and I suspect that it is a 5 to 10 year average that they are looking at. Commissioner Cook commented that he was previously the Chairman for a Pension Board and they used a smoothing method over a period of 5 years due to the ups and downs in the market. Commissioner Neal added that he was told by the consultants the County uses that 7.5% is not a realistic number and it is more like 3.5% to 4%, but the experience at the County side has been the 7.5% over a period for a long time.<\/p>\nCommissioner Elliott asked Commissioner Neal if he would like to make a recommendation, and he replied yes.<\/p>\n
Commissioner Neal stated that he would like to recommend that the Human Resources Committee forward to the full JWSC Commission the recommendation presented by staff to grandfather the existing employees, move all new employees to a Defined Contribution Plan, and to make those changes effective July 1, 2020. \u00a0Commissioner Harvey seconded.\u00a0 Motion carried 3-0-0.<\/u><\/p>\n
Mr. Burroughs advised that the agenda for the next day\u2019s Commission Meeting would need to be amended to add this item for approval.\u00a0 The Commission agenda will be amended at the start of that meeting.<\/p>\n
Chairman Turnipseed requested Mr. Burroughs to e-mail a copy of the presentation he gave at this meeting to all of the Commissioners.<\/p>\n
With no further business to discuss, Committee Chairman Elliott adjourned the meeting at<\/p>\n
11:42 a.m.<\/p>\n","protected":false},"excerpt":{"rendered":"
For your consideration, please read the minutes from the Human Resources Committee Workshop held on Wednesday, April 15, 2020 at 10:00 a.m. in the Commission Meeting Room. Human Resources Minutes 4-15-20 with Attachments To read the minutes, please open or download the pdf from the link above, or you may see more below.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[21],"tags":[],"class_list":["post-16792","post","type-post","status-publish","format-standard","hentry","category-human-resources-safety-committee-minutes"],"_links":{"self":[{"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=\/wp\/v2\/posts\/16792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16792"}],"version-history":[{"count":0,"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=\/wp\/v2\/posts\/16792\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.goldenisleslepc.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}