City of Saginaw’s Unfunded Liability Presented to City Council By Dennis Jordan SPHR, Director of Human Resources February 3, 2014.

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Presentation transcript:

City of Saginaw’s Unfunded Liability Presented to City Council By Dennis Jordan SPHR, Director of Human Resources February 3, 2014

Fund Balance Beginning F/YBalance% of Budget $ 268,8810.8% $1,248,0583.9% $3,970, % $3,771, % $1,544, % $1,455, %

Unfunded Liability(s) % Funded OPEB -$220,255,7451.6% Police/Fire Pension- $ 69,116,72662% MERS Pension - $ 76,562,229 47% TOTAL = $365,934,700

Annual Required Contributions Police and Fire Pension FY Beginning $6,046, $5,845, $5,685, $4,469, $4,453,364 Average Annual Increase = 7.1%

Annual Required Contribution MERS FY Beginning $9,059, $7,576, $6,720, $5,856, $5,104,320 Average Annual Increase = 15.5%

5 Year Projected Pension Contributions Police and FireMERS FY Beginning 2014$6,475,681$ 9,979, $6,935,455$11,975, $7,427,872$12,514, $7,955,251$10,631, $8,520,074$ 9,034,000

Possible Pension Solutions Note: Both Pension Systems Closed to New Hires in 2000 Freeze current participants benefit and change benefit to a hybrid (both DB and DC) or only a Defined Contribution Plan. Negotiate changes to current employees in the system to comply with State EVIP Compensation Plan ( Multiplier and/or Adders). Move the Police and Fire Pension System to MERS.

Healthcare Strategy Three Draw Downs on the Healthcare system Active Employees Future Employees/Retirees Active Retirees

Changes to Healthcare ACTIVE Pre 2009 No Deductibles; Co-pays; Contributions Negotiated - –$250/$500 Deductibles –$1000/$1500 Co-Pays –$20 per pay contribution Performed audit of dependent status on active employees (estimated savings of $250,000 annually )

Changes to Healthcare New Hires New Hires (2009) no longer eligible for Retiree Healthcare. Healthcare Savings Plan (HSP) provided for New $125 per month.

More Changes to Healthcare Initiated annual open enrollment process for Active and Retiree Health Care Participants. 2011/ Negotiated All Actives - –$500/$1000 Deductibles –$2000/$3000 Co-Pays –$20/$30/$50 per pay contribution (indexed annually) –Three Tier Drug plan (7/35/70) –Created New PT Contract with SEIU – No HealthCare

Retiree Health Care Contributions Annual Required Contribution $16,188, $17,615, $17,836, $20,635, $20,070,947 Actual Contribution $8,282, $9,791, $9,515, $8,945, $7,888,799 *726 Retirees

What have we done so far with the Retirees? July 1, 2013 – Efforts made to move retirees to one plan ( same as current active employees). Retirees appealed – Court ordered and injunction. Litigation in process. Retiree Association has met with the City on several occasions. Alternative plan offered by City-No agreement at this time.

Don’t Shoot the Messenger!