Agenda - 06-07-2012 - 2 - Laserfiche WebLink

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Continue the $27.50 per pay period County contribution to non - law enforcement employees' supplemental retirement accounts. Continue the mandated 5% Law Enforcement Officer 303 contribution to the 401 (k). Address Increased Costs for Retiree Health Benefits • Change the eligibility for employees hired on or after July 1, 2012 305 • Set aside $3 million in reserve fund An essential part of maintaining the County workforce is its employee pay and benefits plan. In FY 2008 -09, the Board of County Commissioners (Board) approved the most recent increase in salaries, which included a 2.25% cost of living increase and a 1.0% or 2.0% in -range salary increase based on work performance. Since then, employee pay and benefits recommendations have been heavily influenced by the downturn in the economy and focused on maintaining the County's permanent workforce without increasing property taxes. The County Manager's (Manager) recommendations for funding employee pay and benefits in the FY 2012 -13 Recommended Budget are driven by the desire to maintain strong health insurance benefits in the face of ever - increasing health insurance costs, to provide additional compensation, and to address future retiree health benefits for permanent employees hired on or after July 1, 2012. Classification and Pay Study In FY 2011 -12, staff reviewed 97 classifications affecting 266 employees, and conducted an is external survey to compare the County's classification and salary structure to the external market. Overall, this year's review showed that employees are generally classified correctly and the County's salaries and salary ranges are competitive with the survey market. Staff will continue to take a proactive approach to reviewing both classifications and compensation. Employee Health Insurance Plan The most recent claims data available shows a slight drop in Loss Ratio (Medical Claims divided by Premiums Paid) for the first three months of 2012 compared to the first three months in 2011. Benefits consultant, Mark III Employee Benefits, has projected an increase in premiums of 23% ($171,609) based on data available, assuming no changes to the design of the benefits. Attachment 1 includes the details. The Board will approve a funding level for the health insurance renewal in the FY 2012 -13 Annual Operating Budget and will consider and approve final plan design and premium structure in Fall 2012. Retiree Health Benefits As discussed at the work session of April 24, the County's liability for future retiree health benefits has climbed to $62.8 million. In response to this projection, the Manager recommends modifying the eligibility requirements for employees hired on or after July 1, 2012 and contributing $3 million to a reserve fund to fully fund the current expense for FY 2012 -13. Attachment 2 is a survey by the UNC School of Government showing the benefits each North Carolina County provides for its employees and retirees, as of January 2012. U