Other Post Employment Benefits — which, in Griffin’s case, consist of health insurance and dental insurance for retired employees — has a total liability this year of $1.7 million. $548,000 of that is already covered by the city, leaving the city with a shortfall of $1.15 million.
“Our commission is faced with the reality of dealing with that unfunded liability,” said Vice-Chairman Dick Morrow in a later interview.
He said previous commissions had made large promises to employees but never put the numbers of the books, something that has to be done now.
At the morning workshop Tuesday, Human Resources Director Miles Neville provided the commissioners with four options to deal with the situation Tuesday morning.
According to a flier provided to the commissioners, the first option is to maintain the benefits at the current level, making sure that the list of current and retired city employees is kept up to date. The second option is to keep health and dental benefits the same for those who retire at the ordinary age and terminate them at age 65, when the employees will become eligible for Medicare, and not provide those employees taking early retirement with this benefits package.
The third option is to make the benefits package retiree-only for all employees retiring before the effective date of the plan change and grandfathering in those who have already retired. However, in all cases, the health and dental coverage will end at age 65 and those taking early retirement will not be eligible for these benefits.
The fourth option is the same as the third except the retiree will be able to continue their spouse or family coverage but must pay the full cost of this coverage. Retirees will still be required to pay their portion of the retiree-only cost.
“It’s either hurt me now or hurt me later,” said City Manager Kenny Smith.
He said the money required by the retirement benefits could be spent on other things. The two alternatives are to hurt the budget now or hurt the city employees later.
Griffin Mayor Doug Hollberg said that the second and fourth options should be investigated more deeply, while Morrow said all four merited further discussion. Assistant to the City Manager Virginia Martin said that reducing the number of options would save money — earlier in the meeting, it was revealed that each actuarial study would cost $1,500.
Commissioner Rodney McCord cautioned that many city employees took city jobs instead of better-paying jobs in the private sector due to the benefits package. He said he wants the staff to pick the plan they view as the best and the city commissioners will further tinker with it.
“Keep in mind the employees, some of them, live and die by these benefits,” he said.
The commissioners ultimately decided to have actuarial studies done of the first, second and fourth options. The commissioners will make their final decision after examining the resulting data.