The Study & Formulating Committee: The Story So Far

The Study & Formulating Committee is appointed by the Mayor to examine Metro employee & retiree benefits and to produce a report with a set of recommendations if they believe any changes are needed. Those recommendations will be presented to the Metro Benefit Board, who may decide to support none, some, or all of the Committee’s recommendations. Any changes approved by the Benefit Board are then sent to the Metro Council for appropriate legislation which will then be voted on. 

The work of the Study & Formulating Committee affects the nearly 15,000 employees working in Metro Schools, General Government, and other departments like MAC, Hospital Authority, and Health Department who receive Metro benefits, as well as retirees and diability pensioners.

The S&F Committee began meeting in April after Mayor Dean appointed the following people to serve on it: Dot Berry, Gerald Nicely, Steve Farner, Betty Nixon, and Bruce Sullivan. Berry, a former director of Metro H.R., was named the Committee’s chair.

At the meeting in June, representatives from the employee groups, including SEIU Local 205, made a series of proposals to the Committee for their consideration. The SEIU proposals, which we outlined in the May/June edition of The Public Worker, would improve employee and retiree benefits—especially the pension multiplier.

At the meeting in August, Metro’s Finance Director Rich Riebeling, made his own proposal to the S&F Committee. All of Riebeling’s proposals will result in cuts to benefits for current employees, retirees, and future employees.
Here are the highlights from Riebeling’s Aug. 18 memo:

PENSION Require employee contribution Return vesting to 10 years from current five years Transition to a defined contribution plan for new employees MEDICAL PLAN Establish 10 year vesting for coverage at retirement Eliminate medical coverage at retirement unless retire as Metro employee Require all employees to have a Medicare Part D policy Adjust employee/Metro contribution at retirement based on years of service Eliminate medical coverage upon retirement or departure from employement with Metro prior to retirement INJURY ON DUTY Require use of General Hospital for all injuries unless emergency situation or outside specialist is required Transition to a worker’s compensation model Eliminate ability to draw 100% of gross pay tax-free while on IOD Eliminate ability to use medical insurance for work-related injuries

At the request of the Mayor, the Committee approved the hiring of an outside consultant to make recommendations. The consultant, who has not been chosen as of this writing, will be paid approximately $100,000 and it will be the first time an outside consultant has ever been used to do the work of the Study & Formulating Committee.

At the September meeting, there was discussion about the RFP (request for procurement) related to the hiring of the consultant and the parameters the consultant would be using. Several notable quotes came from the actuary Metro uses: Bryan, Pendleton, Swats & McAllister. According to their representatives, Metro’s pension “is approximately 90% funded”. Also that the accounting liability that Metro has is “relatively small compared to other cities”. Actuaries also admitted that changing to a Defined Contribution plan (similar to a 401k) would “increase costs in the short term” to the city. Committee members also asked the Finance Department to find out whether moving to a Defined Contribution plan could “increase turnover and therefore costs to the city’s health insurance program”.