We have been asked a number of questions from GREIU members about city proposals currently
"on the table". Therefore we intend to send bargaining memos out periodically to members
addressing city proposals. If you have any questions after reading a bargaining memo, call the
hall.
City Proposal - Retiree Insurance for Employees with Less Than Eight Years in the
Pension
Currently all GREIU members are in a defined benefit plan for their retiree health insurance.
The city has proposed that those employees with less than eight years service vested in the
pension plan be taken out of the defined benefit plan and put into a defined contribution plan.
The defined contribution plan as proposed by the city would require any employee with less than
eight years of service vested in the pension plan to be:
- placed in a defined contribution plan
- employees would make a contribution of $1,000.00 per year into the defined contribution
plan while the city would contribute $1,750.00 per year
- The city would also make an initial contribution based on the number of years (months)
that an employee has worked for the city
The city proposal for employees with less than eight years vesting means you will be paying a
maximum of $1,000.00 a year out of your pocket for your retiree insurance. What type of
insurance you will be able to purchase when you retire is not known. Currently the city claims
that family coverage costs over $13,000.00 per year. The city's defined contribution plan will
generate $1,000.00 from your contribution plus $1,750.00 from the city for a total of $2,750.00
per year. What, if any earnings accrue to the balance in the plan is an open question. It is clear,
however, that the proposed defined contribution plan is substantially less than what you currently
enjoy. The city's defined contribution proposal leaves open ended what insurance you can
purchase at retirement. If at retirement the plan does not provide enough money to provide a
good retirement insurance, you will be left to use whatever funds are in the plan to purchase what
it can. The city's defined contribution plan is a huge takeaway. If you have any questions, call
the union hall.
For those employees who have vested at eight years or more in the pension, the city's proposal
regarding your retirement insurance is also a reduction from what you currently have. Our next
bargaining memo will address retirement insurance for those employees with eight or more years
of vesting in the pension plan.
