ATTACHMENT 1a
BUDGET WORKING PAPER
TO: W. Calvin Horton, Town Manager
FROM: Pam Eastwood, Director of Human Resources
SUBJECT: Town of Chapel Hill Benefits Survey Comparisons
DATE: April 24, 2006
PURPOSE
The purpose of this report is to provide information to assist the Council in considering the relative position of the Town employee benefits programs in terms of those of the area organizations with whom the Town competes for employees.
SUMMARY OF FINDINGS
We have analyzed the information provided by 13 other area employers in response to the Town survey on employee benefits programs and provided below a summary of each and comments on how it compares to the equivalent policy or practice in the Town’s benefits programs.
Vacation/Annual Leave 9 of 13 respondents provide approximately 12-26 days per year depending upon years of service. The current Town policy is 12-26 days per year, depending upon years of service.
Sick Leave 13 of 13 respondents provide 1 day per month with no cap on accrual. The current Town policy is 1 day per month with no cap on accrual.
Holidays 6 respondents reported 12 holidays per year, 5 reported 11 holidays and 2 reported 10 holidays. The current Town policy provides 11 holidays per year.
Funeral Leave This varies considerably among respondents: both in number of days per occurrence per year and number of days per year. For example, some respondents provide 3 days maximum of funeral leave per year and others provide 3 days per occurrence.
Longevity Pay This policy varies considerably among respondents. Nine respondents provide a percentage of annual salary (which also varies among respondents) based upon years of service. Two provide a set dollar amount based upon years of service. Two do not provide longevity pay. The Town currently provides a set dollar amount based on years of service.
Health Insurance – This varies considerably; 13 of 13 respondents provide 100% of the employee premium. This structure is also the Town’s current policy. Some respondents pay 50% for dependent coverage while others pay a maximum dollar amount for dependent coverage.
Note: Comparison of medical insurance plans is problematic due to variations in the provisions of each policy. The “Cafeteria Benefits or Flex Dollars” offered by the City of Raleigh and Durham County ( which provide a dollar amount for the employee to apply to a menu of benefits options ) further reduce the ability to compare medical insurance benefits for those two respondents.
Dental Insurance – Eight of 13 respondents provide 100% of the premium for the employee and varying amounts of premium coverage for dependents. Six employers offer voluntary or “employee paid” group dental plans. The Town currently offers a voluntary employee-paid plan.
Life Insurance – This varies considerably among respondents. The lowest amount provided is $15,000 coverage. The most generous plan pays twice the employee’s annual salary up to $100,000. The Town provides coverage of $20,000.
Disability Insurance – This varies among respondents from none to 50% pay replacement for short-term disability and 65% pay replacement for long-term disability plans. The Town currently provides a voluntary (employee-paid) short-term disability plan with a two-week waiting period and an employer-paid plan with a 30-day waiting period.
Death Benefit - This varies from none (for 3 of 13 respondents), to up to $50,000. This functions in practice as an additional form of life insurance. The Town currently provides this benefit through the Local Government Retirement system, which pays $25,000 up to $50,000 in a lump sum upon the death of an active contributing member. The state agencies provide this benefit through the Teachers and State Employees Retirement System, which pays a benefit of up to $50,000.
Local Government Employees Retirement System or Teachers and State Employees Retirement System– This benefit is consistent for all respondents in this survey group, as all participate in one of these two retirement plans. The plans are defined benefit plans and do not permit variations in employer contributions. The Local Government Employees Retirement System varies from the Teachers and State Employees Retirement System for some items (such as the Death Benefit noted above). Other than this item, we have treated the two systems as essentially equivalent for the purposes of this report.
State (401K) Plan – This benefit is legally mandated for Law Enforcement Officers and varies between 3 to 5 % for other employees among the survey group organizations.
The 5 % contribution currently made by the Town is consistent with the majority of the survey group.
Tuition Assistance – This benefit varies among respondents with little consistency. The range varies from zero to full tuition in the State system for one course per employee per year. The Town currently provides up to $500 per year reimbursement for participating employees.
457 Plan – This is a plan which allows employees to defer a portion of compensation from tax until they leave employment. Eight out of 13 respondents in the municipalities group offer a 457 Plan; only three provide employer contributions. The Town currently provides a 457 Plan without employer contribution.
Other Paid Benefits – Four respondents listed other paid benefits. Some of these include: Paid Maternity or Paternity Leave, additional amounts of Personal Leave, Petty Leave, and home ownership and computer purchase assistance programs.
CONCLUSIONS
We believe the current employee benefits programs for the Town are reasonably competitive with those of area organizations with whom the Town competes for employees. We believe that Town employees are reasonably satisfied with and appreciate the employee benefits they receive.
We do not believe that the employee benefits offered by the Town would discourage a candidate from accepting employment with the Town, nor that a current employee would make a decision to leave Town employment solely on the basis of the availability of better benefits with another organization.