MEMORANDUM
TO: W. Calvin Horton, Town Manager
FROM: Pam Eastwood, Human Resources Director
DATE: March 10, 2005
SUBJECT: Town of Chapel Hill Benefits Survey Comparisons
INTRODUCTION
We have analyzed the information provided by 13 other area employers in response to the Town survey on employee benefits programs and provide below a summary of each and comments on how it compares to the equivalent policy or practice in the Town’s benefits programs. We also have provided our recommendations on some changes which could be considered by the Council.
Vacation/Annual Leave Nine of 14 respondents provide 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 14 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 Seven respondents reported twelve holidays per year, six reported 11 holidays and one 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. We believe that the current policy is adequate and do not recommend a change in this item.
Longevity Pay This policy varies considerably among respondents. Seven respondents provide a percentage of annual salary (which also varies among respondents) based upon years of service. Four provide a set dollar amount based upon years of service. Three do not provide longevity pay. The Town currently provides a set dollar amount based on years of service. We do not recommend a change in this item.
Health Insurance – This varies considerably; 6 of 14 respondents provide 100% of the employee premium and 50% of costs for dependent coverage. This structure is also the Town’s current policy.
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 14 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 such 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 currently provides $20,000 per employee.
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.
Death Benefit - This varies from none for 7 of 14 respondents, to up to $50,000. This functions in practice as an additional form of life insurance.
The Retirement System will pay the beneficiaries of an active employee who dies a benefit equal to their annual salary but not less than $25,000 or more than $50,000.
Local Government Employee Retirement System/State Retirement Plan – 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.
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. Reimbursements range from $300 per employee to no limit-based on case by case basis.
The Town currently provides up to $500 per year reimbursement for participating employees.
457 Plan/Tax Deferred Savings Plan – Most respondents in the municipalities group offer a 457 Plan; only three provide employer contributions.
Other Paid Benefits – Four of 14 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.
RECOMMENDATIONS
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.
Based on our survey and analysis we believe it would be reasonable to consider the following benefit improvements:
· Provide partial or full employer contribution to premiums for dental insurance for employees and/or dependents. This would benefit the greatest number of individuals Town-wide.
· Provide a higher level of pay replacement in the employer-paid disability insurance coverage program. This would benefit those employees who are temporarily unable to work and intend to return to work after recovery.
· Provide a higher level of employer-paid life insurance coverage. While this will not actively benefit current employees, it would relieve the employee from the cost of direct purchase of the amount of coverage desired and would be a valuable benefit.
We will consider these proposals as the Manager’s recommended budget is being developed.
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