AGENDA #3a

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:            Patricia W. Thomas, Human Resources Director

SUBJECT:       Comparison of Town Benefits to those of Area Employers

DATE:             April 4, 2001

Council members requested information on the Town’s benefits package, especially on how that package compares to those of our area local government market employers.

Attached for your information are several summaries and tables:

·    Attachment 1 looks at each individual benefit area and summarizes how Chapel Hill’s benefit compares to other area governmental organizations.

      In summary, this chart shows that for individual items Chapel Hill’s benefits are:

-         Similar and equivalent to other employers in the areas of individual health insurance, and in the number of vacation leave and holidays provided annually 

-     Within the upper group on disability insurance, dependent health coverage and contributions to a tax deferred program such as 401(k)

-     Within the middle group on the tuition assistance and longevity pay programs

-     Within the lower group on dental and life insurances

·    Attachment 2is a table with details comparing Chapel Hill’s benefits in 11 key areas to those of nine other governmental organizations, along with turnover data from those organizations.

·    Attachment 3provides two tables totaling the cost of the benefits packages of two hypothetical employees in each of the ten governmental organizations.  The average full-time employee salary in Chapel Hill is  $35,700, so the charts calculate benefits for two employees with a $35,000 salary:  one with 5 years of service and carrying individual health coverage, and another with 10 years of service and carrying parent/children health coverage. 

      This chart shows that Chapel Hill’s total package is in the top group, behind Durham County in one example and the City of Durham in the other.  In both calculations the State of North Carolina’s employees receive the lowest benefit package.

We believe that review of this data indicates that the Town's benefits package is an attractive and competitive one, and is in line with the benefits package of other employers.  We will be glad to answer Council questions.

ATTACHMENT 1

 

Summary of Benefits Provided by 9 Other Area Governmental Organizations

(See Attachment 2 for details of the benefits programs of each of the

organizations and of the Town)

Health insurance: 

Individual coverage: The Town pays 100% of individual coverage for all the plans.

All of the governmental organizations also pay 100% for at least one individual health plan insurance.  However, some organizations pay for coverage in a base plan and require the employee to pay the differential of higher cost plans. 

Dependent coverage:  The Town pays 50% of the dependent share of health insurance coverage.

7 of the 9 governmental organizations pay a portion of dependent (family, spouse, or children) health coverage, with the amounts ranging from 11% to 95%.  Four organizations pay 40-50%, as does the Town.  Three organizations make no contribution to dependent health coverage.

Retirement benefits: 

Retirement System:  All of the governmental organizations, including the Town, participate in the State or Local Retirement System.

Tax deferred savings plans:  The Town contributes 5% to a 401(k) program for all employees.

State law requires that a 5% contribution be made on behalf of law enforcement officers.  The State of North Carolina is the only one of the 9 other area governmental organizations surveyed not making at least some contribution to the 401(k) plan or other deferred compensation program for non-law enforcement employees.  4 others make a 5% contribution, as does the Town, and the 4 others make a smaller contribution ranging from $15 per paycheck to a 3% of salary contribution.

Dental Insurance paid by the organization: 

7 of the 9 provide employer-paid dental insurance for their employees; one organization also pays a portion of family members’ dental insurance coverage.

The Town and 2 other employers do not pay for dental insurance for employees, although an optional plan is available for Town employees and dependents with the employee paying the full premium cost.

Disability Insurance paid by the organization:   

The Town provides both short and long-term disability coverage for employees, and is one of two organizations providing both short and long-term disability income protection.

7 of the 9 governmental organizations provide either short-term or long-term disability benefits.

Life Insurance provided by the organization:   

The Town's $20,000 coverage is on the lower end of the life insurance benefit provided; the more frequent benefit provided is one or more times annual salary.  The State of North Carolina is the only governmental employer which does not provide life insurance over and above the benefit through the Retirement System.

Longevity or service awards program: 

6 of the 9 governmental organizations provide a longevity program.  Most of the organizations provide this payment through a percentage of salary; the Town and one other organization provide a flat dollar payment, which has the effect of providing a greater proportional benefit to lower paid employees.

3 organizations have recently trimmed their longevity programs, either reducing the payment amounts or eliminating it for employees hired after certain dates.  However, the payment amounts they trimmed had previously been more generous than the Town’s flat payment amounts.

Leave:

Holidays:  The Town provides 11 holidays per year, as do all the other area governmental organizations; 3 organizations provide 1 additional holiday in some years.

Annual (vacation) leave: All of the organizations provide similar graduated vacation schedules, most, like the Town, providing 12 days for new employees and around 26 days for the longest term workers.

Tuition assistance:

All of the organizations provide some assistance to employees taking a course or courses through local educational organizations.  The Town’s $500 annual authorized per-employee amount is in the middle range; two organizations provide over $1,000 to reimburse employee tuition.

     

ATTACHMENT 2

2001 Benefits Survey	Chapel Hill	Carrboro	OWASA	Orange County	UNC and State of NC
Health Insurance (full-time employees)	Town pays 100% of individual; 50% of dependent; domestic partner coverage available	Town pays 100% of individual; 50% of dependent; domestic partner coverage available	OWASA pays 100% of individual; 40% of dependent	County pays 100% of individual; 40% of dependent	State pays amount equivalent to State plan only; dependent coverage optional
Monthly  premium(s)  for individual coverage	$194 - $217 Town pays $194 to $217	$173 Town pays $173	$215-240 OWASA pays $215-$240	$231 - $260 County pays $231 to $260	$187 - $266 UNC pays $187
Life Insurance	$20,000 Town paid; supplemental at employee’s expense	$15,000 Town paid; supplemental at employee’s expense	Twice annual salary paid by OWASA	One times annual salary up to $50,000 premium paid by county	None by UNC/ State (optional employee paid - one times annual salary up to $500,000)
Dental Insurance	Optional (all of premium paid by the employee)	Optional (all of premium paid by the employee)	OWASA paid individ; 40% dependent coverage	County paid individ; dependent coverage optional	Optional (all of premium paid by the employee)
Disability Insurance	Town- paid short term and long term disability, as well as through Retirement System*	$250.00 short term benefit paid by Town; long term available only through Retirement System*	No short term; OWASA- paid long term*	Short term – optional; long term available only through Retirement System*	Employer paid short term; long term available only through Retirement System*
401(k)	5% law enforcement officers and general employees	5% law enforcement officers; 3% general employees	457 plan (instead of 401k); dollar amt. per paycheck depending years of service	5% law enforcement officers; $15.00 per paycheck for non-LEO ($390 annual)	5% law enforcement officers; none for general employees
Vacation Leave	12 – 26 days per year depending on years of service	12 – 26 days per year depending on years of service	10 – 24 days per year depending on years of service	12 – 28.75 days per year depending on years of service	11.75 – 25.75 days per year depending on years of service
Holidays	11 paid	11 paid	11 paid	11 paid	11 paid
2001 Benefits Survey	Chapel Hill	Carrboro	OWASA	Orange County	UNC and State of NC
Longevity	5 – 9 yrs $500 10 – 14 yrs $650 15 – 19 yrs $800 20 – 24 yrs $1000 25+ yrs $1200	5 – 9 yrs $225 10 – 14 yrs $415 15 – 19 yrs $600 20+ yrs $790	(see 401(k) above – contributions are based on years of service)	10 – 14 yrs 1.5% salary 15 – 19 yrs 2.25% salary 20 – 24 yrs 3.25% salary 25+ yrs 4.5% salary	10 – 14 yrs 1.5% salary 15 – 19 yrs 2.25% salary 20 – 24 yrs 3.25% salary 25+ yrs 4.5% salary
Tuition Assistance	$500.00 per employee per year	$300 per employee per year for first 10 employees	$750.00 per employee per year	$600.00 per employee per year	One course per year per employee after 6 mos. of employment (approximate $500 value)
Funeral Leave	3 days per year	5 days per 12 month period	3 days per occurrence – immediate family	3 work days per occurrence – immediate family	None
Turnover %	10.1%  (annualized rate - first 2 quarters)	22%	10.7%	12.6%	15.32% (State of NC)

                                                                                                                                                                                                                                                                                                                           

* long-term disability through the Local or State Retirement Systems requires the employee to have 5 years of creditable service in the State and/or Local  System.; employees with less than 5 years would not have disability coverage unless either the organization or the employee pays for additional disability coverage.

2001 Benefits Survey	Raleigh	Wake County	Cary	Durham County	Durham City
Health Insurance	City pays 100% of individual; 11% of dependent	County pays 100% of individual; dependent coverage optional	Town pays 100% of individual; 50% of dependent	County provides cafeteria plan; employees receive  $300 per month, which is enough to cover individual plus payment toward dependent health coverage or toward other benefits**	City pays 100% individual coverage for least expensive plan and approx. 70% of dependent coverage
Monthly premium(s) for individual coverage	$136.69; City pays $136.69	$195.95; County pays $195.59	$158; Town pays $158	$192-196; County pays $192-196	$146–159; City pays $146
Life Insurance with premium paid by the organization	One times annual salary plus one times AD&D paid by organization	One times annual salary up to $30,000; supplemental optional up to 1 times annual salary	One times annual salary; supplemental optional up to $150,000	One to three times annual salary up to $145,000	One times annual salary; optional additional coverage up to double life available
Dental Insurance with premium paid by organization	City provides individ; dependent coverage optional	County provides individ; dependent coverage optional	City provides individ; dependent coverage optional	Cafeteria plan allotment covers individual	City pays individ; dependent coverage optional; (plan is self-funded by the city instead of insured)
Disability Insurance with premium paid by organization	No short term; long term available only through Retirement System *	County paid long term for employees with less than 5 years service, to supplement disability through Retirement System*; optional short term disability	Town paid short term; long term available only through Retirement System*	County paid short term and long term disability, as well as through Retirement System*	Employer paid short term for specific medical conditions, up to 6 weeks at full time. Optional long-term disability (employee paid) as well as through LGERS *

2001 Benefits Survey	Raleigh	Wake County	Cary	Durham County	Durham City
401(k)	5% LEO only; matches employee contributions of .875% with city contribution of 1.75%	5% law enforcement officers and general employees	5% law enforcement officers and general employees	5% law enforcement officers and general employees	5% law enforcement officers and general employees
Vacation Leave	12 – 24 days per year depending on years of service	12 – 26 days per year depending on years of service	10 – 24 days per year depending on year s of service	11.87 – 25.87 days per year depending on years of service	12 – 23 days per year depending on years of service
Holidays	11 paid	11 paid	State Schedule 11 or 12	State Schedule 11-12	11 or 12
Longevity	Employed prior to 6/93     5 yrs – 2.1%     10 yrs – 4.2% Employed after 6/93     5 yrs – 1%     10 yrs – 2%	None for employees hired after June 16, 1995. For existing staff: 10-15 yrs. 1.5%, 15-20 years 2.25%; 20-25 yrs 3.25%; 25+ yrs 4.5%	None	None	2.5% - 4.5%; $1500 cap for employees employed prior to 7/1/98; no longevity for employees hired after 7/01/98
Tuition Assistance	$1,500 per employee per year	$1,000 per employee per year	$400 per employee per year	$500 per employee per year	$400 per employee per year
Funeral Leave	5 days of sick leave	3 days per year	None	3 days per year	5 days per year – immediate family
Turnover  %	11.4%	11%	11.4%	13.6%	11%

 * long-term disability through the Local or State Retirement Systems requires the employee to have 5 years of creditable service in the State and/or Local  System.; employees with less than 5 years would not have disability coverage unless either the organization or the employee pays for additional disability coverage.

** Durham County provides $300 a month for employees to use for benefits.  An employee who carries individual health insurance has sufficient funds remaining to purchase short and long term disability covering 66% of income, and for dental, and life insurances.  An employee who carries parent-child coverage has 94% of that coverage paid, and an employee who carries family coverage has 54% of that coverage paid—but in both cases would have to pay 100% of disability, dental, and life insurances premiums.                                                                                                                                                                                                         

ATTACHMENT 3

CHART 1

Differences in annual costs for major benefits for an employee making $35,000 with 5 years of service and no dependents covered under the health insurance plan (individual coverage only).

Benefit:	Town of Chapel Hill	Orange County	Carrboro	OWASA	UNC/ State of NC	Cary	Raleigh	Wake County	Durham	Durham County
Salary	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000
401k/457	1750	390	1050	$520	0	1750	612.50*	1750	1750	1750
Short-term and long-term disability	350	0	50	133	182	0	0	39.60***	? (self funded rather than insurance)	763 **
Health insurance	2436	2778	2076	2880	2256	1896	1640	2351	1757	2304 **
Longevity	500	0	225	0	0	0	350	0	875	0
Dental	0	233	0	223	0	204	142	198	145	264 **
Life insurance	81	126	58	238	0	67	69	52.50	97	189 **
Total	$40,117	$38,527	$38,459	38,994	$37,438	$38,917	$37,813	$39,391	$39,624 +	$40,270

  * Raleigh matches employees’ contribution up to .875% of salary.  City’s contribution is 1.75%

** Durham County provides $300 a month for employees to select benefits.  An employee who carries individual health insurance has sufficient funds remaining to purchase short and long term disability, dental, and life insurances; an employee who carries parent-child coverage has 94% of that coverage paid, and an employee who carries family coverage has 54% of that coverage paid—but would have to pay 100% of disability, dental, and life insurances premiums.  The figures shown here reflect this employee’s choice to pay for individual health coverage and put the remaining funds toward dental, life, and disability insurance (66 % income replacement instead of 50%) coverage.

*** Wake County provides disability coverage for employees in years 2-5; after the 5^th year the employee would be eligible for disability coverage through the NCLG Retirement System.

 

CHART 2

Differences in annual costs for major benefits for an employee making $35,000 with 10 years of service and covering dependents under the health insurance plan (parent/children coverage).

Benefit:	Town of Chapel Hill	Orange County	Carrboro	OWASA	UNC/ State of NC	Cary	Raleigh	Wake County	Durham	Durham County
Salary	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000	$35,000
401k/457	1750	390	1050	780		1750	612.50*	1750	1750	1750
Short-term and/or long-term disability	350	0	50	133	182	0	0	39.60****	? (self -funded rather than as insurance)	**
Health insurance	3864	3812	3999	3588	2256	2712	2039	2351	4568 ***	3600
Longevity	650	525	415	0	525	0	1470	525	1500	**
Dental	0	233	0	223	0	204	142	198	145	**
Life insurance	81	126	58	238	0	67	69	52.50	97	**
Total	$41,695	$40,086	$40,572	$39,962	$37,963	$39,733	$39,332	$39,916	$43,600	$40,350
									+disability   cost

    *  Raleigh matches employees’ contribution up to .875% of salary.  City’s contribution is 1.75%

   ** Durham County provides $300 a month for employees to select benefits.  An employee who carries individual health insurance has sufficient funds remaining to purchase short and long term disability, dental, and life insurances; an employee who carries parent-child coverage has 94% of that coverage paid, and an employee who carries family coverage has 54% of that coverage paid—but would have to pay 100% of disability, dental, and life insurances premiums.  The figures shown here reflect the employee’s choice to put all of their funds toward parent/child coverage.

 *** Employees with 2 or more children carry Family coverage at the price shown; if the employee covers only 1 child the rate paid by the city would be $2800

**** Wake County provides disability coverage for employees in years 2-5; after the 5^th year the employee would be eligible for disability coverage through the NCLG Retirement System.