Ocean City Today
https://oceancitytoday.villagesoup.com/p/1685820

County ends health subsidy for dependents of retirees

Only employees hired after Oct. 1 affected by change, savings realized in 15 years
By Brian Gilliland | Sep 07, 2017

(Sept. 8, 2017) Post-retirement benefits for county employees were revised for the second time in three years this week, as the Worcester County Commissioners adopted long-debated revisions to its offerings to exclude dependents from premium subsidies.

County employees hired before July 1, 2015 are responsible for 10 percent of health care premium cost for dependents upon their retirement under the Maryland State Retirement and Pension System or the Worcester County Pension Plan, provided the employee serves at least 15 years.

Employees hired after July 1, 2015 but before Oct. 1, 2017 are responsible for 20 percent of the premiums, and the final revision, adopted Tuesday by unanimous consent, shifts the entire health care premium cost for dependents to the employee after retirement.

The commissioners last spoke on the issue in June, with the intention of making the policy change effective July 1, or the start of the new fiscal year. However, they eventually agreed that employees, especially teachers and Worcester County Board of Education support staff, should have a say in the matter, and delayed enacting the change until Tuesday.

The board of education’s administration, the Worcester County Teacher’s Association and the Worcester County Educational Support Personnel Association all delivered letters to the county outlining their feelings on the matter.

As this past Tuesday was also the first day of school for Worcester County students, no school board employees were available to participate in the meeting, though Gary McCabe, the local representative for the Maryland State Educators Association, was present but not allowed to speak.

On the administration side, a letter signed by Superintendent Lou Taylor and Board of Education President William Gordy endorsed the move, but suggested a reduction in benefits should also include an examination of the existing salary scales.

The teachers’ association’s lengthy remarks warned against reductions in salaries and benefits in general, balanced against the high rate of student achievement in county public schools. The association warned that neighboring counties were beginning to make better offers to teachers, and further reductions might negatively affect student success.

The service employees highlighted the relatively low salaries they earn, and pointed to generous benefits as the tool most likely to help retain those employees. The association said many members have taken second jobs to make ends meet in light of the current reductions and is concerned that further reductions in staff, budget or benefits could place an unreasonable burden upon its members.

Joe Mitrecic, Ocean City’s representative on the board of county commissioners, spearheaded the effort, following a similar move undertaken by the resort during his time on City Council there. He said in June the move matches public employees more closely with their private-sector counterparts, who often don’t enjoy any subsidy for dependents after retirement.

“I appreciate the responses, but neither one gave ideas on how to make up the money for OPEB,” Mitrecic said. “I didn’t read anything that changed my mind.”

OPEB, or Other Post Employment Benefits, is the financial category these types of benefits fall into under accounting guidelines. Financing these costs has put increasing pressure on governments across the nation.

How much is going to be saved by the changes is anyone’s guess. However, County Treasurer Phil Thompson is certain that the savings won’t come in for a while.

“Significant savings are 15-20 years out,” he said during a previous interview on the same topic, and that’s only if economic conditions remain relatively stable during that time.

 

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