City Manager blamed the new GASB (Government Accounting Standards Board) regulations for reducing or eliminating insurance benefits for employees who are not currently vested.
The new regulations require that municipal governments report their potential insurance benefits for retirees as liabilities beginning next fiscal year. Under the last benefit structure, this would cause the city to show a budget deficit of approximately $12,000,000.
Under the old policy, employees with 20 years of service could retire at age 55 and have their insurance premiums paid in full by the city for ten years.
Under the new policy, a three-tier system was created. Those already vested will continue to receive the benefit.
Investiture occurs after fifteen years of service.
Thus, under the new policy, employees who are already retired will continue to receive the benefit. Also, employees with over fifteen years of service will be eligible for the benefit in the future, provided they retire at age 55 or older.
Employees with less than fifteen years of service will be eligible, upon retirement with 20 years of service at 55 years of age or older to receive one-half of the benefit; that is, the city will pay half of his or her insurance premium.
Employees hired after January 1, 2009 will be eligible for city health insurance provided that the employee pays 100% of the premium.
There was no debate before council members unanimously passed the change in employment benefits. Council member Bernard Alston was absent from the vote.
The reduction in employee benefits occurred minutes after the council voted to table a 2.5% COLA raise for employees.
Editor’s Note: The editor’s wife is an employee of the City of Henderson whose benefits were affected by the council’s vote.