HUMAN RESOURCES OFFICE
Reference: City of Brighton Adoption of Vantage Care Retirement Health Savings (RHS) Program
To: Mayor Kenneth J. Kreutzer and Members of City Council
Through: Philip A. Rodriguez, City Manager
Prepared By: Karen Borkowski Surine, Human Resources Director
Date Prepared: 1/5/2018
PURPOSE
To meet the requirements of the VantageCare Retirement Health Savings (RHS) Program, the governing body must approve a Resolution and affirmative statement of adoption of the Program.
BACKGROUND
City Council received information at the 9/26/2017 Council Study Session regarding benefit trends, to include a Retirement Health Savings (RHS) program. On October 17, 2017, Council adopted Ordinance 2267 approving the implementation of a RHS program for sworn officers with the requirement of a 1% contribution by eligible employees and a match of .5% from the City. The City must now formally adopt the VantageCare Retirement Health Savings (RHS) Program (please see attached exhibit).
After discussion with City Council, staff was authorized to poll the employees to gauge their interest in participating in an employee retiree health savings account program that, by law, would be a requirement of all employees. Surveys were sent to all City employees; 99 responded. 53% supported the proposal for all employees. The Police Department was included in the survey for all employees and also polled separately; 83% of the Police Department employees supported the proposal. Therefore, the VantageCare Retirement Health Savings (RHS) Program is being implemented for sworn officers only at this time.
With the survey results in mind, City staff is proposing approval of a 3 step approach to establish the employee retiree health savings program for sworn police officers only. Please note, City staff will continue to explore options to expand the program for the non-police employees in 2018 with the possibility of approaching Council with a proposal for 2019. Analysis of how the program works with sworn police officers will be on-going.
The following sets forth the implementation of the retiree health savings account benefit for sworn police officers in order that addresses officers in different stages of their career:
1. For sworn police officers who have reached at least 60 years of age with 20 years of consecutive service in Brighton who were hired before January 1, 2008, and retire from the City on or after January 31, 2018, the City will contribute $500.00 (tax free) monthly into a Retiree Health Savings Account until the officer is Medicare eligible. For the month following the month in which the officer becomes Medicare eligible, the City will cease making the $500 contribution. The City contribution will be allocated in the budget annually, depending on available resources. City Council will vote on funding allocation annually.
2. For sworn police officers with PTO in excess of 200 hours as of December 31, 2018, and for subsequent years, the City will deposit the cash equivalent of up to 16 hours maximum into a Retiree Health Savings Account, after which time the PTO account will be reduced by the amount contributed from PTO to the RHS Account. This deposit will happen after the last pay period of 2018.
3. For each pay period, beginning in the first pay period of 2018, sworn police officers
will be required to put 1% of their gross salary into a Retiree Health Savings Account and the City will contribute .5% of each officer’s salary into their Retiree Health Savings Account. It is important to note that the monies in the Retiree Health Savings Account can only be used to pay health care premiums.
In order to implement the RHS Plan, the City needs to enter into an Administrative Services Agreement with the International City Management Association Retirement Corporation (ICMA-RC). Special legal counsel for the City has reviewed the Administrative Services Agreement and finds it to be in compliance with the City’s intended scope of the Program.