[Editor’s Note: Following heated exchanges here in recent days about benefits for City Council members, a City Hall official today, for the first time, describes the benefits in an attempt to eliminate misunderstandings.]
Prior to the new agreement that went into effect on Jan. 1, a vested employee – that is, who had five years of service – could retire with lifetime benefits for the employee and his/her spouse, up to 95 percent of 100 percent, depending on your employee category for life, regardless of how much the premium increased.
Under the new agreement, the retiree medical benefits changed from being a defined benefit to a defined contribution, which is a formula that gives the employee a sum certain that he/she uses toward the cost of medical benefits. There is a variety of different tiers. You can go with an HMO or a PPO, for example. Depending on the plan the employee chooses, the defined contribution goes toward that and the employee pays the difference.
As far as retirement is concerned, the same applies.
On a go-forward basis, in retirement the employee continues to receive the defined contribution. But it never will be higher than that. The city’s cost never would be more than that amount plus a maximum of 4 percent a year if premiums go up. The employee is responsible for the additional 96 percent of whatever the increases are.
Under the old policy, the retiree and his/her spouse and dependents had 100 percent of medical paid for. Under the new formula, the retiree gets a sum certain with a cap of 4 percent. The dependent receives a smaller percentage of a smaller number until eligibility runs out, 65 for a spouse, 26 for a child.
The big difference is that what was essentially 100 percent the liability of the city for retiree medical for the retiree and the retirees’ dependents now has been converted to a sum certain as far as the city is concerned. The city knows what its costs are going to be. On a 4 percent basis, the city also can project future costs.
The retiree and the retirees’ dependents now are responsible for a significantly larger portion of the medical benefits than ever before.
Regarding retiree medical benefit for newly elected Council members: After five years of service, he/she will only receive the statutory minimum per month toward retiree medical costs, currently $112 per month, because they come in under the new tier of benefits for new hires.
Retiree medical benefit for current Council members is by virtue of the negotiated memorandum of understanding with the Culver City Management Group. Benefits are the same for the rest of the management group, yes?
