HomeMy WebLinkAbout06.o. MSRS Post Employment Health Care Savings Plans (Non-Union)
EXECUTIVE SUMMARY
City Council Regular Meeting: June 19, 2018
AGENDA ITEM: MSRS Post Employment Health Care
Savings Plans (Non-Union)
AGENDA SECTION:
Consent
PREPARED BY: Jackie Kaderlik, Human Resources
Coordinator AGENDA NO.: 6.o.
ATTACHMENTS: Proposed MSRS Policy Update APPROVED BY: LJM
RECOMMENDED ACTION:
Motion to Approve the Changes to the MSRS (Minnesota State Retirement System) Post
Employment Health Care Savings Plan Policy for Non-Union Employees.
BACKGROUND
On December 15, 2009, the City Council approved the Non-Union MSRS Health Care Savings Plan
policy. The group has recently met to discuss changes to the current policy and has voted on the
proposed changes. Staff is asking that Council consider approving these modifications:
ISSUE MSRS Health Care Savings Plan
Non-union employees are eligible to participate in the Minnesota State Retirement System’s Post
Employment Health Care Savings Plan established under Minnesota Chapter 352.98 (2001) and as
outlined in the Minnesota State Retirement System’s Trust and Plan Documents. All funds collected by
the employer on behalf of the employee are deposited into the employee’s post health care savings plan
account. The Non-Union group is proposing changes to the current plan.
Bi-Weekly Contribution & Retirement Payout
Current: Currently all eligible non-union employees contribute $15 of their own funds per pay period and
if they retire after 10 years, they contribute their eligible sick and retirement payout into their individual
accounts under the MSRS (Minnesota State Retirement System) plan.
Proposed: The proposed changes in the table below would increase the bi-weekly contribution on their 5th
year of service to $30 per pay period. If the employee retires from employment after 5 years, their eligible
sick and retirement payout would be deposited into their individual accounts under MSRS.
Years of Service Time with the
City of Rosemount*
0 - 3
months
3 months to 4
years
Beginning 5th
Year to 19 Years
Beginning of
20th Year Plus
Dollar Amount Per Payroll
Contribution into MSRS Account
0 $15 $30 $30
Severance Contribution at Time
of Retirement
0 100% of eligible
sick leave and
100% of eligible
retirement pay
100% of eligible
sick leave and
100% of eligible
retirement pay
100% of: eligible
sick, eligible
retirement, and
eligible vacation
pay
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According to the MSRS guidelines, employees of each represented group must vote to implement a plan.
The non-union employees voted on May 14, 2018 to implement the above changes.
The proposed modifications have been submitted to MSRS and they have approved the changes from
their perspective. Language changes to this policy must be authorized by the City Council.
By making the proposed changes, there will be no increase to the overall retirement severance costs paid
by the City – funds to the account will be provided by the employee. Because of its “tax-free in/tax-free
out” design this approach is very beneficial to the retiring employee.
RECOMMENDATION
Staff recommends that the Council approve the proposed changes the MSRS Post Employment Health
Care Savings Plan Policy for Non-Union Employees effective July 1, 2018.
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Policy: MSRS POST EMPLOYMENT HEALTH CARE SAVINGS
PLAN (NON-UNION REGULAR EMPLOYEE)
Section: 6.5
Approved by: City Council
Page: 1 of 2
Effective Date: December 15, 2009
Revised Date: June 19, 2018 (effective July 1, 2018)
Plan Purpose The City of Rosemount has established a means for eligible employees
to participate in a mandatory program to help defray some of the costs
of post-employment health related expenses by using pre-tax dollars.
Participation in this plan is intended to provide an opportunity to
accomplish that goal.
Non-union employees are eligible to participate in the Minnesota State
Retirement System’s Post Employment Health Care Savings Plan
established under Minnesota Chapter 352.98 (2001) and as outlined in
the Minnesota State Retirement System’s Trust and Plan Documents.
All funds collected by the employer on behalf of the employee will be
deposited into the employee’s post employment health care savings
plan account as follows:
Health Care The MSRS Post Employment Health Care Savings Plan is an employer
sponsored program that allows eligible employees to defer a portion of
their bi-weekly salary for deposit into an MSRS account. This money
can only be used for the payment of qualified healthcare related
expenses after separation from City service.
Eligibility to Participation in the MSRS Plan is mandatory for all employees that
Participate meet the following requirements:
• The Employee must be a member of the Rosemount Non-Union
Pay Classification Plan,
• The Employee must have been continuously employed by the City
of Rosemount for at least three (3) consecutive months.
Contribution Mandatory participation in the MSRS Plan shall be in accordance with,
Formula and limited to the following formulas for contributions:
Bi-weekly Contribution: Eligible Employees must contribute an
amount per pay period as indicated in the table below to the
Employee’s account in the MSRS Health Care Savings Plan.
Contributions authorized under this plan shall continue until such time
as this policy is amended or repealed by the City of Rosemount.
and
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Retirement Severance Contributions:
The contribution levels may be reviewed by the non-union employees
after two years and significant changes are allowed at on-going two year
intervals.
Account All funds collected by the employer on behalf of the employee will be
Administration deposited into the employee’s post-employment health care savings
plan and administered by MSRS.
Years of Service Time with the
City of Rosemount*
0 - 3
months
3 months to 4
years
Beginning 5th
Year to 19 Years
Beginning of
20th Year Plus
Dollar Amount Per Payroll
Contribution into MSRS Account
0 $15 $30 $30
Severance Contribution at Time
of Retirement
0 100% of eligible
sick leave and
100% of eligible
retirement pay
100% of eligible
sick leave and
100% of eligible
retirement pay
100% of:
eligible sick,
eligible
retirement, and
eligible
vacation pay
*Anniversary date of full-time employment
is used to compute years of service with Rosemount