Agenda - Council Work Session - 11/28/2017

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CC Work Session 2. 3. Meeting Date: 11/28/2017 Information Title: Non -union Post -employment Healthcare Savings Plan Purpose/Background: The purpose of this discussion is to update the City Council regarding the current status of the non -union post -employment healthcare savings plan (PEHCSP) and to discuss potential future updates to the plan design. The post -employment healthcare savings plan must be included in the City's Personnel Policy. Staff is in the process of updating the Personnel Policy and will bring the Personnel Policy as a whole forward to the City Council in the near future. In the meantime, staff would like to receive the City Council's feedback regarding new options for the PEHCSP. Contributions to the PEHCSP can come from sick leave, vacation leave, or salary. Currently, non -union employees participate in the plan as follows: Sick Leave Severance - -Employees with 10 years of service, upon separation, contribute 50% of their eligible sick leave to the plan. - -Employees with 15 years of service and greater, upon separation, contribute 75% of their eligible sick leave to the plan. Eligible sick leave is based on the percent of unused sick leave at the time of separation, based on the employee's years of service, as shown on the chart below: Salary Non -union employees do not make a salary contribution at this time. Employees may vote to include an on -going salary contribution; however, this is yet to be brought to a staff vote. . Vacation Severance Non -union employees do not make a vacation severance contribution at this time. Employees may vote to include a vacation severance contribution (upon separation) in the future; however, this is yet to be brought to a staff vote. Staff have been in the process of holding meetings with the Minnesota State Retirement System to educate employees on the Health Care Savings Plan. This is in an effort to update the current plan that has been in place since 2008. The decisions that are made regarding the plan design will effect all non -union employees. Once the plan is in place, opting out of the plan is highly restricted. After only one meeting, several long-term staff have asked about the possibility of converting their unused sick leave, after 960 hours, toward the PEHCSP rather than having it convert to vacation time as described in the policy below. The City's sick leave policy states: "Sick leave may be accrued to 960 hours; unused sick leave in excess of 960 hours at the end of a calendar year shall be converted to vacation at a rate of one hour of vacation for two hours of sick leave. Staff would like to discuss this option with the City Council in order to determine if the City Council has an interest