By: Benjamin J. Gohs, Associate Editor
Just when you thought it was safe to stop hearing about municipal insurance programs, the retirement age and post-retirement health benefits of county employees issues are on the roster for the 9:30 a.m. Wednesday Jan. 11, Charlevoix County Board meeting.
While researching facts and figures for the recently approved new insurance plan for employees – one that is expected to save taxpayers upwards of $400,000 – county officials realized some decisions made by former commissioners over the past few decades may have created millions of dollars in unfunded liability for future taxpayers.
“It really wasn’t a major discovery as much as something we noticed while the commissioners were looking into possibly moving retirees to another health insurance policy in order to save money,” said Charlevoix County Clerk Cherie Browe.
The major issues concerning the man spearheading the investigation – Charlevoix County Commissioner Rich Gillespie (R-District 6) – are the lowering of the retirement age from 60 to age 55 in 2002; and the post-retirement health benefits which were given to at least 21 employees and ex-county commissioners between 1986 and 1992.
“I’m interested in making sure the taxpayers are fairly represented,” Gillespie said. “I’m not trying to persecute anybody. I’m just trying to make sure we’re doing our jobs properly.”
So far, a total of 21 people – some of whom are now deceased – have cost taxpayers over $1.16 million in health care premiums between the years of 2005 and 2011.
One of the major changes which occurred in lowering the retirement age from 60 to 55 was elimination of the half-percent penalty assessed for each month that an employee retired early of their 60th birthday.
For example, if someone had retired at 55 when the official retirement age was 60, they would have lost 30 percent of their pension.
Due to the numerous variables involved in calculating each employee’s health care costs, no solid figures on future liability have been calculated, but county officials have mentioned preliminary estimates of between $3 million and $10 million.
Gillespie said he has concerns with the potential cost of the benefits and what he deemed a “low” age for retirement.
“People are living much longer now – the median age is 79.9,” Gillespie said. “It goes without saying that the lowering of the retirement age proved to great significance that it was not researched properly.”
Gillespie said he is looking for input from the public on this matter.
“I feel the minimum retirement age should be 62, or 60 with 30 years of service, and a minimum of 20 years of service to retire without our health plan,” Gillespie said, adding that the board will need to research what the laws say about retirement and insurance minimums.
“I think it warrants some investigation and discussion,” said Charlevoix County Commissioner Chris Christensen (R-District 2).
Browe said the cost of health insurance alone for those employees who retired under the age of 60 is approximately $900,000 through 2011.
When those affected employees turn 65, Medicare picks up a portion of their health insurance costs, dropping the average single payer cost to taxpayers to approximately $6,000 per year.
The last of the employees in question will turn 65 in 2023.
Charlevoix County no longer allows post-retirement health care benefits for new employees.
Another potential issue surrounds three or four former Charlevoix County Sheriff Deputies who have collected the post-retirement health insurance benefit, but who may not have been eligible because union employees were not eligible for the benefit.
Browe said the board even received a clarification proclamation and resolution from the board’s then labor attorney Pete Patterson, that said the insurance was not granted to anyone covered by a written agreement – this included any union employee.
Browe said she is still researching the matter and will present her findings to the board on Wednesday Jan. 11.
So, how did this all come about?
According to the Charlevoix County Personnel/Internal government Committee meeting minutes of Sept. 5 2002, discussions were begun by at lest two department heads on the desire to lower the county retirement benefits age from 60 to 55 years old or 20 years of employment.
The department heads claimed the move would save taxpayers money.
Now commissioners will have to decide whether that claim was true.