About Me

My photo
Nazareth, Pa., United States

Thursday, August 28, 2014

NorCo HR Explains One Pension Change

From the desk of HR Director Pat Siemiontkowski:

To Northampton County Employees:

Effective January 1, 2015 the Hay Group, as actuary of the county retirement plan, is updating the mortality table used for actuarial equivalence from the 1983 Group Annuity Mortality Table to the RP 2013 Annuitant Mortality Table owing to longer life expectancies.

This change does not affect the amount of the benefit that a member earns (your contributions paid into the fund together with regular interest plus the county portion). It does affect the expected time period / number of years that your pension is expected to be paid over. The magnitude of the change depends on various factors including age at retirement, the amount of accumulated deductions and the present value of the benefit. In most cases the present value of the benefit is higher and therefore the monthly benefit amount is actually increasing.

The NO OPTION selection is typically where a decrease in the monthly benefit occurs. The decreased amount varies due to the factors noted above, but in most cases the monthly benefit fully recovers within a six month period (i.e., by June 30, 2015). Information explaining the various pension selection options, including the NO OPTION selection, is contained in Northampton County’s Pension and Retirement Policy at Code 3.31 which can be found on the Northampton County Intranet.

As you may know, the Department of Human Resources now has the capability of preparing retirement estimates for employees. If you are seriously considering retirement in 2014 or in early 2015, you may request an estimate for both years. The “Retirement Estimate Request” form is available on the Intranet. You will need to complete this form and return it to Human Resources in order to obtain retirement estimates for 2014 and 2015. Please keep in mind that it may take two weeks or more to process your request. Your patience will be appreciated.

If you are a supervisor or manager, please share this notice with those employees whom you supervise and who may not have computer access. Thank you.

This answers the concerns about one change to the retirement plan, which Siemiontkowski claims might actually work to the benefit of a county worker.

But there;'s another change being considered. That's the change in the actuarial rate from 1/50 to 1/60. I explained how this could work on Monday, but there have been so many questions, I'll repeat it.

Pension liability = Accrual rate × Final salary × Years of service

So, for a person whose salary is $70,000 and who has 30 years of service, the difference between a 1//50 and 1/60 accrual rate is $7,000 per year.

1 ÷ 60 × $70,000 × 30 = $35,000

1 ÷ 50 × $70,000 × 30 = $42,000

Let me also repeat that the Retirement Board has not implemented any change in the actuarial rate. I've heard from someone close to the Retirement Boar that this is being concerned. At the end of the last Council meeting., Glenn Geissinger stated he wants to discuss some changes. But at this point, I don't know if this change is on the table, or if it is, whether it can legally apply to existing employees. Executive John Brown has stated he will look into this, and get back to me.


Anonymous said...

Mr. Brown and company will have another law suit on their hands if they try to muck around with current retiree pensions.

And people wonder what happens when they don't vote.

Anonymous said...

How can it go up if they are stretching our payments out further ?? i'm confused as to how in 6 months it replinshes itself ? I need someone to show me on paper how that would work...thanks for explaining things bo.

Anonymous said...

6:26AM you are right.
What kind of snow job do they think they are giving us. As employees we know when we are getting screwed. If you stretch out the years of life expectancy the monthly retirement check has to decrease. It may not be by much but it will decrease. It is still based on your overall contributions and the County Contributions but it will decrease.
As to the formula, ask for the calculation now for 2014 and then ask for the calculation for 2015. Then do your own math using the formulas the state legislature allows the County to use to see how they can shaft you.
If they change the formulas, we will have to sue the County. We were promised a certain retirement benefit when we came to work for the County and we want that benefit. Nothing more, nothing less. Stop trying to balance your poor financial status on the backs of the employees.

Anonymous said...

Workers who were hired under the old plan should be given the option of keeping it. New hires are usually put into any new formula. That's how it should be done.

Anonymous said...

Times change, economics change; ask not what your county can do for you.

Bernie O'Hare said...

I am not concerned about the change in the life expectancy formula. I don't see that as having a big change on pensions, though I believe Pat S has to be wrong when she states that the monthly benefit is increasing in some instances with this change. That's illogical. The only wise thing for employees to do is seek retirement estimates so they know.

But this change is minor.

What concerns me is a change in the accrual rate, which I believe is under review. That will have a negative effect on pensions, but i don't think it can or should apply to current employees.

Anonymous said...

Bo, again you write about the accrual, but you didn't answer my question from yesterday. "Another proposal under review is a change in the accrual rate from its current calculation of 1/50 to 1/60. If this applies to existing pensions, it appears to me that it will have a detrimental impact. That decision must come from the Retirement Board." Maybe I'm wrong, but I checked the little green retirement book that the County initially gave me and on the front page it revealed that, since 1/1/1972, the accrual rate is already at 1/60th. Is that what the County Executive is checking? When did it change to 1/50th? Please look into this. This is definitely a HUGE difference. Thank you for your interest in the employees welfare.

Bernie O'Hare said...

I agree. You know I have asked the Top Dog about this, and you saw his answer. He is looking into it.

Anonymous said...

You simply cannot trust this administration. They use corporate talking points rather than honest and open discourse. Expect Norco employees to be played by Brown and his minions. Then off with their heads!

Anonymous said...

FYI Bernie,

John Brown informed the Human Services Departments today that he intends to change their medical benefits as of January 2015. He plans to increase their deductibles, co-pays, prescriptions, and add a costly co-insurance. All of this could potentially cost the employee $6,500-$14,500 additional a year depending on if they have an individual or family policy. He stated that the employees needed to "give back" to the county. Truthfully, these employees "give back" to the county on a daily basis in all that they do to serve the people of the county whether it is for CYF, Aging, Mental Health, D&A, or Early Intervention. He also planned to make these changes outside of the contracts and without any negotiations. This is in addition to any changes he will likely make to the employees contribution to their medical benefits. He has also indicate he has no intention of giving any raises so this will cause employees to see a drastic cut in their pay, which is not a whole lot for the work that they do.

John Brown also fails to comprehend and neglects to inform the public that the county receives a reimbursement for each Human Services employee's salary and medical benefits. This reimbursement is between 80%-100% of the salary and benefits plan for EACH employee. He has indicated that the Human Services are the reason the county is in financial distress but in actuality, the county pays very little to nothing for county caseworkers. Maybe the financial stress has more to do with all the different companies he has hired to look at effecieny and financial issues. Maybe he should take that money and actually pay some county bills with it.

Anonymous said...

Additional note for comment 9:07...

The reimbursement for their salaries comes from the state to the county. Check it out.

Anonymous said...

If so Brown is making the right call. The need for changes in health benefits comes from Obamacare which has designated your health insurance coverage a Cadillac Plan. How's that hope and change working for ya?

"You have to pass the bill to find out what's in it!"

Anonymous said...

You are assuming everyone who works for the County voted for Obama and Obamacare. That is not the case. Additionally, there is currently no penalty at this time for having a Cadillac Plan and may never be one at all. Brown said that he is putting it in place in anticipation for what is supposed to come in 2023. Why should employees pay for that now when there is no current penalty. Also, plans that have already been in place are supposed to be grandfathered in. There are too many unknowns in it to implement these huge changes now. And again, the county is not putting out much money for these plans as the state gives them a reimbursement for human services employees so how exactly is he making the right call with this. Personally, I would never have passed a bill without knowing what was in it.

Anonymous said...

You fucken assholes deserve just what you get....every time you vote for a republican in a top position they screw the working class. Look at your present governor. Look at what Reagan did to the seniors. Look at what Brackbill did to the employees. Look at what Brown is doing now. You idiots get no sympathy from me. You voted for this asshole.
Sign me
A fellow Northampton County Employee and Retiree

Anonymous said...

That's pretty harsh and ignorant as well. Why are you assuming that every county worker voted for Brown? Most people I know did not vote for him and there are many employees who do not live in the county who were not able to vote at all. They are all being impacted negatively even though they did not vote for him. I don't know how he got voted in but he clearly does not seem to care about the county workers or retirees. People need to stick together to fight against the bad decisions instead of turning on each other.

Anonymous said...

Don't blame Obama for you own miserable life. You were a loser long before Obama. There now, do you feel better boopy?

Anonymous said...

Why are you resorting to name calling to someone you don't know and never met? That is not intelligent nor helpful to what is being discussed. Some blame the workers and say they deserve this because they voted for Brown. Does that mean if a worker did not vote for Brown they can be exempt from these changes? No, they are penalized just the same. Regardless of how someone voted in this situation, what he is doing is wrong and he cannot do legally outside of negotiations.

Anonymous said...

The worker's did not vote for Clown, er, Brown. The unions endorsed his opponent and now he is being vindictive. But he will take it out on all county employees, union or not, in order to reign in costs. Clown, I mean Brown, was elected because of poor voter turnout. Voters show up in droves for a national election and then stay home for local elections, and that is how we got in this mess. Our lives are governed more on a local level and voter turnout should reflect that. Clown, I mean Brown, didn't even need money to win. He just knocked on the doors of citizens that Callahan pissed off the most and won their hearts. And that is what I plan on doing to assure his term will expire. I am a high ranking union official and the few times I have met with him he straight up lied to my face. He is like the mafia, he smiles at you before he has you wacked.