A six-page summary detailing the $1.6 billion in concessions being asked of the state’s unionized workforce was released Monday evening. The summary explains the five-year deal, which includes no layoffs for four years and no wage increases in the first two years of the agreement. This summary obtained by CTNewsJunkie also confirms that there will be wage increases of 3 percent in each of the last three years of the contract.
“This agreement is not perfect, but in perilous times, it is far, far better than the alternative,“ the summary concluded. “It provides not just at least 4 years of peace, but a more stable future, and a platform from which to continue to fight for long term justice for all middle class and working families.”
The wage increases in the last three years will include step bonuses for those that receive them and those who don’t receive them will receive an additional two percent. And while Gov. Dannel P. Malloy wanted to end longevity bonuses, the unions were able to get him to agree to keep them, but cap them, so those that have had their longevity amount fixed since 1977 – will give up one payment in October 2011.
The agreement also seeks to make big changes to the “other post employee benefits” fund that covers retiree health care benefits and is currently a $20 billion unfunded liability to the state.
The summary says all state employees not currently contributing to the Retiree Health Care Trust Fund will begin contributing 0.05 percent to the trust fund in fiscal 2014 (which starts July 1, 2013), a total of 2 percent in fiscal 2015, and a total of 3 percent in 2016. Each worker’s contribution ends after paying the equivalent of 3 percent for 10 years.
There also were changes to the health care benefit plan. The agreement proposes instituting what is known as Value Based Health Care. The plan would require employees to sign a form pledging to attend annual physicals, age-appropriate diagnostics, and two free dental cleanings per year. Also, employees who have diabetes, asthma, hypertension, high cholesterol, or heart failure will be asked to enroll in a disease management program. The statement notes the five diseases have been shown to respond well to management plans.
Aside from a pre-scheduled estimated 5 percent increase in employee premiums, there does not seem to be any direct changes to employee premium shares. However, should an employee choose not to sign the agreement, they will face significant increases in their premiums.
“Employees who after proper notice refuse to sign the commitment or fail to get their physicals (or if they have a listed disease, refuse to participate in disease management), will have a premium increase of $100 per month, and a deductible of $350 per person per year,” the statement reads. “We hope no employees will make this decision, but every employee will have that choice.”
Thanks to one state employee who used the emergency room 150 times in one year, there is a new $35 co-pay on emergency room visits and changes to the overall structure of the health care plan, which encourages primary care physician visits and chronic disease management.
The changes to the pension system are numerous and complicated depending on the tier to which each state employee belongs. There will be no changes to the normal retirement age for Tier II, Tier IIA until after the expiration of the agreement in 2022. After that date normal retirement age will be three years longer.
They also included a provision to encourage people to work until their retirement age by increasing the cost of the early retirement subsidy from 3 percent to 6 percent.
There is a new Tier III for new employees that preserves the basic structure and benefits of Tier II/IIA and Hazardous Duty. It adds three years to the normal and early retirement ages for Tier II/IIA and changes the final average retirement calculation to five years of services rather than three years of service.
It’s clear from the approximately 75 comments on the State Employees Bargaining Agent Coalition website that not all state employees are ready to support the agreement reached last week by union leadership and the Malloy administration.
But late last week it was still difficult for the 45,000 state employees to figure out the details of the $1.6 billion package since both sides continued to dance around the details in an effort to give local union leadership time to inform their members face-to-face.
Matt O’Connor, spokesman for SEBAC, said the information will be released on the web site Tuesday and 14 of 15 unions, or 80 percent of those voting, will need to ratify it. The voting process could take as long as three weeks, as it did back in 2009 when changes to the 1997 agreement were ratified by SEBAC members.
Michael, an older state employee based on the details in his post, told his fellow employees, “Sorry, call me callous, but for my own survival, I’m voting no.”
Diana joined Michael in his disapproval of the package.
“Anything that messes with my pension will be a NO VOTE,” Diana wrote.
Julio Ramos posted a comment also urging his fellow state employees to vote against the deal.
“Vote no. What kind of deal could this be,“ Ramos wrote. “Vote no and preserve what we all ready [sic] have people.”
“Now I have to work longer to get less benefits. How is that fair. I urge you all to VOTE NO,” Horrible Deal said referring to changes in health care and pension benefits.
Scott had a different view.
“The good thing out of the contract that I’ve heard so far is no layoffs, extending the agreement for 5 years and showing that collective bargaining can work,” he said. “By agreeing to this, we keep our right to collectively bargain for benefits and pension. If the vote ends up being “no”, we are taking a huge risk.”
Someone named “K” didn’t think it was such a bad deal.
“1) No furloughs. We have taken furlough days the last 2 years, so this is effectively a raise since we get that money back. 2) Job security for 4 years! Imagine! In this economy! A guarantee for the next 4 years that we cannot be laid off. That is an incredible offer. 3) The two-year wage freeze isn’t THAT bad. We just got a raise on 1/1/11. We’ll get our next raise on 1/1/13, so it really is only a 1 year freeze–we miss our raise next year and then get one guaranteed for the following 3 years. Again, in this economy, that’s not horrible. 4) increasing the retirement age…we have to see the writing on the walls. This is happening everywhere. At least we still have a good pension and not a 401k,” K wrote on the web site.
While there had been plans to release the details on the website Monday, those plans were scrapped by union leaders who decided to postpone the official release until Tuesday.
House Speaker Chris Donovan said when he was briefed on the deal last Friday he was shown the details by Malloy administration Chief of Staff Tim Bannon and Budget Director Ben Barnes, but he was not provided a paper copy.
He said each of the unions will have to look at the details and determine whether it’s a good deal for them. He refrained from offering his opinion of the package, which saves $700 million in the first year and $900 million in the second year.
Sen. Minority Leader John McKinney said when he was briefed by both Bannon and Barnes on Friday he was told a lot of the savings will be achieved because a lot of employees will voluntarily seek to leave state service based on the details of the package.
“They didn’t give us a percentage or a number, but they said that a great deal of saving will be accomplished by people leaving state service due to the changes in their pension and health benefits,” McKinney said Monday in his office. “Pension and health care benefits become less generous over time.”