Local Governments Report Changes to Benefits

October 10, 2012 (PLANSPONSOR.com) In the wake of the recession, local governments have made changes to retirement and health care benefits offered to employees.

According to a report released by the ICMA-RC and Center For State & Local Government Excellence, in 2009, 21% of local government human resource executives surveyed reported that their government had made changes to employee retirement benefits since the beginning of the recession; 53% reported having made changes to health care benefits. In 2012, 33% of local government human resource executives reported changes to retirement plans within the past year, and 59% reported making health care changes.   

More specifically, in 2012, 23% of respondents reported that their government increased new employee contributions to pension plans, 14% increased age and service requirements for normal retirement for new hires, and 9% reported that pension benefits were reduced for new hires. For current workers, 23% of those surveyed from local government answered that current employee contributions to pension plans had been increased over the past year, 8% said employer contributions had been increased for current workers, and 3% had reduced/eliminated cost of living adjustments within the past year.   

Among the top three changes to health benefits, 50% of the local government human resource executives reported that their government shifted more health care costs from employer to employees through higher premiums, co-payments and deductibles over the past year. Twenty-seven percent of the respondents’ governments had created wellness programs, and 11% had shifted more costs from employer to retirees within the past year.  

The groups also found that in 2009, 44% of retirement-eligible local workers were delaying retirement and 12% were accelerating their retirement plans. In 2012, retirement delays remained high, with 47% of local respondents reporting that their retirement-eligible colleagues are delaying their retirement. Twenty percent are accelerating their retirement plans.  

The report is at www.icmarc.org/Documents/educomm/Briefing201210.pdf.