Savings: The 2011 wage agreement is $2.5 billion less
costly to the state than the 2007 agreement, if adopted through the state
workforce.
Health Care System Redesign: The agreement includes a
series of reforms in the employee health care system which will save $54 million
annually and $248 million over the contract term, for PEF alone.
Health Care Contributions: The agreement includes
substantial changes to employee health care contributions bringing public
employee benefits more in line with the private sector. The contribution for
health care benefits have not changed in 30 years, while the cost of the state's
health care program has increased 100 percent in the past decade. The agreement
reflects a two percent increase in contributions for Grade 9 employees and
below, and a six percent increase for Grade 10 employees and above. (Under the
agreement, for example, the state will pay 69 percent of family coverage for a
Grade 10 employee and above, and the employee will pay 31 percent. The prior
split was 75 percent state/25 percent employee. For individual coverage, a Grade
10 employee and above will pay 16 percent and the state share will be 84
percent. The prior split was 10 percent employee/90 percent state).
Savings: The PEF agreement results in $42 million in annual
savings from this provision, and $193 million over the contract term.
Health Care Opt Out: For the first time, the state is
offering an opt-out option. Health care premiums cost $16,600 for family
coverage and $7300 for individual coverage. Employees electing to opt out of the
health insurance program must provide proof of alternative coverage and will
receive $1000 or $3000 for the cessation of individual or family coverage,
respectively. This will save the state thousands of dollars for each employee
who opts out.
Savings: The opt-out will save $5.8 million annually and
$25 million over the contract term for PEF alone.
Health Benefit Redesign: The health benefit plan system of
co-pays, deductibles, and programs has been redesigned to encourage healthy
choices and control costs of pharmaceutical products. For example, for the first
time the plan will cover the use of nurse practitioners and "minute clinics" and
encourage employees to use these services when appropriate instead of hospital
emergency rooms.
Savings: The PEF savings for this provision are $8.6
million annually and $37 million over the contract term.
Deficit Reduction Leave: Under the agreement, employees
will take a five day unpaid deficit reduction leave during fiscal year 2011-12
and four days unpaid leave during fiscal year 2012-13. The value of the days
taken not worked will be deducted from employee pay over the remaining pay
periods equally during the fiscal year in which they are taken. Employees will
be repaid the value of the 4 days from 2012-13 in equal installments starting at
the end of the contract term.
Savings: The furloughs will yield $360 million in savings
if adopted by all bargaining units.
Performance advances, longevity and retention payments:
Performance advances and longevity payments will continue to be in effect.
Current employees who remain active through 2013 will earn a onetime retention
payment of $775 in 2013 and $225 in 2014 in recognition of working without a
wage increase for three years.
Layoff Protection: PEF employees will receive broad layoff
protection for fiscal year 2011-12 and 2012-13 arising from the $450 million
budget gap. Workforce reductions due to management decisions to close or
restructure facilities authorized by legislation, SAGE recommendations or
material or unanticipated changes in the State's fiscal circumstances are not
covered by this limitation.
The tentative agreement must be ratified by PEF rank and
file members.
Negotiations for the State were led by a special team
appointed by the Governor comprising Todd R. Snyder, Senior Managing Director of
Rothschild Inc. and Co-Head of Rothschild's Restructuring and Reorganization
group; and Joseph M. Bress, former head of the Governor's Office of Employee
Relations and former Vice President of Labor Relations at Amtrak, under the
direction of Howard Glaser, Director of State Operations.