Category Archives: Benefits

Detroit Bankruptcy Takes Aim at Pensions

Source: Jane Slaughter, Labor Notes, July 19, 2013

…Orr sprung the hurry-up filing yesterday because union pension fund attorneys were scheduled to be in court on Monday, arguing for an injunction against bankruptcy. The state constitution appears to protect public employee pensions: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof and shall not be diminished or impaired thereby.” But proponents of making city workers bite the bullet note that bankruptcy judges have wide latitude to break contracts. …

Policies to Reduce Influenza in the Workplace: Impact Assessments Using an Agent-Based Model

Source: Supriya Kumar, John J. Grefenstette, David Galloway, Steven M. Albert, Donald S. Burke, American Journal of Public Health, Posted online on 13 Jun 2013
(subscription required)

From the abstract:
Objectives. We examined the impact of access to paid sick days (PSDs) and stay-at-home behavior on the influenza attack rate in workplaces.

Methods. We used an agent-based model of Allegheny County, Pennsylvania, with PSD data from the US Bureau of Labor Statistics, standard influenza epidemic parameters, and the probability of staying home when ill. We compared the influenza attack rate among employees resulting from workplace transmission, focusing on the effects of presenteeism (going to work when ill).

Results. In a simulated influenza epidemic the attack rate among employees owing to workplace transmission was 11.54%. A large proportion (72.00%) of this attack rate resulted from exposure to employees engaging in presenteeism. Universal PSDs reduced workplace infections by 5.86%. Providing 1 or 2 “flu days”—allowing employees with influenza to stay home—reduced workplace infections by 25.33% and 39.22%, respectively.

Conclusions. PSDs reduce influenza transmission owing to presenteeism and, hence, the burden of influenza illness in workplaces.
See also:
Universal Paid Sick Leave Reduces Spread of Flu, According to Pitt Simulation
Source: Press Release, UPMC/University of Pittsburgh Schools of the Health Sciences, June 13, 2013

Coming Soon to the Big Apple – Paid Sick Days, as New York City Council Overrides Bloomberg Veto

Source: Elise Gould and Doug Hall, Economic Policy Institute (EPI), Working Economics blog, June 28, 2013

Early Thursday, the New York City council successfully overrode Mayor Bloomberg’s veto of a bill giving New York workers access to paid sick leave, at long last. The bill phases in over two years, beginning in April 2014 for businesses with 20 workers or more.

The Funding of State and Local Pensions: 2012-2016

Source: Alicia H. Munnell, Jean-Pierre Aubry, Josh Hurwitz, and Madeline Medenica, State and Local Pension Plans, SLP#32, July 2013

The brief’s key findings are:
– During 2012, using current GASB standards, the funded status of public plans declined slightly from 75 percent to 73 percent.
– This decline reflected slow asset growth, which was only partly mitigated by reduced liability growth.
– States and localities also continued to fall short on their annual required contribution payments.
– Going forward, the funded ratio is projected to gradually move above 80 percent, assuming a healthy stock market.

Laws Affecting Wellness Programs and Some Things They Make You Do

Source: Robert E. Boston and Brian M. Clifford, Employee Relations Law Journal, Vol. 39 no. 1, Summer 2013
(subscription required)

From the abstract:
The Affordable Care Act will present many employers with a choice: offer affordable health insurance coverage to all employees or face civil penalties. When implemented correctly, a wellness program can be an effective way to decrease the employer’s cost of insurance coverage. Employers should consider the various laws affecting wellness programs to decide whether and to what extent they are right for their business and its employees.

Are You an “Applicable Large Employer” Required to “Play or Pay” under the ACA’s Employer Mandate and the IRS’ Proposed Shared Responsibility Regulations?

Source: David N. Crapo, Employee Relations Law Journal, Vol. 39 no. 1, Summer 2013
(subscription required)

From the abstract:
This article addresses how to determine the number of full-time equivalent employees an employer has for purposes of the Patient Protection and Affordable Care Act of 2010 “Employer Mandate” and what an employer might do to prepare for the 2014 effective date of the Employer Mandate.

The Surrender of Oakland: The 2012 National Agreement between the Coalition of Kaiser Permanente Unions and Kaiser Permanente

Source: John Borsos, WorkingUSA, Volume 16, Issue 2, June 2013
(subscription required)

From the abstract:
A new, controversial agreement negotiated by the Coalition of Kaiser Permanente Unions (CKPU), led by the Service Employees International Union (SEIU) with Kaiser Permanente, the nation’s largest health maintenance organization, may portend a dangerous shift in labor relations in the U.S. In this case, it is the unconditional surrender of a union to a corporation’s agenda. The Surrender of Oakland—embodied in the 2012 Kaiser–CKPU national agreement—represents the complete capitulation of labor to management: in production, in marketing and capitalization, and even by allowing the employer to control Kaiser workers’ lives outside the workplace through an invasive wellness program. Abdicating their role as patient advocates, the new agreement requires SEIU and other coalition unions to promote wellness programs that may not be in anyone’s best interest except for employers trying to shift healthcare costs onto employees.

Truth in Numbers? A Brief History of Cuts to the Employees’ Retirement System of Rhode Island

Source: Monique Morrissey, Economic Policy Institute, Briefing Paper #363, June 20, 2013

From the summary:
…This briefing paper provides an overview of the cuts to Rhode Island’s pension system since 2005. It begins by analyzing the cumulative effects on DB benefits of these cuts. It then examines ERSRI’s normal cost and unfunded liability, as well as benefit levels, prior to the cuts. Following this, the paper analyzes the changes ushered in by the first rounds of cuts (those in 2005, 2009, and 2010) and by RIRSA (which took effect in 2011). This narrative description of the changes since 2005 is followed by a timeline of the changes, which includes conservative estimates of the impact of successive cuts on benefits (see Appendix B for methodological details).

Principal findings include:
• Rhode Island was slower than most other states to fund its pension system. As a result, the Employees’ Retirement System of Rhode Island (ERSRI) had a shortfall even at the peak of the dot-com bubble, despite providing relatively modest benefits. Indeed, workers—many not covered by Social Security—contributed more toward these benefits than their counterparts in other states.
• While workers shouldered most of the cost of current benefits, employers failed to pay even their full (smaller) share, leaving ERSRI among the most underfunded plans in the country.
• Between 2005 and 2010, three rounds of cuts reduced pension benefits for a prototypical 30-year employee by 23 percent. Despite these cuts, the plan’s funded ratio declined further as a result of the 2008 stock market downturn.
• The funded ratio was further reduced by changes in accounting assumptions in 2010 that appeared timed to justify draconian changes to the system.
• The Rhode Island Retirement Security Act of 2011 (RIRSA) slashed defined-benefit pension benefits by roughly half (less for short-tenure workers, more for long-tenure workers) and introduced a supplemental defined contribution plan.
o This hybrid plan costs taxpayers more than the old system despite providing a less valuable and less secure benefit to workers.
o When taking into account the supplemental defined contribution plan, a prototypical 30-year worker would experience a cumulative 34 percent reduction in benefits between 2005 and 2012, with a quarter of 30-year workers experiencing cuts of 40 percent or more, depending on investment returns.
o The savings from RIRSA come not from switching to a hybrid system, but rather from cutting accrued benefits—a move that is being challenged in court.