FOR IMMEDIATE RELEASE:
March 23, 2015
Contact: Chris Dauphin
Phone: (615) 256-4533, 800-251-8732
[email protected]
TSEA: Governor Haslam’s policies are creating second-class state employees
NASHVILLE – Recent legislation filed by Governor Haslam’s administration, if passed, would significantly reduce benefits for future state employees. When combined with other recent benefit reductions filed by the administration, two different classes of state employees will exist.
House Bill 648 eliminates all state-funded health insurance plan options for retiree eligible state employees hired on or after July 1, 2015. Currently, the state pays 80% of the premium for retirees with 30 or more years of service, 70% for retirees with 20-29 years of service; and 60% for retirees with 10-19 years of service.
“If the Governor’s latest bill passes, a retiree health insurance plan will no longer be available from the state for future state employees,” said TSEA President Bryan Merritt. “By continuing to reduce benefits for future employees, the state is essentially creating a second-class of state employees. Seemingly, this administration tries to avoid legislative opposition by drafting legislation which strips benefits from future state employees who have no way to object. If it is bad for current employees, it is bad for future employees.”
Future retirees would also no longer be eligible for the state’s Medicare supplement plan, which equates to a loss of $25-$50 in monthly premium support from the state. In addition, under the bill the state may deny coverage to a state employee’s spouse who is eligible for similar group health insurance through the spouses’ employer.
The administration in 2013 passed legislation which significantly changed pension plan benefits for state employees hired on or after July 1, 2014.
All of the recent changes, passed and proposed, establish three levels of benefits for state employees determined entirely by their hire date and separated by only one year. Those differences are outlined below:
- Employee A (Hired before July 1, 2014) – Has a guaranteed pension that is non-contributory with a 1.5% multiplier. Employee can enroll in the state’s retiree health insurance plan upon retirement age.
- Employee B (Hired on or after July 1, 2014, but prior to July 1, 2015) – Pension is not guaranteed, employee must contribute 5% of salary in order to participate and the multiplier is 1%. Employee can enroll in the state’s retiree health insurance plan upon retirement age.
- Employee C (Hired on or after July 1, 2015) – Pension is not guaranteed, employee must contribute 5% of salary in order to participate and the multiplier is 1%. State no longer offers a retiree health insurance plan for this employee.
State employees are not the only group affected by the proposed insurance changes. Several hundred local government agencies including employees in emergency assistance (911) agencies, some utility district employees, employees in county government and public works departments, and others could also feel the impact from this pending legislation.
Founded in 1974, TSEA represents the rights and interests of 43,000 state employees in Tennessee and has a rich history of improving the lives of its state employee members. For further information, visit TSEA’s website at www.tseaonline.org.
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