2012‐2016 Working & Wage Agreement Ratification Discussion
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TriMet Board Meeting Presentation
October 22, 2014
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Tentative Agreement vs. Status Quo
Term: •
4‐year agreement ending 11‐30‐2016 (SQ: 3‐year agreement).
Wages: •
0% on 12/1/12, 0% on 12/1/13, 3% on 12/1/14, 3% on 12/1/15 (SQ: 3% ‐ 5% COLA; retroactive effective date).
•
Journey Worker Increase: $1/hr. pay increase upon ratification (approximately 345 journey workers.)
Active Employee Healthcare:
•
Plans Expanded: 80%/20% Regence PPO plan; 90%/10% Regence PPO plan, Regence HPHP w/HSA and a $10 co‐pay Kaiser plan; Moda dental ($2,000 v. $1,000 benefit); Kaiser dental (new; replaces Willamette) (SQ: Regence PPO 90/10 plan, Kaiser HMO $5 co‐pay).
Premium Contribution: 5% premium contribution by employees to all plans except the Regence 90/10 PPO
Premium Contribution: 5% premium contribution by employees to all plans except the Regence 90/10 PPO •
(employee pays the difference between TriMet’s 95% contribution to the 80/20 plan contribution and the total 90/10 premium) and the Regence HPHP w/HSA (TriMet makes HSA contribution for the difference between TriMet’s 95% 80/20 plan contribution and the total HDHP premium) (SQ: 0% employee contribution).
•
Part‐Time Operators: Same healthcare benefits as Full‐Time Operators at the same cost (SQ: Premium contribution: 0% single/25% dependents)
contribution: 0% single/25% dependents).
•
Lump Sum Distribution: $425,000 one‐time distribution to ATU members from the $5,550,021 in healthcare costs passed on to employees during 2013 and 2014 pursuant to ORS 243.756.
Retiree Healthcare:
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Lower cost PPO supplemental plan in 2016, providing substantially similar benefits as pp
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•
Medicare Eligible Retirees:
active employees receive (when combined with Medicare/Medicare Part B). Option: Stipend‐$417.36 (Single); $828.47 (Single + 1)
•
New Hire Retiree Benefits: Pre‐65: Employees hired after the ratification date receive an $800/mo stipend to purchase healthcare, increased annually by Portland CPI‐W. Post‐ 65: no TriMet healthcare benefits (SQ: same benefits as active employees until death + 16 years for surviving spouse)
benefits as active employees until death + 16 years for surviving spouse).
•
Kaiser Health Care Side Letter: Elimination of the side letter that retained the pre‐2003 $5 plan design when Kaiser made unilateral changes.
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Tentative Agreement vs. Status Quo
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Direct Hires:
•
Direct Hires‐Apprentices: Discretion to hire ½ of all apprentices annually in each program from the outside.
•
Direct Hires‐Journey Workers: Discretion to hire 5 journey workers annually from the outside.
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Tentative Agreement –
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Notable Miscellaneous Changes:
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•
EAP Program: $55,000 annual payment until the contract ends, then employees move to the TriMet non‐union plan; no payment during hiatus period (SQ: $55,000). •
Recreation Trust Fund: $55,000 annual payment until the contract ends, then the expense will be budgeted in the ;
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District General Fund; no payment during hiatus period (SQ: $55,000).
•
Child Care/Elder Assistance Program: $55,000 annually, but only if fund balance is less than $100,000 as of due date (SQ: $55,000).
•
Grievance Process: Elimination of pre‐filing and Step 3 grievance panel; 14‐month rotation of arbitration panels.
•
Labor‐Managements Meetings: Ad hoc meetings replace the Joint Labor Relations Committee; agreement to study a private exchange health care model for 2016.
•
Funeral/Memorial Leave: 4 days within 120 days (SQ: 3 days; no time limit).
•
Hours of Service (Bus): 10 hours rest between service days (9 hours for Extra Board).
•
Fare Inspector Training: Those performing fare inspections are provided up to 8 hours of annual training in defusing and responding to hostile confrontations (New).
defusing and responding to hostile confrontations Allowances: Uniform allowance: $315 (SQ: $215). Winter coat furnished to all Road, Rail and Training Supervisors (New).
Settlement of Outstanding Litigation:
•
ERB: TriMet withdraws UP 026‐14
ERB: TriMet withdraws UP 026
14 and UP 021
and UP 021‐14;
14; ATU withdraws UP 018
ATU withdraws UP 018‐14
14 and UP 031
and UP 031‐14
14.
•
Court of Appeals: Settlement of UP 042‐12, UP 050‐12; UP 039‐10; (TriMet reimburses $3.6 million in premiums and pays $500,000 for switching costs claim).
•
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Health Care Premiums (Sample)
Medical/Vision
M
di l/Vi i
Regence (Actives/Pre-65 Retirees)
Single
Employee + Spouse
Employee + Child(ren)
Family
Kaiser (Actives/Pre-65 Retirees)
Single
Retiree + Spouse
Retiree + Child(ren)
Family
Dental
Moda *
Single
Employee + Spouse
Employee + Child(ren)
Family
Kaiser**
Single
p oyee + Spouse
Employee
Employee + Child(ren)
Family
2014
90/10 Plan
$834.65
$1,752.80
$1,460.70
$2,337.05
$5 Co-Pay
90/10 Plan
$791.40
$1,662.00
$1,385.05
$2,216.05
$5 Co-Pay
$660.75
$660
75
$1,321.50
$1,189.35
$1,982.24
N/A
N/A
N/A
N/A
2014
2015
$45.59
$86.17
$86.64
$129.95
N/A
N/A
N/
N/A
N/A
* The annual benefit is doubled to $2,000 from $1,000.
** New offering in 2015 (replaces Willamette Dental).
2015
80/20 Plan
HDHP/HSA
$745.85
$1,566.30
$1,305.30
$2,088.50
$599.95
$1,259.90
$1,049.95
$1,679.85
HSA
Contribution
$108.61
$228.09
$190.09
$304.23
$10 Co-Pay
$670.87
$670
87
$1,341.75
$1,207.57
$2,012.62
$62.05
$117.29
$117.93
$176.88
$36.05
$65.75
$72.10
$103.03
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Tentative Agreement: Revenues and Expenditures
Millions
Millions
Tentative Agreement Results in a Sustainable Forecast
SQ: Revenues and Expenditures
$1,100
$1,100
$1,000
$1,000
$900
$900
$800
$800
$700
$700
$600
$600
$500
$500
$400
$400
FY14
FY16
FY18
FY20
Total Revenues
FY22
FY24
FY26
FY28
Total Expenditures FY30
FY14
FY16
FY18
FY20
Total Revenues FY22
FY24
FY26
FY28
FY30
Total Expenditures Both forecasts: no payroll tax rate increase & same economic, ridership, fare, service, capital, pension, OPEB trust funding assumptions
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SQ: Revenues Minus Expenditures & Mos. of Operating Expense in Beginning Unrestricted Fund Balance
Millions
Millions
Tentative Agreement Achieves Long‐Term Structural Balance Between Revenues and Expenditures
$80 $80 $60 $60 $40 $40 $20 $20 Tentative Agreement: Revenues Minus Expenditures & Mos. of Operating Expense in Beginning Unrestricted Fund Balance 2.5 2.7 2.9 2.8 2.0 2.5 3.4 3.4 2.3 2.1 2.3 $0 $0 2.6 0.6 0.3 ($20)
1.5 1.0 0.1 (2.3)
2.2 ($40)
3.9 ($60)
(4.6)
($80)
FY14
FY16
FY18
FY20
FY22
FY24
FY26
2.4 (4.1)
(2.6)(3.4)
3.7 2.1 2.8 2.6 ($40)
(0.2)(0.9)
(1.6)
($60)
3.1 3.0 ($20)
FY28
FY30
($80)
FY14
FY16
FY18
FY20
FY22
FY24
FY26
FY28
FY30
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Tentative Agreement Bends the Cost Curve Favorably, Although Costs Increase Over Time
Costs Increase Over Time
$200
$175
Average annual growth rate per
active & retired employees 1999 – 2012: 8.1%
$150
$125
Average annual growth rate per active
& retired employees 2012 ‐ 2030:
* SQ: 4.8%
TA: 3 7%
* TA: 3.7%
Upward slope reflects additional retirees
in these years.
$100
$75
$50
$25
Current Active & Retiree Medical
FY30
FY28
FY26
FY24
FY22
FY20
FY18
FY16
FY14
FY12
FY10
FY08
FY06
FY04
FY02
$0
FY00
Millions
Historical, SQ & Tentative Agreement Active & Retiree Medical Expense Paid by TriMet
Tentative Agreement Active & Retiree Medical
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OPEB PAYGO Expense for Union Retiree Medical Status Quo v. Tentative Agreement (through 2043)
Status Quo v. Tentative Agreement (through 2043)
Millions
Current and Tentative Agreement OPEB Plan Payouts
$160
$140
$120
$100
$80
$60
$40
$20
Current OPEB Plan Payouts 2042
2040
2038
2036
2034
2032
2030
2028
2026
2024
2022
2020
2018
2016
2014
$0
Proposal OPEB Plan Payouts
Projections by Milliman May 2014, updated for TA changes by TriMet October 2014
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Impact of Proposed Union Retiree Medical Benefits on the OPEB Valuation and Payouts
Status Quo:
Status Quo:
Valuation impacts:
• PV of benefits: $1.392 billion (closed group)
• Actuarial Accrued Liability: $869 million
• Normal Cost: $48 million
Normal Cost: $48 million
• UAAL Amortization: $40 million
Benefit Payments:
• 30 year payouts (open group): $2.095 30 year payouts (open group): $2 095
billion •
Benefit payments not affordable
Note: Total agency OPEB liability is $950 million as of 1/1/14. Only the union portion is shown here.
Tentative Agreement:
Tentative
Agreement:
Valuation impacts:
•
•
•
•
PV of benefits: $ 1.024 billion (closed group)
Actuarial Accrued Liability: $641 million, reduced 26%
Normal cost: $35 million
UAAL Amortization: $29.5 million
Benefit Payments:
• 30 year payouts (open group): $1.313 30
t (
) $1 313
billion, reduced 37%
• Benefit payments affordable
• Avoids $375 million in costs not Avoids $375 million in costs not
included in actuarial valuation by reducing benefit for new hires 9
Recommendation for Ratification
Pursuant to the September 30, 2014, Tentative Agreement, your negotiating team recommends ratification, as agreed by the parties.
Randy Stedman, Executive Director Labor Relations & Human Resources (Chief Negotiator)
Shelly Lomax, Executive Director Transportation
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Claire Potter, Director Budget Financial Analysis & Grants
Dan Caufield, Director Operations Planning & Development
Evelyn Minor Lawrence, Director Labor Relations
Heidi Vass, Benefits Manager
Cynthia Wegesend, Labor Analyst (Note taker)
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