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I’ve been meaning to post on retiree health care to provide a little more detail about what exactly happened as a result of the new labor contracts.
This year’s negotiations don’t result in any direct structural changes to the program — namely to convert it from a defined-benefit to a defined-contribution plan, as Mayor Jerry Sanders is seeking.
The police and blue-collar employees had one-year deals imposed on them specifying that they negotiate with the city during the next year on the details of a defined-contribution retiree medical plan. The three unions that reached two-year agreements with the city agreed to study the idea for a year and then hash out the details during the following year.
During a press conference this week, Sanders said, “Getting the agreement for everyone to sit down at the table to negotiate that is huge.”
At the end of the contract, the city and unions could put a new agreed-upon plan in place. Or they could impose a plan on the unions (which would almost certainly lead to a lawsuit) or reject the plan and stick with the status quo.
If the city put a defined-contribution plan in place, Sanders guesstimated (his word, not mine) that it would reduce the $1.2 billion unfunded health care liability by around $600 million.
Our friends at NBC 7/39 have the raw video of that press conference: