Retirement benefits may be cut
Affected county and school employees upset
By Greg Pearson STAFF WRITER

Page Dowdy/Chesterfield Observer Dr. Frank Darpli holds the letter he and other Chesterfield employees received last week saying retired county and school employees who are under age 65 will have their health care benefits cut.

County and school employees who were expecting their health insurance premiums to be funded by Chesterfield after retirement are going to have to reach into their own pockets when they turn age 65 to pay for supplemental Medicare insurance.

This announcement came last week as the county tries to deal with escalating retiree health care costs that are expected to climb to $33 million by 2016.

For current retirees age 65 and older, there will be no change in benefits, except that future contributions

by the county and school system will be capped at 3 percent annually, which Chesterfield believes is likely to cover increases for this group.

The proposed change would provide future retirees and retirees who are not yet age 65 a monthly contribution equal to $4 for each year of full-time service with the county or schools once Medicare becomes their primary coverage at age 65. For example, a 65-year-old retiree with 30 years of service would receive $120 a month toward the cost of a Medicare supplement plan. Typically, that coverage now costs $153 per month. This monthly contribution is in addition to the $40 per month that retirees currently receive from the county and schools toward Medicare Part D prescription drug coverage and the approximately $17 per month they receive for dental coverage.

For school employees who already qualify for the $4 state health credit when they retire, an additional $2 per year of full-time service will be paid toward retiree health care at age 65 and beyond. This includes teachers, school administrators, school clerical support and instructional assistants as determined by the Virginia Retirement System. The contribution toward Medicare Part D prescription drug and dental coverage would continue for this group as well.

In letters that went out to retirees and current school and government employees last week, County Administrator Jay Stegmaier and Superintendent Marcus Newsome wrote the changes in health care benefits were necessary because failing to act might jeopardize Chesterfield's AAA bond rating.

"I went from a valued asset to an unfunded liability," complained 60-year-old Dr. Frank Darpli, a former psychologist for the Community Services Board who retired from the county after 30 years. "The county needs to do something, and it could have been worse, but the approach… means a penalty for those who haven't reached 65 and retired. Makes you wonder what they are going to do next."

"A lot of people in the school system accepted the trade off of lower salaries for higher benefits," commented Lois Stanton, executive director of the Chesterfield Education Association. "That was the expectation. Losing any benefit isn't a pleasant experience."

Without the change, Stegmaier said the estimated unfunded liability was $415 million over 30 years, requiring a $36 million contribution annually. "We had a lot of people studying this," he said. "The change reduces the unfunded liability to $236 million." The change in health care benefits will have to be approved by the school board and board of supervisors, and the county board will have to set up a trust fund early next year in time for the FY09 budget.

Scott Zaremba, assistant director of human resources for the county, compared it to a mortgage payment. "Without making this change, we couldn't afford $36 million a year," he explained. "By making this change, it's only $20 million a year, and we're already paying $17 million. So all we have to come up with is $3 million more [per year]. That's fundable."

Meetings to provide additional information for county government employees and retirees are scheduled on Dec. 6 and Dec. 10 from 1-3 p.m. in the Public Meeting Room, located at 10001 Iron Bridge Rd.

School employee meetings are scheduled on Dec. 3 at 4 p.m. at Monacan High School, 11501 Smoketree Dr., and on Dec. 11 at 4 p.m. at the Fulghum Center, 4003 Cogbill Rd. School retiree meetings are scheduled on Dec. 4 at 3 p.m. at the Fulghum Center and on Dec. 10 at 3 p.m. at Midlothian High School, 401 Charter Colony Pkwy. A joint meeting for school employees and retirees is scheduled on Dec. 5 at 4 p.m. at Carver Middle School, 3800 Cougar Trail.

If approved by the board of supervisors and school board, the adjustments will take effect Jan. 1, 2009.