As many LAGERS employers continue to see their rates decline in 2016, some have begun the process of looking into making enhancements to their LAGERS benefit package. Changing benefits certainly does represent a new, and sometimes significant financial investment for an employer and as such, there is often plenty of questions and discussion surrounding the decision, both from internal staff and the public. Having a game plan in place before you begin the process can help ensure that everyone walks away feeling satisfied with the final decision. Here are three simple steps to make changing benefits a smooth process.
Set Your Goals Before You Begin
As an employer who is publicly discussing making a change to their benefit plan, it is firstly important to be clear on the reason why you are considering a benefit change. Every employer’s reason for changing benefits is a little different, but having a clear goal will make it easier to communicate both with staff and the public. For example, a common reason would be, as rates go down, enhancements can provide additional compensation for employees often for the same or close to the same cost as before. Employers can leverage these lowers rates to offer better compensation packages without ever having to increase their payroll, which is a win-win for everyone. Another reason an employer may consider a change is to try and make their benefit package more competitive with surrounding employers. Often, decreasing rates make a benefit change in this circumstance much more realistic, and can help provide an employer with even more tools to attract and retain the highest quality employees into their communities. Another reason could simply be that the employees have come to the employer expressing a desire for better retirement benefits. I’ve worked with countless employers who recognize the value and dedication that their public servants bring to their communities and when these employees voice concern over the financial security of their future, employers often seek solutions and compromise to address these concerns. Again, as simple as it may sound, being clear on your goals upfront with help create the best environment for a productive conversation down the road.
Facilitate a Conversation, Even if it’s Tough
One of the best philosophies we subscribe to as LAGERS staff is to always have a conversation, even if it’s a tough one. I am a personal believer in the adage that a tough conversation is better than no conversation at all, and sometimes addressing concerns openly and honestly can help resolve many issues that could otherwise turn unsavory. When an employer has decided to proceed with looking into an enhancement, the first step is to request an actuarial cost study. Once an employer has received their study, it must by law be made public information for 45 calendar days before a board can take any action.
This public information period is important because it allows an opportunity for anyone from the public to comment or raise questions about the proposed change. And as an employer, this public period is a chance to address these questions or concerns that may arise. Having your goals clearly set beforehand will help make these conversations more clear and straightforward. If there is concern from the public, facilitating an open dialogue is extremely important before your board makes a decision. And as always, if you feel like any questions or concerns would be better addressed by LAGERS staff, we are always more than happy to attend a board or council meeting to assist with explaining the benefits and answering questions.
And don’t forget, these changes are for your staff, so communicating with them throughout this process is always important: for example, are they willing to contribute for higher benefits? Or maybe willing to give up future pay raises for a benefit increase? I have never met an employee who didn’t appreciate having their opinion heard when it comes to what is important to them in their benefits package.
Follow Through and Communicate Your Decision
Once you have made a final decision and whether that decision is to move forward with an upgrade or not, it’s important to continue to communicate with all parties that weighed into the decision. If the decision is to pass, take time to explain to employees who were involved in the conversation the effort that went into the process and the reasons, however unpopular, that the board ultimately decided against change. If the decision is to move forward and there was public dissent, using the goals that you set forth at the beginning of the process will make great talking points when fielding questions after the fact. For example saying “we were looking for the most cost-neutral way to create a benefit package that the city can use to attract and retain the highest quality workers into our communities” is probably going to be better received than “our employees wanted higher benefits.” And if you do decide to change your LAGERS benefits, make sure you take the time to explain the impact to your employees. Helping them to understand the value of the upgrade will help each employer maximize this investment in their workforce.
Upgrading benefits can feel like a daunting task, but taking the time to follow these three easy pointers can help ensure that the best decision for your employees, employer, and community can be reached. And as always, LAGERS staff is available to answer any questions throughout the process, so never hesitate to call our office or request a visit.