Benefits December 20, 2005

NYC Transit Strike Fueled by Pension Disagreement

December 20, 2005 (PLANSPONSOR.com) - Early Tuesday morning, New York City's local transit union decided to strike after reaching a deadlock, primarily over pension benefits for new employees, in negotiations with the Metropolitan Transit Authority (MTA).
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The New York Times reports that, while the MTA dropped the demand for the age for full retirement to be raised to 62 from 55, it proposed that new employees pay 6% of salary toward their pensions in their first ten years of employment. Currently transit workers pay 2% of salary toward their pensions.

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Roger Toussaint, president of Local 100 of the Transport Workers Union announced the strike at a news conference at 3 a.m. “New Yorkers, this is a fight over whether hard work will be rewarded with a decent retirement,” he said, according to the Times. “This is a fight over the erosion, or the eventual elimination, of health benefits coverage for working people in New York.”

According to MSNBC, the MTA also wants new workers to contribute 1% of their salary to pay for health insurance. Current workers pay nothing.

Additional employee benefits issues on the table were:

  • pay increases (the MTA proposed 3% annual salary increases, the union wanted more),
  • the union’s request for disaster-preparedness training, and
  • additional holidays; the latest MTA proposal included Martin Luther King Jr. Day, according to MSNBC.

The Times notes it is against the law for public employees in New York State to strike. Workers face fines equal to two days pay for each day of the strike.

Products December 19, 2005

AIG Launches Post-Employment HRA for Public Employees

December 19, 2005 (PLANSPONSOR.com) - AIG VALIC has launched HealthSecure HRA, a health reimbursement arrangement to help public employers manage the growing cost of providing post-employment health care.
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According to the announcement, the HealthSecure HRA is funded by the employer and reimburses qualifying out-of-pocket health care costs and premiums for the employee/retiree, their spouse and IRS-qualifying dependents.   All HRA contributions, investment earnings and withdrawals for qualifying expenses are free from federal taxes to employees and employers.

The HealthSecure HRA allows participants to direct the investments of their account balances from among 13 mutual funds.   Employees can self-direct the investment of the HRA among any of these funds and can change their investment fund allocation as often as once a month.

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AIG is providing the HealthSecure HRA throughHRA Consultants, a Division of VEBA Service Group, LLC.

For more information, contact AIG VALIC at 1-800-448-2542.

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