Benefits March 21, 2008

Psychologically Healthy Workplaces Good for Business

March 21, 2008 (PLANSPONSOR.com) - Winners of the American Psychological Association's 2008 Psychologically Healthy Workplace Award (PHWA) provide evidence that workplaces that invest in the well-being of employees enjoy benefits such as reduced employee stress, lower employee turnover, and enhanced organizational performance.
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An Association press release said psychologically healthy workplace practices fall into five categories: employee involvement; health and safety; employee growth and development; work-life balance; and employee recognition. Qualities that define a psychologically healthy workplace include: employee participation in decisionmaking, skills training and leadership development, flexible work arrangements, and programs promoting healthy lifestyle and behavior choices.

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The five winning organizations report an average turnover rate of just 11% – significantly less than the national average of 40% as reported by the U.S. Department of Labor’s Bureau of Labor Statistics, the release said. Surveys completed by the winning organizations show that only 21% of their employees reported experiencing chronic work stress compared to 34% nationally, and more than 80% of the winners’ employees reported being satisfied with their job, compared to only 66% nationally.

Winners also report cost savings and increased productivity from their workplace practices. Examples in the release included:

  • At Westminster Savings Credit Union, high employee satisfaction and low turnover means that two thirds of WSCU’s openings are filled internally, lowering administrative costs.
  • In 2007, Nike Tennessee increased productivity by 51%, while reducing injury rates by almost 30%.
  • At Cooperativa de Seguros Multiples, an insurance company in Puerto Rico, employee loyalty is high with a 15-year average length of service and a turnover rate of less than 2%.

The other two winners were Arkansas Educational Television Network and Porter Keadle Moore in Georgia. In addition to the PHWA winners, nine organizations received Best Practices Honors for an innovative program or policy that contributes to a psychologically healthy work environment.

Details on the Awards and Honors winners and their best practices are here .

More about the Awards program can be viewed at www.phwa.org .

Administration March 20, 2008

NJ not Doing its Share of Funding Pensions

March 20, 2008 (PLANSPONSOR.com) - A new report shows local governments in New Jersey are slated to pay more than $1.2 billion toward the retirement plans of their police officers, firefighters, and government workers next year - almost $200 million over the amount included in this year's municipal budgets.
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The Star-Ledger reports the Public Employees Retirement System board of trustees was presented with the fund’s annual check up this week. The board was told the fund contains only 68.8% of the amount needed to meet the long-term cost of benefits promised to its state government members and 81% of the amount needed to fund the benefits promised to local workers.

State law requires local governments to make the full payment due for their pension benefits for the first time in a decade. However, the state is not held to the same standard. Governor Jon Corzine’s proposed budget includes less than half the amount Janet Cranna, the actuary who presented the report, calculated the state should pay into the funds, increasing the shortfall by another $300 million.

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The shortfalls in both accounts grew over the past year, despite robust investment returns and increased contributions by employees, according to the news report. Cranna said continued underfunding by the state accounted for most of the growing shortfall, with higher-than-expected salaries adding to the problem.

Commenting on the report, board member Ned Thompson said: “The problem I have with this as an actuary and as a taxpayer is, A, the inability of the Legislature to recognize that they messed up and, B, to take any action to fix it,” according to the Star-Ledger. “To fix it is going to take a significant amount of work; it’s just a question of whether they have the will to do it.”

The state’s three largest retirement funds – the Teachers Pension and Retirement Fund, the Public Employees Retirement System, and the Police & Firemen’s Retirement System – now have a shortfall of $26.8 billion, an increase of about $2.5 billion from the year prior.

Last week, trustees of the Police and Firemen’s Retirement System received a similar update, showing those accounts contain only 77.6% of the amount needed to pay the long-term benefits promised to those members.   In 2006, a New Jersey law enforcement union sued the state to to make up for years of shortchanging the officers’ retirement system (See NJ Police Union Hits State with Pension Underfunding Suit).

Last week, The Chicago Public Schools system filed a similar suit charging it was unconstitutionally required to maintain certain pension funding levels despite a shortfall in state funding (See Chicago Schools Sue State over Pension Funding ).

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