Health care for life Benefit yanked
Health care for life Benefit yanked
By SCOTT SWANSON Journal Staff Writer
MARQUETTE — Three former city of Marquette employees who retired with less than 10 years of service and began collecting lifetime health care coverage are not entitled to the benefit, the Marquette City Commission decided this morning.
Meeting in special session, the commission voted 5-2 not to provide health care to former City Manager Gerald Peterson, former arts and culture Director Reatha Tweedie and former executive assistant Michelle Doucette. Other past city managers — all of whom put in 15 years of service or less to the city — also will not receive health care.
“I have never in eight years experienced such overwhelming outrage from taxpayers, everywhere I go.” Commissioner Mike Coyne said. “That’s all I have to say.”
Coyne, Mayor Tony Tollefson and commissioners Joe Lavey, Beth Linna and Johnny DePetro voted for the motion. Commissioners Dan Dallas and Tom Tourville voted nay, saying that more time was needed for discussion.
The commission this morning also unanimously approved a plan to cover 23 former department heads and middle managers who retired under the city’s traditional defined benefit plan. And a motion to approve a retirement health care plan for 21 current employees not represented by unions was moved to a second reading.
Last Monday, the commission voted unanimously to cut off health care benefit payments to all non-represented retirees. The action was taken following the completion of a report by city attorney Ron Keefe that concluded the city commission had never officially approved a health care plan for non-union retirees.
The retiree plan approved by the commission this morning is the same as it was under the defined benefits plan that the city used for years. Under that plan, employees could begin collecting retirement health care benefits after reaching the age of 55 with 25 years of service to the city.
In 1998 the city commission adopted a second option — a defined contribution plan that carried a two-year vesting period and was designed to allow employees control and portability of their accumulated retirement assets.
Since then, the city was operating under the opinion that the health care benefit portion of the fixed retirement plan was not separated from the pension — meaning that those employees who became vested after two years in the defined contribution plan automatically became eligible for their retirement health benefits.
However, the only linkage between the two-year vesting period in the defined contribution plan and and the eligibility for retiree health insurance was an Aug. 28, 2003, memo from Peterson, according to Keefe’s report, and the change was never approved by the city commission.
In the last fiscal year, the city paid more than $33,000 in health insurance premiums for Peterson, Tweedie and Doucette. Peterson, 47, “retired” after nine years as Marquette city manager in late July 2005, during a period of political upheaval in the city. Less than a month later, four of the seven sitting city commissioners were recalled by Marquette voters. Tweedie, 51, and Doucette, 51, retired shortly after.
“We took an oath to protect the city’s best interest. We have a responsibility to the citizen taxpayers,” said Tourville, who is the owner of Tourville Apartments. “As an employer, I feel we have a duty to treat our employees with dignity and respect, to treat them fairly, and to do something here that’s going to be fair and reasonable.”
Tourville initially moved to cap premium payments for current employees at the current amount to guard against skyrocketing health care prices.
However, Tourville amended his motion to remove the cap language at the request of Coyne, who argued that retirees should know beforehand whether their premiums would be capped or not.
“I don’t have problems with capping things if you know up front that it’s going to be capped,” he said. “To change it, I do have a problem with that.”
For current employees, City Manager Judy Akkala has recommended a pro-rated payment plan that some commissioners expressed concerns over. Under the plan, department heads with 25 years of service would receive 100 percent of the monthly premium, 80 percent for 20 years of service, 65 percent for 15 years of service, 10 percent for 10 years of service and zero for less than 10 years.
Middle managers would receive 80 percent of the premium for 25 years, 65 percent for 20 years, 50 percent for 15 years, 40 percent for 10 years and zero for less than 10 years.
For department heads and middle managers hired prior to Sept. 3, 2002, the retiree’s spouse could be included under the plan. The spouse would not be eligible for benefits for retirees hired after Sept. 3, 2002.
Several commissioners were uncomfortable providing health care for less than 20 years of service to the city, and directed Akkala to provide new recommendations.
The health care plan for current employees will be discussed at a second reading at the commission’s regular meeting next Monday. The commission also still has to grapple with a retirement health insurance for the current and future city managers.
Several city employees and retirees attended this morning’s meeting.
“It’s alarming that benefits can get changed,” Tollefson said. “That’s an issue that all of us across the country are going to have to be more concerned with, because worker’s rights and individual rights have been trampled upon, and are going to continue to be ravaged in future generations because of court rulings and the way insurance in this country is now administered.”
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