employee salaries & benefits Commission on Employee Retirement - - PowerPoint PPT Presentation

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employee salaries & benefits Commission on Employee Retirement - - PowerPoint PPT Presentation

May 03, 2023 275 likes •535 views

Octob ober 2016 Prior JLARC studies of state employee salaries & benefits Commission on Employee Retirement Security & Pension Reform JLARC is a joint commission with 15 members General Assembly Senate House e of Delega egates

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Commission on Employee Retirement Security & Pension Reform

Prior JLARC studies of state employee salaries & benefits

Octob

  • ber 2016
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JLARC

JLARC is a joint commission with 15 members

House e of Delega egates es Senate Finance nce Commi mmitt ttee ee (2 member mbers) s) Appropri priat ation ions Commi mmitt ttee ee (5 member mbers) s) JLARC C Staff JLARC (15 Member mbers) s) 9 House 5 Senate 1 1 ex officio icio General Assembly

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JLARC

2016 JLARC members

Delegate David B. Albo Delegate M. Kirkland Cox Senator Emmett W. Hanger, Jr.* Senator Janet D. Howell Delegate S. Chris Jones* Delegate R. Steven Landes Delegate James P. Massie III* Senator Ryan T. McDougle Delegate John M. O’Bannon III Delegate Kenneth R. Plum Senator Frank M. Ruff, Jr.* Delegate Lionell Spruill, Sr. Martha Mavredes, Auditor of Public Accounts (Ex-Officio) Delegate Robert D. Orrock, Sr., Chair Senator Thomas K. Norment, Jr. ,Vice-Chair*

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*Also member of Commission on Employee Retirement Security & Pension Reform

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JLARC

JLARC conducts evaluations of state agencies and programs, and oversight

  • Informs policy makers
  • Ensures government programs comply with legal

authority and funds are used appropriately

  • Enhances performance of agencies and programs
  • Improves effectiveness of services to citizens
  • Produces cost savings and efficiencies

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JLARC

General Assembly designates topics for evaluation by JLARC

  • Typical process is through a Joint Resolution of House
  • r Senate
  • Periodically directed through other means

(Appropriation Act, Resolution of the Commission)

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JLARC

Agenda

  • 2008 study
  • 2011 study
  • Lessons learned

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JLARC

Key Findings from 2008 JLARC study

  • Total compensation is an important, but not the only, factor

that influences recruiting & retention

  • State’s total compensation was 96% of market median
  • More strategic and data-driven approach needed to

managing total compensation

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JLARC

Employees chose state service for a variety of reasons, including job stability and benefits

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Source: JLARC staff survey of classified state employees, 2008.

  • Misc. / Unique

reasons, 23% Job stability / security, 18% Health benefits, 14% Retirement benefits, 10% Leave benefits, 10% Best fit for skills / interests, 11% Believe in mission, 7% Best job available, 7%

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JLARC

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Source: JLARC staff survey of employees who left state employment, FY 2008.

Employees left state service for a variety of reasons, including low salary and poor mgmt

Low salary, 31%

  • Misc. / Unique

non-work reasons, 29% Poor management, 15% Lack of career path, 10% Misc / Unique work-related reasons, 15%

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JLARC

Salary mattered most among aspects of total compensation, but importance varied by age

  • Salary was most important aspect of total compensation for

employees of all age groups

  • 4x more important than second most important aspect (health

insurance)

  • Less important as employees got older
  • Retirement plan was less important for younger employees
  • 7x more important for employees 61 to 65 than for

employees under age 26

  • Work / life balance was 6x more important for employees

under age 26 than for those age 61 to 65

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JLARC

Mercer: Virginia’s cash compensation was below, but benefits were above, the market median (2008)

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Total Compensation = 96% 96%

20 40 60 80 100 120 140%

Total Benefits = 108% Total Cash = 88% 88% % of Market Median

Salary Bonus

Medical Dental Ret (DB) Ret (DC) Ret

(Medical)

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JLARC

Mercer: Competitiveness varied by job type

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Range of Competitiveness (% of Market Median) # of Job Roles in Range % of Total Job Roles Benchmarked

<90% 7 16.3% 90% - 110% 23 53.5 >110% 13 30.2

  • Job roles with above-average turnover tended to

receive less competitive total compensation

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JLARC

Agency requests for salary increases often lacked information to assess need for funds

  • Reviewed FY 2009 agency budget decision packages

requesting salary increases

  • Most packages did not sufficiently address
  • Whether purposes of salary (recruit, retain, motivate) were

being achieved

  • How salaries & benefits compared to other employers
  • Impact of the agency’s inability to achieve purposes

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JLARC

2008 JLARC recommendations

  • Annual total compensation statement for each

employee

  • Develop total compensation strategy
  • Create compensation advisory council
  • Create additional structure within job roles
  • Require budget decision packages requesting

salary increases to address purpose, comparison, & impact

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JLARC

Agenda

  • 2008 study
  • 2011 study
  • Lessons learned

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JLARC

Key Finding from 2011 JLARC study

  • State’s total compensation had fallen to 94% and

90% of market median

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JLARC

Mercer: Total compensation for VRS Plan 1 employees was 94% of market (2011)

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Total Compensation = 94 94%

20 40 60 80 100 120 140%

% of Market Median

Salary

Medical Ret (DB) Ret (DC)

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JLARC

Mercer: Total compensation for VRS Plan 2 employees was 90% of market (2011)

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Total Compensation = 90% 90%

20 40 60 80 100 120 140%

% of Market Median

Salary

Medical Ret (DB) Ret (DC)

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JLARC

Total compensation has continued to evolve since completion of 2011 JLARC study

  • In 2011, Mercer partially attributed state competitiveness to

the defined benefit retirement plan

  • Further changes made to retirement plans since completion
  • f study, most notably the hybrid retirement plan
  • No comprehensive benchmarking performed since

implementation of hybrid retirement plan

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JLARC

Agenda

  • 2008 study
  • 2011 study
  • Lessons learned

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JLARC

Analytical rigor, comprehensiveness, & specificity matter when comparing salaries & benefits

  • JLARC contracted with Mercer human resources

consulting for both 2008 and 2011 studies

  • Rigorous methodology to monetize and compare benefits

across employer types

  • Comprehensive access to data on public and private

sector employer salaries and benefits

  • Job and employer-specific, rather than aggregate,

comparisons

  • Much more useful if need to prioritize salary or other

compensation actions to specific jobs or agencies

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JLARC

Mercer broadly analyzed total compensation (2008), then focused more on retirement plan (2011)

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Study Major Mercer er Deliv iverab ables es Cost st 2008

  • Analysis of total compensation trends & best

practices

  • Assessment of effectiveness of state total

compensation

  • Comparison of value of state employee salaries &

benefits to other major employers

  • Options & impact

$318,450 2011

  • Value & effectiveness of retirement programs
  • Comparison of value of state employee salaries &

benefits to other major employers

  • Options & impact

$143,800

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JLARC

Key questions for consideration

  • How has state’s relative competitiveness for salaries

and benefits changed?

  • What matter more to workers; salaries or benefits?
  • Salary was more important for all age groups in 2008

JLARC study

  • Are there cost-effective ways to strengthen the state’s

competitiveness in the employment marketplace?

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JLARC JLARC http://j tp://jlar arc.vi .virginia.g ginia.gov/ (804) 786-1258 1258

Discussion? Questions?

Justin Brown, Associate Director

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