State Employee Compensation Joint Committee on Appropriations - - PowerPoint PPT Presentation

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State Employee Compensation

Joint Committee on Appropriations

Laurie R. Gill, Commissioner

Bureau of Human Resources

January 18, 2017

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Workforce Demographics

AVERAGES Age 43.9 Age at Hire 32.6 Years of Service 11.8 Years to Retirement Eligibility 19.1 Annualized Pay $46,693 All information represents only Executive Branch employees and does not include Board of Regents or elected officials’ employees,

• ther than the Office of the Governor.

0.5% 16.0% 23.4% 34.5% 22.5% 3.0%

Employee Age

21 and Younger 22 - 29 30 - 39 40 - 54 55 - 64 65 and Older

0.4% 34.6% 34.5% 30.6%

Generation

MATURE BABY BOOMER GEN X MILLENIAL

38.0% 16.7% 13.7% 9.4% 8.1% 6.3% 7.7%

Years of Service

5 or less 6 to 10 11 to 15 16 to 20 20 to 25 26 to 30 30 +

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Workforce Numbers by County

6 38 82

633

67 85 14 47 33 6 8 12 16 28 30 8 9 3 54 10 1

2,489

10 73 4 5 5 3 6 49 10 279 360 102 2 9 5 32 5 150 2 7 211 683 116 26 14 4 10 3 28 7 89 9 9 4 5 145 14 28 13 32

1,169 All information represents only Executive Branch employees and does not include Board of Regents or elected officials’ employees,

• ther than the Office of the Governor.

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Workforce Density by County

Number of employees: More than 500 101 – 500 31 – 100 11 – 30 10 or Fewer

All information represents only Executive Branch employees and does not include Board of Regents or elected officials’ employees, other than the Office of the Governor.

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Turnover & Unemployment

All information represents only Executive Branch employees and does not include Board of Regents or elected officials’ employees,

• ther than the Office of the Governor.

2.8% 3.1% 4.9% 5.0% 4.7% 4.3% 3.8% 3.4% 3.2% 2.7% 13.5% 12.4% 10.5% 10.8% 12.2% 14.4% 13.5% 13.3% 13.5% 13.9%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 State Unemployment State Employee Turnover

Recession No Pay Increases

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Compensation Philosophy Components

• Guidelines for structure designs
• Method of establishing compensation
• Pay delivery mechanisms
• Market & pay for performance
• Definitions of labor market & level of

competitiveness

• Statements of plan management,

accountability & affordability

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Salary Structure Adjustments

• Structure is a hierarchy of pay ranges
• Increase market values based on

market data

• Independent of appropriated annual

pay increases

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Salary Structure Adjustments

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Salary Structure Adjustments

• Structure is a hierarchy of pay ranges
• Increase market values based on

market data

• Independent of appropriated annual

pay increases

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What is a Pay Range?

Minimum Market Value Maximum Typically 80% of market value 50th Percentile of market data Typically 120% of market value

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Standard Pay Adjustments

When funding is available:

Movement toward Market Value

• Increases base pay toward, but not above

market value

• Based on market data
• General, medical, & law enforcement receive

same increase

• Career band increases are specific to the
• ccupation

Pay for Performance

• Increases base pay up to maximum of range
• Based on employee’s performance ratings

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Artificial Minimums

• Most pay ranges have artificially low

minimums

• Funding was not available for full

implementation

• BHR is committed to increasing artificial

minimums to market minimums

• Raising minimums will increase our

competitiveness in labor market

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Pay Range Example

(with artificial minimum)

Minimum Market Value Maximum 80% 100% 120% Artificial Minimum 72%

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Total Remuneration Study

Examine competitiveness of all elements

• f compensation:
• Salary structures
• Base pay
• Leave benefits
• Retirement
• Health, dental, vision & life insurance

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FY18 Governor’s Budget Recommendations

• Market adjustment: 1%
• Adjust artificial minimums to 90% of true

market minimums

• 4% increase in cost to the state for

Employee Health Insurance

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FY18 Governor’s Budget Recommendations

General Fund

Market Adjustment of 1% $3,650,333 Pay for Performance/Move Toward Market $0 Adjust General Pay Structure Minimums $779,087 Health Insurance $1,820,609 Total Cost of Recommendation $6,250,029 Remaining FY17 Compensation Pool ($144,090) Total Increase for Compensation Plan $6,105,939

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Health Plan Overview

• Self-funded plan
• Employer assumes the risk
• No premiums paid to an insurance company
• Self-funding avoids built-in profit margin
• Allows for greater flexibility in plan design

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Health Plan Challenges

• Contracting with vendors
• Claims volatility
• Risk mitigation

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Health Plan Design

Two plan options

• $1,800 high-deductible plan
• $750 low-deductible plan

Financial incentives for member engagement

• Three wellness qualifications:
• Health screening
• Online health assessment
• Earn 100 wellness points

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FY18 Plan Design Changes

Low Deductible plan

• Increase annual prescription drug deductible

from $50 to $100

• Reduce cost of 90-day supply of maintenance

meds from 3 times the 30-day supply cost to 2.5 times the 30-day supply cost High Deductible plan

• Implement a preventive drug formulary to

provide maintenance meds at a lower cost

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FY17 Average Enrollment

• 13,068 employees, pre-65 retirees & COBRA

members

• 13,448 spouses and dependents
• 377 employees (3%) opt-out

Opt-outs must provide proof of creditable coverage in alternative group health plan.

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Health Plan Members by County

63 13 62 9 429 61 44 35 46 36 494 31 168 81 57 131 81 194 52 79 31 3,069 100 644 257 4,472 42 41 59 388 596 16 46 49 114 36 14 34 46 82 1,431 128 11 798 2,161 269 241 24 195

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Data as of December 2016 for Actives, pre-65 Retirees, and COBRA members including employees, spouses, and dependents. The South Dakota State Employee Health Plan covers employees in the executive branch, elected

• ffices and Board of Regents.

39 443 294 24 163 38 53 90 2,840 839 79

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Full Accrual Basis Financial Statement

$8,662 Base Recommended ($2,251) One-time Increase Reduction $342 Employer Rate $6,411 $8,387 $8,729 Estimated Estimated FY 2016 FY 2017 FY 2018 Revenue Contributions to Plan Employer Paid $83,247,703 $108,654,184 $112,445,779 COBRA, and Employee Paid for Dependents $14,029,744 $10,583,689 $11,393,800 Interest Revenue $691,523 $600,000 $500,000 Refund of Prior Years Expenses* $5,110,696 $3,200,000 $3,200,000 Total Revenue $103,079,666 $123,037,873 $127,539,579 Expenses Claims $102,552,150 $104,284,414 $116,587,349 Employer Life Claims $7,500 $7,500 $7,500 Administration $16,140,526 $16,793,731 $14,481,415 Total Expenses $118,700,176 $121,085,645 $131,076,264 Reserve Obligation $11,910,674 $10,262,551 $11,573,146 Current Year Over/(Underrecovery) ($27,531,184) ($8,310,323) ($15,109,831) Prior Year Over/(Underrecovery) $28,773,806 $13,153,296 $15,105,524 Cumulative Over/(Underrecovery)** $1,242,622 $4,842,973 ($4,307) IBNP-Incurred But Not Paid included in claims amount $11,910,674 $10,262,551 $11,573,146

*Includes subrogation, adjustment of prior year claims and pharmacy rebates. **Cumulative Over/(Underrecovery) is the analysis of the revenues and expenses since the beginning of the program.

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