Two great news items: SDRS funds up 14.9%; SDBOR offering reduced tuition to state employees at CUCs

SDRS to meet April 3-4, 2013

Successful Session Sees Salary Increases

Changes to State Health Plan Coming

• 5% dependent premium increase for all plans.
  • The FY 2013 rates for active employees in 2013 are here. Apply 5% to the applicable rate with a dependent to find the FY 2014 rate, which begins on July 1. Example: Employee and One Child - FY 2013 rate is $41.35 semimonthly; FY 2014 is $43.42 semimonthly; that's a 5% increase of $2.07 semimonthly.
• 12% retiree premium increase.
  • The FY 2013 rates for retirees are here. Apply 12% to the applicable rate to find the FY 2014 rate.
• 5% COBRA increase.
• Co-pays removed on $500 and $1,000 deductible plans, except the ER co-pay, which remains.

The employee cost of these changes is $5.6 million; that's the amount of increase that users of the state health plan will pay over their cost in FY 2013. The $5.6 million comes from an additional $1.1 million in premiums, and $4.5 million in member cost sharing.

The state's costs are increasing as well. FY 2014 will see the state invest an additional $12.3 million in the health plan. The Legislature, in Appropriations, decided against a proposed wellness plan that would have cost an additional $8.1 million. That wellness plan would have alleviated the cost born by employees with the premium and cost-sharing changes because the bulk of the funds would have gone to employees who successfully completed quarterly wellness initiatives. There will be exploration and discussion of wellness initiatives over the summer.

SDRS state employee representative review of Oct. 18 SDRS meeting

After all was said and done very little changed at the South Dakota Retirement System meeting on Wednesday, Oct. 17. Benefits were left untouched and will probably remain that way this year. The day was spent trying to get a clear picture of where the system stands. In a system that has so many variables, it is difficult to determine if we currently have enough invested and are collecting enough contributions to sustain the system into perpetuity. Assumptions such as investment returns, retirement ages, final average salaries, mortality rates and many others have been set. The problem is we are trying to determine what will happen over the next 30 to 40 years. If our estimates miss even slightly when it is multiplied by the size of our system, the numbers become huge.

In the past, SDRS had reserves that could be tapped when assumptions were not met, but after several years of tough economic conditions, those reserves are gone. This makes our assumption more important. In the end, the investment returns, final average salary and the numerous items we give an “educated guess” to will either be higher or lower than what we assumed. If we are wrong in a good direction, such as investment returns at 8% rather than 7.5%, we will have more money to pay benefits. But if we are wrong the other way, we better have contingency plans in place to handle the shortfall.

Over the next year and possibly longer we will try to formalize these contingency plans. We also will be looking at each benefit to see if we have any benefits that would be considered “over generous” or “inequitable”. It is possible that there could be changes in the system to help build more of a comfort level or conservatism into the system. This process should be tracked by all SDRS members, and this is a good point to add our opinions about the direction the system should go. We can have a lot more influence at the early stages of the process than later, after other ideas have built momentum.

In the current political climate of our nation, pension systems such as SDRS are under attack. If we cannot make this system work within our current resources, the system will go away. SDRS is viewed as a model system on the national scene. We have shown that a pension system run wisely can work and provide a good value to its members and to taxpayers. We must continue to be proactive to maintain the system and to provide the best possible benefit to our members.

- Eric Stroeder, State Employee Representative, SDRS Board of Trustees

The Black Hills Knowledge Network seeks to engage

Passing it on

• There's a blood drive tomorrow (Thursday, Sept. 20) in Pierre.
• Walgreen's is up and running as a pharmacy provider for the state employee health plan.
• There's a fitness challenge for what should be a nice hybrid bike, some helmets, and a couple bike racks. (Note from Eric: Please try to take advantage of the opportunities you have as a state employee to improve your physical fitness. It helps the state to have fit, healthy employees, and it helps you to be fit and healthy as well. Everybody wins.)
• There's a section on what kind of medical provider you need, based upon your symptoms.
• There are a couple road-race plugs. More fitness!

The new website is here

Workers' Compensation Advisory Council okays combined trial lawyer proposal

• Last legislative session, HB 1054 was introduced. HB 1054 failed to pass committee during the last session. It was a State Bar Association bill. It had a few parts. The Bar said it was a "package deal," in that if all the parts weren't included in the legislation, the Bar didn't want the bill to continue (usually, when an outfit or person is the key behind a bill, the "understanding" is that the bill must not be modified, at least without that entity's support). One part was an increase in the notice an employee must give to an employer when injured on the job, from 3 days to 7 days. During the legislative session, in committee, a boatload of business people and business lobbyists testified against that portion of HB 1054. Lots of those same folks testified the same before the Council today. The Council later today decided to pass that part, 4-2. Another part would allow "out-of-state practitioner[s]" to be used in Workers' Compensation cases. The rationale the Bar used today was that there is a shortage of doctors in the state, doctors that can provide the kind of testimony that can be useful for insurers in claims filed against them by employees who claim their injury occurred due to work. One proponent indicated doctors were giving so much testimony that they were contradicting themselves in different court cases, leading to impeaching themselves as witnesses. (Has the impeaching of doctors as witnesses led to a shortage of South Dakota doctors willing to testify for workers' compensation insurers in certain cases? Or has it simply made the case that honesty is always the best policy, regardless of who's paying the bill?) I testified against the issue today, stating, among other things, that any "lack" of South Dakota doctors was not really backed with any facts, and that South Dakota Workers' Compensation should be kept in South Dakota. Another point I made is that this proposed change wasn't limited to geographic areas or medical specialties where a lack of doctors would make out-of-state doctors useful. Another person, from a South Dakota medical organization, also opposed the issue. It passed 4-2. So, expect to see a bill with those two things in it at the next legislative session. One difference this time will be that the bill actually has the Council's support this time. HB 1054 was introduced without the approval of the Council at the last session, a fact that probably guaranteed it wouldn't go anywhere. The bill will have the Council's support next go-round.

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