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PERSONNEL COMPENSATION ADMINISTRATION COMMITTEE 2007/11/05 AgendaTHE CITY OF LAKE FOREST PCA COMMITTEE MEETING AGENDA Monday, November 5, 2007 5:00 p.m. Lake Forest City Hall I. ROLL CALL AND CALL TO ORDER II. APPROVAL OF EXECUTIVE SESSION MINUTES a. March 29, 2007 b. April 14, 2007 c. June 18, 2007 III. DISCUSSION OF IRS MANDATED PLAN CHANGES FOR RETIREE HEALTH SAVINGS PLAN (RHS) The RHS plan is structured as a Health Reimbursement Arrangement, which allows for employer contributions to an account for use by employees and retirees for medical expenses, including qualified expenses and premiums to health care coverage. Contributions and distributions are free from taxes. The City participates in the ICMA-RC RHS plan and for most employees, allowed voluntary participation since 2004. The City first adopted the RHS plan in 2001 under a mandatory contribution formula where employees contributed I % of pay. Effective in 2008, only mandatory, uniform contributions once again will be allowed. Over the course of 2007, the Benefit Committee met to discuss options to the RHS plan and assisted in a communication and feedback campaign to determine a recommendation for your consideration. Employee feedback supports, and we are recommending, continuation of the Plan under a mandatory contribution formula. Employees would contribute 1 % of pay. Collectively bargained groups could adopt a different formula. In addition, the Committee recommends adoption of a provision allowing for benefit payments at age 55, rather than retirement. Employees separating from service would continue to have access to the account as under current provisions. More detailed information is attached. IV. PROPOSED 2008 HEALTH/DENTAL INSURANCE RATE INCREASES The City's benefit consultant Peter Wright is recommending modest increases in our health and dental insurance plans: 4% for Traditional Plan; 2% for Employee Choice Plan; and, 2% for Dental. NIPERG, a cooperative in which we participated to purchase excess liability insurance, will be dissolved as of January 1, 2008, due to the withdrawal of two of the three members. We have received quotes based on our own loss experience. Peter Wright will be in attendance to go over the information received and his recommendations. III. ADJOURNMENT