In Newfoundland and Labrador, about 40% of the 280 municipalities offer healthcare benefits to their employees, and only 20% offer any type of retirement or pension benefit. Terry Taylor knows this needs to change. He’s the general manager of the Newfoundland & Labrador Municipal Employee Benefits Inc., which is also known as Trio Benefits. “Within a period of five years, 50% of the municipalities will need to hire senior administrative personnel,” he says. As current employees near retirement age, municipalities must compete to attract younger skilled talent to these jobs. Trio sees benefits and pension plans as the key. But those serving on councils that run the municipalities don’t always agree.
According to Taylor, communities in Newfoundland and Labrador vary widely, so Trio supports municipalities by having a few options for pension plans. “We’re offering choice for people to tailor their benefits programs to their financial abilities,” he says. One option is the defined benefit plan, which has four options for calculating the retirement benefit. The other is a defined contribution plan, which will soon allow for contribution levels between 3% and 9%. “A range like this allows a municipality to offer levels of contribution for different levels of seniority,” he says. “Or, in more financially successful years, it can permit employees to top up.” This is a way to encourage municipalities without plans to find a plan design they are comfortable with and start there. “If you want a plan for employees, that doesn’t mean you need a Cadillac plan right away.”
Trio applies the same strategy to its benefits plan offerings. For larger municipalities or ones ready to have a larger plan, there is a comprehensive option. It includes long-term disability (LTD), life insurance, health coverage, dental and prescription drugs, and there is also an employee assistance program. There are two different options for how much employees are required to cover for dental and prescription drugs. Then, for smaller municipalities—say less than six employees—looking to stay competitive, there is the Small Town Plan, says Taylor.
It includes $50,000 in life insurance benefits, plus health and dental benefits. There is a 20% co-pay for prescription drugs. It does not include LTD. This plan costs about 60% less than the comprehensive plan, he says.
The biggest challenge for Trio in the coming years remains making elected officials aware of the value of having pension and benefits packages, says Taylor. “Town councils have to decide
how much money they are going to spend and if the value of providing benefits to employees is a justifiable
cost.” Taylor recognizes that a pension and benefits plan can actually save money for a municipality. For those that don’t offer a plan, they have to offer
a higher salary to remain competitive, which will run up costs for the municipality in the long term.
Municipalities in Newfoundland and Labrador will face an increasing need to hire new employees, given the aging population. But many in the younger generation have left the province for opportunities in other parts of Canada, particularly out west. Taylor strongly believes that offering benefits and a pension plan is one way to attract younger people back into the area. But it’s not as simple as that. The majority of town councillors serve without any pension or benefits plan, and often without compensation of any kind. This may make it more challenging for councils to recognize how crucial a total compensation package is when it comes to attracting talent. Taylor remains positive, however. “There’s going to be a snowball effect once municipalities see what a plan can do.”
Leigh Doyle is a freelance writer in Toronto.
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