"We are one of the few remaining governmental entities both within the state and across the nation that offer this level of supplemental health benefit to retirees," Horrigan's chief of staff
There are 2,406 retirees covered by the city now, with the health care extended to an additional 1,648 dependents.
City leaders estimate that the changes would save
The council, which was briefed Monday afternoon, plans to take its time studying the proposal. Members will get together at
The legislation calls for retirees to pay
It also would mirror the plan offered to current workers and require spouses who are eligible for health care elsewhere to take it, in most cases, or pay a surcharge.
As part of the effort, the city would do an eligibility audit.
New employees hired after
The plan is still generous and competitive for retirees, the administration said.
Several city union representatives attended the council presentation. They were briefed on the proposal earlier in the day by the mayor.
The union leaders declined to comment until they discussed the issue with their members.
Horrigan said the proposal doesn't need approval by the unions. But union leaders said their contracts protect benefits for retirees.
The supplemental health benefit was designed to serve as a backup to
Private companies and the public sector have been cutting back on retiree benefits for decades as they try to reel in costs.
"That has led to employers increasing contributions, reductions in benefits and in some cases employers are terminating benefits, but when they do, they tend to start with new hires," said
A Kaiser survey last year found that only 23 percent of firms that offer benefits to active employees and have more than 200 workers extended benefits to retirees.
The figure was 73 percent for state and local governments.
A new Kaiser benefits survey is expected to be released this week.
Hardy said few public sector retiree plans are as generous as Akron's, with its lack of a contribution and extended coverage for dependents.
Horrigan expects complaints from retirees.
"Is it probably going to upset some people? Of course it is," the mayor said. "I absolutely know it is. I know we'll get flooded by calls."
But he and others said the city cannot continue offering it. The mayor has been trying to reduce expenses and grow revenue since he took office this year.
A blue ribbon task force set up by the mayor had recommended that the city look at those long-term benefits, also called "legacy costs."
"The fact of the matter is we cannot sustain this," she said.
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