The North Shore Fire Department board of directors unanimously approved labor contracts with its union and nonunion employees Tuesday morning.
Union contracts have a four-year duration and last through 2016; nonunion contracts are effective for one year.
According to the contract settlement summary provided by Fire Chief Robert Whitaker, union employees will receive a 2.25 percent pay bump in 2013 and 2014. In 2015 and 2016, union employees will get a 2.25 percent raise at the beginning of the year and an additional .25 percent in July. Nonunion employees are seeing a similar 2.25 percent raise in 2013, Whitaker said.
The contract includes an increase in total contribution to the Wisconsin Retirement System, from 23.8 percent of salary to 25.6 percent, which applies to all pay, including overtime and holiday.
"We're looking at almost a two percent increase to the benefit package," NSFD Finance Director Lynn Burton said.
Kicking in for pensions
However, some administrative staff and the majority of the department - the "protective" category in WRS parlance - will, for the first time, be required to pay part of that contribution. Some administrative employees, as well as others in the department - the "general" category - have been paying into WRS themselves since the passage of Act 10 in 2011.
"(The contract settlement) is amicable," said Local 1440 President Steve Tippel, adding of the WRS contributions that "we understand the public's expectations."
In 2013 the protective employees will pay half the contribution of the general employees, and their contribution will increase to match in 2014. The overall increase in WRS contribution, according to a September 2012 Wisconsin Department of Employee Trust Funds newsletter, is due to "investment performance, legislative adjustments to benefit levels, demographics, etc."
The newsletter says the investment losses resulting from the 2008 stock market crash will affect WRS contribution rates through 2014, since investments are smoothed over a five-year period "to prevent large swings."
Health care plan changes
Due to a switch from United Healthcare to WEA Trust, NSFD will reduce health care costs by nearly 14 percent in 2013 and divert the savings toward a retirement benefits fund. According to the contract settlement, employees will pay 5 percent of premiums through 2016. Act 10 allows bargaining over premium contributions, but not plan design, said Whitaker, which is where NSFD saved its money.
"We were to achieve more savings in plan modifications than premium contributions," he said.
Under the new WEA Trust plan, employee deductibles increase from $500 and $1,000 effectively to $1,500 and $3,000 for single and family plans, respectively. NSFD eliminated deductible reimbursements which paid for the difference under the old plan. Out of pocket costs for employees increased as well, and NSFD reduced the amount of premium costs it will cover for retirees through Medicare by 15 percent.
Whitaker added that compared to similar fire departments NSFD is in the upper range when it comes to deductibles and out of pocket costs, and as a result, "we shouldn't be highest in premiums, too."
Nonunion employees are subject to the same salary, pension, and health insurance changes in 2013.