Employee Benefits

Philadelphia's municipal employees' unions won big last week in their arbitration with the city over the cost of health benefits. But like the Iraqi victory over Kuwait, this is one rout the winners may live to regret. At a time when the city can balance its budget only with borrowed millions, and when all the old ways of doing business are under assault, the unions' claim on an additional $45 million over the next two years highlights just how out of whack the city's compensation system has become.

Cigna Corp. is shedding its old dependence on the vagaries of storm, fire and flood, and embracing the surer bets of illness and retirement. Last week, the Philadelphia insurer posted its third straight year of record profits, earning $1.3 billion on $21 billion in revenues. But it was how Cigna earned its money, not how much, that highlights its evolution from a global insurance supermarket into a corporate health- and retirement-benefits giant. During the last three months of 1998, Cigna netted three-quarters of its profits, or $185 million, from its employee life, health-care and disability-benefits business, the company said last week.

The average Philadelphia residential water bill will be about $5.50 higher in July as the third Water Department rate increase in as many years takes effect. Customers will see a 5.7 percent hike in the cost of their water, averaging about $3.20 per household. The July bill will also add a one-time, three-month advance service charge of about $2.30. The water bill will feature another change. The monthly statement will "break out" a storm-water charge from the service charge. According to a department spokesman, the storm-water charge has always been included but is now getting its own line.

Gerald E. "Bud" Faller, 80, a longtime employee benefits and pensions specialist in the Philadelphia area, died of heart failure on Sept. 20 at his home in Hillsboro Beach, Fla. Mr. Faller had a long career in employee benefits and pension business, retiring in 2007. He joined First Investment Annuity Co. in Philadelphia in 1968, as vice president for sales. He later managed the sales offices of Great West Life & Annuity Co in Philadelphia and New Jersey. He also operated businesses of his own in Philadelphia, New York, and New Jersey.

Dramatic increases in the costs of employee benefits, fuel oil, and water and sewer service will have to be factored into the Central Bucks School District's 1991-1992 budget, administrators told the school board at its meeting Tuesday night. In the next to last in a series of presentations on the budget for the fiscal year starting July 1, John A. Fraser, the district personnel director, said the board probably would have to spend an additional 17 percent for employee benefits.

If you're gay or lesbian and have a job that allows your same-sex domestic partner to use your employee benefits, you can count yourself among the fortunate few. Many companies in Philadelphia and government agencies do not extend their benefits that far, a random survey shows. Temple University "does not currently offer employee benefits for domestic partners," said Temple spokesman George Ingram. A committee is reviewing it. Temple's response was typical of eight major Philadelphia employers contacted yesterday.

Impending state budget cuts and increased spending obligations have the Haverford Township school board expecting the worst possible scenario for next year's budget. The board last week projected a possible $4 million deficit when discussing district expenditures for the 1991-92 budget. Richard Greenstein, head of the board's finance committee, said at a Feb. 19 conference meeting that Haverford would feel the brunt of state cutbacks in three areas: the state's basic subsidy to the township; the state's reimbursement to the district for employee benefits, and special-education programs.

The way things size up now, the Neshaminy school board expects to spend about 7 percent more next year, mostly to meet higher salaries and benefit costs, officials say. The school board on Tuesday discussed its 1991-92 preliminary budget of $76.3 million, up 6.9 percent from this year's $71.4 million. But administrators stressed that the numbers were subject to change. The effect on taxes is not yet known; no revenue figures were supplied. More than 80 percent of the budget applies to salaries and employee benefits.

The Johnson Cos., the Newtown benefits consulting firm that invented the 401(k) savings plan, has been sold to a British company for an undisclosed price, officials said yesterday. The buyer was Noble Lowndes, one of the United Kingdom's leading employee benefits and actuarial services firms. The sale will not affect Johnson's 320 employees, officials said. However, the firm's name will be changed to Noble Lowndes Johnson. The sale did not include Johnson, Kendall & Johnson - the property and casualty-brokerage division of the Johnson Cos. - which will continue to operate as a separate company.

Question 1 Do you approve an amendment to the New Jersey Constitution, as agreed to by the Legislature, to allow contributions set by law to be taken from the salaries of Supreme Court Justices and Superior Court Judges for their employee benefits? (93% of the vote) Yes . . . 1,274,618 No . . . 774,121 Question 2 Do you approve the "Building Our Future Bond Act"? This bond act authorizes the State to issue bonds in the aggregate principal amount of $750 million to provide matching grants to New Jersey's colleges and universities.

CITY Council chambers can seat 350, so we're assuming that's the number of union members who filled the chambers with shouting and whistling loud enough to have Council President Darrell Clarke recess the session about 10 minutes into Mayor Nutter's budget address. The mayor had begun yelling his speech over the din, but finally finished delivering it in the mayor's reception room. So, here's the math: It took only 350 people to put a halt to city government Thursday. As union leaders declare victory in shutting down a budget address, we can't help wondering: Victory over what, really?

Question 1 Do you approve an amendment to the New Jersey Constitution, as agreed to by the Legislature, to allow contributions set by law to be taken from the salaries of Supreme Court Justices and Superior Court Judges for their employee benefits? (93% of the vote) Yes . . . 1,274,618 No . . . 774,121 Question 2 Do you approve the "Building Our Future Bond Act"? This bond act authorizes the State to issue bonds in the aggregate principal amount of $750 million to provide matching grants to New Jersey's colleges and universities.

The Greyhound Lines Inc. employee on her way home from work Monday said she's the kind of worker who prides herself on always being on the job. So she's not happy that Greyhound is docking her for Oct. 29 and 30 - the two days that the entire region was shut down due to Hurricane Sandy. "I'm totally upset," she said. "I think it's horrible. They were closed anyway. " Because the employee would like to keep her job, she doesn't want her name published, but she acknowledged that companies are in a tough spot, too. After all, they couldn't make any money when they were closed.

New Jersey voters have two ballot questions to consider, one would give a boost to higher education, and the other would require judges to pay more for employee benefits. Voters should say YES to a $750 million bond issue for the state's public and private universities. The state hasn't approved a bond issue for higher education in nearly a quarter-century. Meanwhile, state funding for colleges has been slashed. The bond money would be used to expand classroom and lab space. Community colleges as well as state universities and private colleges would benefit.

Gerald E. "Bud" Faller, 80, a longtime employee benefits and pensions specialist in the Philadelphia area, died of heart failure on Sept. 20 at his home in Hillsboro Beach, Fla. Mr. Faller had a long career in employee benefits and pension business, retiring in 2007. He joined First Investment Annuity Co. in Philadelphia in 1968, as vice president for sales. He later managed the sales offices of Great West Life & Annuity Co in Philadelphia and New Jersey. He also operated businesses of his own in Philadelphia, New York, and New Jersey.

Susan Hoffman is a cochair of the employee benefits litigation practice group at Littler Mendelson P.C. Was the traditional pension plan killed by greedy corporate executives? No, it was killed by laws, accounting rules, and a changing workforce. Before the Employee Retirement Income Security Act (ERISA) was passed in 1974, many companies sponsored pension plans, but only for those who could work long enough to earn them. My truck driver father had no pension because he had a heart attack at age 50 - before his eligibility date.

Several of the nation's largest health insurers drew attention last week by saying they would maintain certain popular consumer provisions in the 2010 health reform law even if the Supreme Court strikes down the statute in a ruling expected this month. Humana Inc., Aetna Inc., and UnitedHealth Group Inc. said they would continue offering preventive health services, such as immunizations with no direct out-of-pocket costs for consumers, allow children to stay on their parents' plans until they turn 26, and keep the third-party appeals process for denials of coverage mandated by the 2010 Patient Protection and Affordable Care Act. But a local employee benefits expert said the insurers' announcements were probably not as significant as they first appeared to be. "I think it was really just a PR move," said Joseph McGinty, vice president of employee benefits consulting at the Graham Co., a Philadelphia employee benefits and insurance firm.

It was just a routine grocery trip for Nancy Haas of Marlton, but as she left the Mount Laurel Wegmans, a stiff wind prompted a quickened pace to her car - where a man stepped forward, a bouquet of flowers in his hand. Haas was startled. And a bit wary. This is, after all, 2012, when danger lurks even in suburban parking lots, and strangers bearing flowers can be, well, creepy. But David Friedman calmly explained that he wanted only to brighten her day - and that he would be happy if she could accept the flowers.

Robert Gordon Chambers, 62, formerly of Bryn Mawr, a lawyer and employee-benefits expert, died of melanoma Tuesday, Oct. 18, at the Levine and Dickson Hospice House in Huntersville, N.C. Mr. Chambers had been with the law firm of Montgomery, McCracken, Walker & Rhoads in Philadelphia for more than 20 years, and then was a partner with Duane Morris in Philadelphia for five years. In 2004, he joined the law firm of McGuire Woods in Charlotte, N.C. In his law practice, he counseled employers, trade associations, and corporate executives regarding tax-qualified retirement plans, and negotiated the employee-benefits aspects of business transactions.

PHILLY IS ON track to star in a real-life disaster movie. But not the kind where residents fall victim to an incurable disease, evil aliens or savage apes. Call it: "Attack of the Underfunded Pension Plan. " Not scary? Consider this: The pension plan for city workers has less than 50 percent of the money it needs to pay projected benefits. Because the city is obligated to keep the fund going, there could be less cash in the coming years for cops, firefighters and libraries.