Engaging Your Workforce: The Importance of Employee Engagement and Benefits

1. Opening Session Benefits at Work 2019

2. Engaging our workforce

3. Why engagement is important • Crucial in motivating employees to deliver their best for your organization. • Understanding who they are can lead to a healthy, successful and productive work culture. • Builds strong relationships. • Provides an essential morale booster. • Avoids a stressful environment.

4. Know your employees • Identify and understand the different ages, life stages, career points, and responsibilities across your workforce. • Recognize that each employee is unique. • Different background, experience and socioeconomic status. • Pinpoint strengths, weaknesses and obstacles. • As an organization, and as individuals. • Don’t assume employees know and understand their benefits.

5. Engagement tips • Emphasize importance and value of benefits. • Encourage employees to have ownership in their election decisions. • Encourage employees to routinely review their benefit information, and make updates when applicable. • Provide resources, support and time for preparation and decision-making. • Utilize resources provided by PEBA.

6. What can you do?

7. Engage • Schedule a preventive screening. • Use the after your screening website. • Host a health and wellness workshop. • Use PEBA’s Field Services team: • Seminars: • Get Set for Retirement – Insurance and Retirement. • Retirement Starts Now (mid-career). • Benefits fairs. • You can request flyers based on your employee’s needs (health report) or interests. • New request form. • Set the stage.

8. Request form

9. Resources • PEBA TV. • Turnkey toolkits on Health Hub: www.PEBAHealthHub.com. • Employer group health report: • Identify wellness benefits to promote to your employees. • Employer checklists. • Be Aware and Prepare: • New retirement awareness resources coming soon.

10. State Health Plan benchmarks

11. State Health Plan versus national trendsClaims expenditure growth • Target is to maintain expenditure growth at least two points below benchmark. 1Includes active participants and retirees under the age of 65 in private and public sector insurance plans. 2Trend is defined as claims paid per member (includes employee and dependents). 3Incurred in 6 months; paid in 6 months. Data from the most recent Segal Health Plan Cost Trend Survey

12. 2018 Average monthly total premiums1 1Average monthly total premiums in PPO (Preferred Provider Organization) plans. 2Large public and private sector employers: ≥ 200 employees in public and private sectors. 3Public and private sector employers in South includes Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia. Data from the Kaiser Family Foundation Employer Health Benefits 2018 Annual Survey

13. 2018 Average annual deductible1 1Average annual deductible in PPO (Preferred Provider Organization) plans. 2Large public and private sector employers: ≥ 200 employees in public and private sectors. Data from the Kaiser Family Foundation Employer Health Benefits 2018 Annual Survey

14. Historical State Health Plan increases and funding

15. Past pension reform

16. Past pension reform • Benefit reform was done in 2012. • Funding reform was done in 2017.

17. Act 278 of 2012 • Created Class Three tier of membership in SCRS and PORS for newly hired employees with membership dates on or after July 1, 2012. • Increased service requirements for retirement with full benefits. • Rule of 90 for SCRS; 27 years of service for PORS. • Age-based retirement requirements were unchanged. • Increased vesting period from five years to eight years. • Changed average final compensation calculations from 12 quarters of highest earnable compensation to 20 quarters. • Removed credit for unused annual and sick leave at retirement from benefit calculations.

18. Act 278 of 2012 • Changes affecting Class Two and Three members: • Closed TERI program effective June 30, 2018. • Changed cost of service purchase to be actuarially neutral. • Excluded pay for non-mandatory overtime from SCRS earnable compensation. • Changed eligibility for SCRS disability retirement. • Eliminated interest on inactive accounts.

19. Act 278 of 2012 • Changes affecting retirees: • Limited annual benefit adjustment, formerly referred to as a COLA, to 1 percent up to a maximum of $500 annually. • Added $10,000 earnings limit for members who retired after January 1, 2013, and return to work for a covered employer, unless the member was older than age 62 (SCRS) or age 57 (PORS) at retirement. • Other exceptions to the earnings limitation include compensation from certain elected and appointed offices and for certain critical needs positions in public schools. • Closed GARS to newly elected officials at or after the general election of 2012; new members may join SCRS or State ORP.

20. Retirement System Funding and Administration Act of 2017 • Legislation did not change the benefits provided to members of the Retirement Systems. • Goal of the legislation was to pay down the unfunded liability faster by: • Reducing the funding period; • Increasing contribution rates; and • Decreasing the negative amortization.

21. Retirement System Funding and Administration Act of 2017 • Decreased the assumed rate of return from 7.5 percent to 7.25 percent effective July 1, 2017. • Rate will remain in effect through July 1, 2021, at which time a new rate will be set by the General Assembly. • PEBA provides a proposed rate based upon a recommendation from the systems actuary and in consultation with Retirement System Investment Commission (RSIC).

22. Retirement System Funding and Administration Act of 2017 • Changed employee and employer contribution rates effective July 1, 2017. • SCRS employee rate was increased to and capped at 9 percent. • PORS employee rate was increased to and capped at 9.75 percent. • Employer rates for SCRS and PORS increased by 2 percent. A schedule of rates includes additional 1 percent increases annually through July 1, 2022. • The General Assembly provided funding in fiscal years 2018, 2019 and 2020 for credits towards employer contributions for most employers participating in SCRS and PORS.

23. Contribution schedulesSet by Retirement System Funding and Administration Act of 2017 Rates include incidental death benefit and Accidental Death Program contributions when applicable.

24. Contributions effective July 1, 2019

25. Retirement System Funding and Administration Act of 2017 • Gradually reduced the maximum funding period from 30 years to 20 years by July 1, 2027. • Schedule reflects a one year reduction in the funding period for each of the next 10 years, but also allows for future unforeseen investment losses. • The legislation took several important steps to increase funding to the Retirement Systems, which improves the financial condition of the plans more quickly and incorporates a cushion for possible future adverse investment experience.

26. Current retirement Systems funding

27. Effects of 2017 legislation on SCRS While the Unfunded Actuarial Accrued Liability (UAAL) has continued to rise, the additional contributions required by the 2017 legislation have reduced the funding period.

28. Test comparing multiple outcomes over different time horizons Based on Scenario 5.b with various emerging investment experience. Slide content from GRS, the actuary for the Retirement Systems.

29. Open enrollment communications

30. 2019 Open enrollment

31. How to promote open enrollment • Employer resources web page for open enrollment: www.PEBA.sc.gov/oeresources.html. • Toolkit available: • Posters. • E-blasts, articles. • Digital banners. • Suggestions on how to use the toolkit.

32. The Insurance Summary is even better! • You asked; we listened. • Callouts for what changes can be made during open enrollment. • Separate open enrollment worksheet.

33. Required communications for active employees • Insurance Summary. • Federally mandated notices. • You will receive a delivery of each publication by Friday, September 13, 2019. • Must distribute both publications to active, insurance-eligible employees before October 1, 2019.

34. Other communications • PEBA will mail the Benefits Advantage to retirees, COBRA subscribers, survivors and former spouses. • PEBA will mail the Insurance Benefits Guide (IBG) to retirees, COBRA subscribers, survivors and former spouses for whom it does not have an email address on file. • A limited quantity of IBGs will be available after October 15, 2019, on a first-come, first-served basis. • The IBG is available online.

35. Today’s agenda

36. Concurrent sessions • Insurance I: • Plan updates for 2020. • Insurance II: • Using the new enrollment feature in EBS and MyBenefits. • Tips for the 2019 open enrollment. • Retirement: • Tips for clearing errors in EES. • State ORP and Deferred Comp updates. • Closing Session: • Conference wrap-up. • Door prizes!

37. Optional wellness activities • Take a stroll through Columbia’s Vista during your lunch break. • Walking maps available at registration table. • Meditation and deep relaxation: • 12-12:30 p.m. • Columbia Ballroom A/B. • Line dancing: • 12:30-1 p.m. • Columbia Ballroom A/B.