Smith County reports $17 million in savings due to post-employment benefit policy changes

Published on Wednesday, 19 February 2014 10:58 - Written by

On Tuesday, Smith County Commissioners reported that changes to the Smith County policy for other postemployment benefits in 2005 and 2012 netted more than $17 million in actuarial savings. 

Many state and local governmental employers provide the benefit as part of the total compensation in addition to pensions offered to attract and retain the services of qualified employees.  Benefits include postemployment healthcare and life insurance, when provided separately from a pension plan.

“We had situations where an employee may have worked 18 years in another county before transferring to Smith County for two years and then retiring,” Judge Joel Baker said. “Upon their retirement, the employee collected postemployment healthcare benefits from Smith County for the rest of his or her life.”

In 2005 the court voted to make the County’s Retiree Health Benefit Plan a closed program for any new hires. In 2012 commissioners adopted a policy change that placed an additional requirement of 20 years of service to Smith County before employees were eligible for other postemployment benefits. 

Baker said the change ensured that employees with long-term service to Smith County received the benefit.

The $17 million represents actuarial liability Smith County would have been responsible for had there not been a change to the policy.