HomeMy WebLinkAboutHR 01-04P!CKERING
REPORT TO
EXECUTIVE COMMITTEE
Report Number: HR 01-04
Date: May 3!, 2004
Gillis Paterson
Director, Corporate Services & Treasurer
Baba Gajadharsingh
Division Head, Human Resources
Subject:
Benefits Consulting Services - Mosey & Mosey Benefits
Consultants
Recommendation:
That Report HR 01-04 be received by Council and that the revised fee structure
proposed by Mosey & Mosey Benefits Consultants be approved.
Executive Summary:
The City of Pickering has been utilizing the services of Mosey & Mosey Benefits
Consultants since January 1, 2000. Since that time, Mosey & Mosey .was paid for its
services based on the compensation arrangement identified in their original proposal.
Mosey & Mosey has now requested a change to this arrangement which will result in an
increase in its hourly rate from $125 to $150 as well as an increase to the annual fee
cap from $18,000 to $25,000.
Financial implications:
ESTIMATED COST:
$7,000 annually (difference between the $18,000 and $25,000 annual fee cap) which
can be accommodated in the 2004 Current Budget.
Note: The increase in the hourly rate from $125 to $150 would result in the City
reaching its annual fee cap at ~ faster rate.~ The- City would be. paying for ar.~ additional
23 hours of service from Mosey & Moseyl however~ if in any giver~ year the fee cap i~
Report HR 0i-04
Subject: Benefits Consulting Services - IViosey &
Mosey Benefits Consultants
Date:
May 3i, 2004
Page 2
Background:
The City of Pickering's benefits are provided by Manulife Insurance for Extended
Health, Dental, Vision, and Travel coverage as well as for Life Insurance and Long
Term Disability. Unum Life Assurance Company provides Accident Insurance. To
ensure that the City's benefits plans remain competitive and continue to satisfy the
needs of our employees, a benefits consulting firm is required to monitor the plans,
make suggestions on plan improvements, negotiate premiums and provide ongoing
support required by the Corporation.
Mosey & Mosey Benefits Consultants has been the City of Pickering's benefits
consultant since January 1, 2000 when it was appointed by Council through the
Request for Proposal (RFP) process (the City had previously utilized the services of
William M. Mercer Benefits Consulting). At that time, Mosey & Mosey quoted the
lowest hourly rate ($125 per hour) with a guarantee that annual fees will not exceed
$18,000. Mosey & Mosey's original proposal emphasized the firm's willingness to
explore new avenues of cost containment utilizing its database to ensure market
consistency.
Mosey & Mosey has successfully negotiated benefits plan renewals with our insurance
carriers over the past four years, and has identified the following amounts as savings
achieved for the City of Pickering through the negotiation process:
YEAR
APROXIMATE
SAVINGS NEGOTIATED
2001 $25,152
2OO2 $24,O36
2003 $32,093
2OO4 $36,0OO
TOTAL $117,281
in addition, Mosey & Mosey has provided support during the collective bargaining
process, responding to our requests for detailed costings of benefits modifications in
an expeditious manner. The company has been effective in negotiating premium
adjustments and in ensuring that the Policy provisions reflect the needs of the
organization.
Since January t, 2000 the City has reimbursed Mosey & Mosey for its seA, ices on the
basis of 8 percentage of benefits premiums in accordance with the amounts quoted in
its origina! Request for Proposa! submissior~-. The cap of $18,000 annually hss saved
the City approximately $8,718..75 over the past 4 ~/ears as documented below:
C O R P0227 -07,~;i
Report. HR 01-04
Subject: Benefits Consulting Services - Mosey &
Mosey Benefits Consultants
Date:
May 31,2004
Page 3
~ ~'A~:, COST OF AMOUNT BILLr'D
SERVICE (FEE CAP)
AMOUNT SAVED
BY FEE CAP
2000 $15,581.88 $18,000 ~400sur~usca~ed~O~ N/A
2001 $21,031.25 $18,000 $3,031.25
2002 $22,437.50 $18,000 $4,437.50
2003 $19,250.00 $18,000 $1,250.00
TOTAL SAVINGS
$8,718.75
On March 23, 2004, Mosey & Mosey submitted a letter (copy attached) to the City
stating that the compensation rate of 3% of benefits premiums to a maximum of
$18,000 annually (charged at an hourly rate of $125)was no longer competitive. Given
the fact that over the years the City's premium rates have increased, a payment of 2%
of premiums annually would equal approximately $25,000. Mosey & Mosey proposed
that this $25,000 be the new annual cap with the hourly rate increased to $150.
Mosey & Mosey is now waiting for the City's approval before implementing this change.
Attachments:
1. Letter from Mosey & Mosey dated March 23, 2004
Prepared~y~
/fe~ Parent-
~nager, Human Resources Services
Approved / Endorsed By:
Gillis Paterson
Director, Corporate Services & Treasurer
Copy: Chief Administrative Officer
I Recommended for the consideration of
I Pickering City Council
t Thomas ~ Q~nr,,. Chle~ Admm~strat4,ve Officer
Baba Gajadlf~¢si~'h
Division Head, Human Resources
CORP022'; -07/0', " ....
Attachment 1
March 23~ 2004
G. Patterson
Human Resources Department
City of Picketing
Picketing Civic Complex
One The Esplanade
Picketing, ON
L1V 6K7
Dear Gil:
Re: Monthly Accounting and Consulting Compensation
Enclosed are the monthly accounting for January and February 2004. I apologize for the oversight in not getting
these to you earlier, but I thoughtthey were provided on a quarterly basis.
As discussed at our recent renewal meeting, Mosey&Mosey were appointed consultants to the City in 2000. At
that time the compensation was set at 3% of the experience rated benefits to a maximum of $18,000 charged at
a combined hourly rate of $125.00. This was accounted for and monitored monthly to the City, with an annual
reconciliation. Overthe past few years the $18,000 is no longer representative of the 3%, due to the increases
in premiums over the past few years. The compensation rate of 3% was competitive back in 2000. A
competitive commission rate today would be in the area of 2% of the experience rated benefits for a group the
size of the City. This would represent a cap of approximately $25,000, based on the experience rated renewal
premium at January 1, 2004. In addition the houdy rate originally quoted, has also become dated, and we
would like to increase this to a combined revised houdy rate of $150,00. We wil~ continue to provide you with
regular reconciliations on a monthly basis, but would propose the pedod be changed to co-inside with the
renewal pedod of Apdi 01 to March 31. The cun'ent year would cover a 15 month pedod of January 01,2004 to
A/larch 31, 2005 during the changeover, The proposed revised schedule would only be reflected effective Apdl
01,2004.
?ie._.se oo no: nesP~ai:e to contsci: me:- snouiC you n~ve: sm~ {me,ions o~ ~on~m~. with this proposed change to
Sincerely,
Dawn Hoskins
Vice President Marketing & Sales
c.c.J. Parent, City of Pickering