October 2013 Spotlight

The Board of Governors met on Oct. 11-12 to discuss business important to state employees and retirees.

President’s Report President Sidney M. Sandy congratulated returning and new district chairpersons and welcomed them into the SEANC family. He also welcomed his committee chairpersons for the 2013-2014 to the BOG: Awards-Pam Hailey, BenevolenceRegenia Melvin, Bylaws-Jimmy Davis, EMPAC-Wayne Fish, Insurance Board of Trustees-Doranna Anderson, Member Discount-Janet Bunch, Membership-Bill Spade, Member Strength-Hiawatha Jones, Planning Committee-Linda Rouse Sutton, Policy Platform-Doris Greer, Youth Council-Kim Ross, Retiree Council-Spillman Grice. Sandy praised the District Chairperson training that preceded the meeting and urged all chairpersons to utilize the information contained in the notebooks to set their district up for success.

President Sandy also requested that district chairpersons work with their Regional Representatives when scheduling annual meetings to ensure that they are on different evenings to allow officers to participate in the meetings.

Executive Director’s Report Executive Director Dana Cope reported that he met with Governor Pat McCrory to discuss state employee morale and salaries and both agreed that state employees are underpaid. Cope requested that the governor consider funding employee compensation prior to other appropriations as is done in a traditional business.

SEANC is hosting State Health Plan Forums statewide to make folks aware of the cost-shifting associated with the Consumer-Driven Health Plan Option and the advantages and disadvantages of each option prior to making their health care choice this month.

Two SEANC BOG members were recently appointed to positions important to SEANC members. Cope congratulated District 65 Chairperson Gloria Evans on her appointment to the State Human Resources Commission by Gov. McCrory and Past 1

President Charles Johnson was appointed to the State Health Plan Board of Trustees

by Senate leader Phil Berger.

Ethics Training Chief of Staff/General Counsel/Ethics Liaison Tom Harris provided Ethics Training to the BOG and each member attested that they received the training.

SEANC Policy for SEANC Districts’ Use of Websites and Social Media SEANC’s Ethics Committee liaison Tom Harris brought forward a motion to the BOG’s district website policy passed last May that required all district websites to be dismantled and for districts to use the SEANC Bulletin Board in its place.

The proposal grandfathered two known district websites (3, 39) and any other district websites that met the following conditions: Websites that contain a disclaimer, terms of use policy and privacy policy approved by the SEANC Communications Department, continue to be active and have been updated during the three-month period prior to May 31, 2013, and continue to be updated at least once during each three-month period following that date.

Identifying Our Super SEANC Members Member Strength Director Kevin LeCount presented a proposal to create a SEANC rewards program and will come back to the BOG with cost proposal in February.

Demystifying the SPA-Know Your Rights!

SEANC’s State Human Resources Act (known as the SHRA and formerly the SPA) expert Tom Harris presented a Top 10 SHRA rights as a primer for new board members.

1. Just cause required for disciplinary dismissals, demotions and suspensions (property right) 2. Coverage and exemptions; probation 3. Job posting and priorities/preferences 4. Political activities permitted; protection from required support; limit on political hiring 5. Whistleblower protection 6. Grievance Rights 7. State Human Resources Commission must comply with the Administrative Procedures Act in adopting rules 8. Severance pay and discontinued service allowance 9. Privacy of personnel files; grievance right to remove inaccurate material 10. Protection for requested communication with General Assembly Member Other Lesser Rights Include: 1. Equal employment opportunity 2. Compensation plan 2

3. Minimum leave 4. Work options State Health Plan Forum SEANC Lobbyist Chuck Stone provided a briefing on the different options currently available in the State Health Plan open enrollment which ends on Oct. 31. Stone recommended that state employees and retirees purchase the best health plan that persons can afford. For active state employees the best plan available is the Enhanced PPO 80/20 Plan.

All state employees were automatically enrolled in the PPO 70/30 for 2014 and you must take action in October if you wish to enroll in the Enhanced PPO 80/20 or other options.

Stone cautioned members who are considering the Consumer-Driven Health Plan as their health option. The CDHP cost-shifts to members and may require prepayment for services necessitating member savings and/or available credit. Stone also informed members that Health Reimbursement Accounts, associated with the CDHP, are the legal property of the State Health Plan, not plan members and balances do not carry over from year to year.

State employees who wish to select the Enhanced PPO 80/20 can reduce the premium if you do three activities: attest that you do not smoke ($20 monthly credit), name a primary care physician ($15 monthly credit) and complete a health assessment online or on the telephone ($15 monthly credit) leaving employees with a $13.56 monthly premium for the best plan available to active members.

Medicare-eligible retirees All members were automatically enrolled in a Group Medicare Advantage Base Plan offered by either Humana or UnitedHealthcare. Stone urged all members to:  

Make a list of your health care providers to determine if they are in-network for the Medicare Advantage Plan where you were automatically enrolled in during August.

Make a list of your medications (name, dosage level, frequency, generic or brand) and compare it to the drug formulary for you Medicare Advantage Plan provider and the competitor.

Then make your decision on which Medicare Advantage Plan or the PPO 70/30 best meets your need.

For more information, please ask SEANC members to attend an upcoming SEANC State Health Plan Forum.

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Special Guest-Richard Warr, Ph.D. Professor of Finance North Carolina State University Professor and Finance Department Chairman at the Poole School of Management made a presentation on alternative investments in state retirement systems as background for new board members on Senate Bill 558, which SEANC opposed in this session of the General Assembly due to the risk involved for state employees and retirees. State Treasurer Janet Cowell had asked the General Assembly to expand her authority to invest 40 percent of the state employees’ $81 billion retirement fund in alternatives. Due to SEANC’s strong opposition, only a 1 percent increase from 34 to 35 percent was approved and signed into law by Gov. McCrory.

Warr explained alternative assets include:  Private equity-Direct investments in private companies=high fees, high risk.

Professor Warr likened private equity to buying a run-down house, fixing it up and trying to flip it.  Venture capital-Direct investment in young growing companies=high fees, very high risk  Hedge Funds-A fund that takes investor’s money and has full discretion on how to invest the money or basically a mutual fund for rich people. Hedge funds have very high fees and are popular with Wall Street due to the fee structure.

Prior to the passage of Senate Bill 558 the state paid investment fees of $384 million.

The 1 one percent increase could mean a total of $545 million in fees for Wall Street.

That is why Warr explained, “Wall Street celebrated this bill, it was payday for Wall Street.”

Professor Warr argued that a traditional portfolio of indexed stocks and bonds will outperform most alternative portfolios in the long run because of the fees. If the state did nothing but a 50/50 split between stocks and bonds, the savings in fees would be more than $290-$450 million per year that could stay in the state retirement system and be used for benefit enhancements.

Warr believed that if the Treasurer’s position was appointed, rather than elected, persons would see less of a push to alternatives. Although the fund managers are barred from making political contributions to candidates, their law firms that are big campaign contributors are not. Warr also argued against the sole fiduciary system which allows one person to make all of the investment decisions in an $81 billion plan.

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Committee Plans of Action Awards Chairwoman Pam Hailey suggested that SEANC move to website award submissions, discontinue scrapbook submissions and combine district of the year awards to one award.

Benevolence Chairwoman Regenia Melvin asked district chairpersons to appoint a District Benevolence Chairperson so that they can complete the SEANC remembrance form and upload photos to be included in the SEANC Annual Convention Memorial program at convention.

Bylaws Chairman Jimmy Davis noted it’s never too early to start thinking about bylaws amendments. Please bring them to the committee for review.

EMPAC Chairman Wayne Fish reported that the BOG was at 100 percent participation in the PAC, that the committee will be conducting EMPAC interviews. Fish reported that EMPAC endorsements will be based on the present votes of legislators, not their past support. People were also urged to donate to SEIU’s PAC called the Committee on Political Education.

Insurance Board of Trustees Chairwoman Doranna Anderson reported that all members received a mailing detailing all of the insurance plans. Members can take advantage of the insurance plans and pay for their membership dues by doing so due to SEANC’s reduced rates.

Also vision plan rates are going down.

Membership Chairman Bill Spade suggested that all district chairpersons carry a membership application with them at all time and always ask a state employee/retiree to become a member.

Member Discount Chairwoman Janet Bunch reported that the committees’ goal is to increase awareness of the member discount program, expand geographical participation and enhance the existing discount amounts for those businesses that are offering 5% discounts.

Member Strength Chairwoman Hiawatha Jones reported that the committee is charged with empowering and increasing SEANC members’ engagement at worksites, in political involvement and grassroots organizing. The committee is going to reach out to 5

retired members, “card-holder” members and others. Educate, engage and power will be the theme of the committee.

Planning Committee Chairwoman Linda Rouse Sutton announced she intends to draft a five-year SEANC plan in addition to planning the annual SEANC budget.

Policy Platform Chairwoman Doris Greer reported that last year only two districts submitted six policy platform objectives for consideration. This year Greer encouraged more participation and set a goal of 10-12 minimum new objectives.

Retiree Council Chairman Spillman Grice announced that the council will continue with retiree forums which have been very successful with record numbers of attendees. The council plans to partner with the Membership Committee to jointly conduct membership drives, continue their efforts to extend Bailey settlement benefits to all state employees Youth Council Chairwoman Kimberly Ross would like to recruit new SEANC members, host fundraising activities and be visible at the legislature on Monday nights when the General Assembly is in session.

Scholarship Foundation Board Report Chairman George Thiessen reported 7, 11, 40, 42, 56, 59 and 61 exceeded their membership in the amount of scholarship raffle tickets that they sold. Congrats to Districts 1, 2, 3, 5, 6, 10, 18, 21, 22, 24, 25, 26, 27, 37, 41, 44, 46, 47, 57, 64, 67, 68 and 69, who sold 100 percent of their scholarship raffle tickets.

Votes: PASSED-A motion to amend SEANC’s website and social media policy to grandfather in websites that contain a disclaimer, terms of use policy and privacy policy approved by the SEANC Communications Department, continue to be active and have been updated during the three-month period prior to May 31, 2013, and continue to be updated at least once during each three-month period following that date.

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