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HomeMy WebLinkAboutTR-55-93 THE CORPORATION OF THE TOWN OF NEWCASTLE REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File# Date: June 21, 1993 Res. ffw_tl�% TR-55-93 By-Law# Report#: File#: PROPOSAL CALL: EMPLOYEE BENEFIT CONSULTANTS Subject: Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report TR-55-93 be received; 2 . THAT Council provide direction with respect to Options "A" or "B" outlined in the body of this report. BACKGROUND AND COMMENT: 1.0 History 1. 1 As of November 1, 1989, the Town's Benefit Program for all health and dental coverage has been administered by Buffett Taylor and Associates . This includes dental, extended health, life, long term disability, and accidental death and dismemberment insurance plans . This firm has provided excellent service in this area over the past three (3) years . 1.2 Prior to Buffett Taylor and Associates, the Town's benefits were administered by the Protector's Group for many years. 2 .0 Purchasing By-Law 2 . 1 For the information of Council, under the Purchasing By-Law #82-96, the tendering policies and procedures do not apply to the procurement of consulting services. This is generally the case with all municipalities because of the specialized nature of most consulting services. 2 .2 Over the past year there have been enquiries received from Council Members, with respect to the procedure for submitting a proposal to the Town of Newcastle for the Administration and Consultation of the employee Benefits Program. 2 0 PAPIER E"�E ­ - 1 G IE-14 EI.YILID PAPE A Page - 2 - TR-55-93 PROPOSAL CALL: EMPLOYEE BENEFIT CONSULTANTS 2 .3 The benefit administrators normally take the Town's benefit package to the market every two (2) to three (3) years . If Council were to direct that the benefits package be subject to tender, it is recommended that the benefit administration role be separately tendered first and subsequently the successful candidate could go to market for the Town's entire package. If the Town were to open the process for bids on the entire benefits plus administration package for all companies to bid on, the process would not likely produce the best price for all packages for the following reasons: a) Not all companies provide all services, ie: Metropolitan Life might not provide other than long Term Disability Coverage and it would then be up to the Town's limited payroll staff to administer amongst all the different Providers. b) The Provider Companies will not be as receptive to submitting a realistic quote on a package when the same information is being requested from a number of different consultants. c) Having a Consultant bring the package to the marketplace only every two (2) to three (3) years will provide a competitive price for the Town. d) The Consultant can use their knowledge of the industry and the market to try to obtain the best overall benefits in each area and offer it to the employee through the Town as one package. 3. 0 Area Municipalities A survey of the area municipalities was conducted to compare the way in which these services are provided within the Region. However, in conducting the survey, staff were also interested in the number of payroll staff available to perform some part of the administration of these packages. Staff feel that the benefit administrators enhance the staff complement in municipalities where there is a restricted number of payroll staff. As a result, the smooth working relationship that develops in these situations should not be overlooked in terms of the efficiency added to the payroll process . I i i i Page - 3 - TR-55-93 PROPOSAL CALL: EMPLOYEE BENEFIT CONSULTANTS Municipality Total # of # Payroll Admin. of If outside Rating: Staff Staff Benefits administrated ♦ very good full part (excludes/ in/out by whom ♦ excellent time time personnel) ♦ poor Newcastle 176 127 2 payroll outside Buffett & excellent Taylor Associates Oshawa 709 240 3 payroll/ inside n/a n/a benefit clerks 1 supervisor Pickering 360 290 2 payroll inside n/a n/a 1 benefit Ajax 250 200 1 payroll outside Buffett & very good 1 benefit Taylor Associates Whitby 273 291 1 payroll outside Buffett & very good 1 benefit Taylor Associates Region of Durham 3100 3 payroll inside Buffett & very good total 1 benefit Taylor Associates (consulting as required) 4 . 0 Conclusion 4 . 1 As stated above because of the specific nature of the consulting services, a tender is not considered under these circumstances however, a request for proposals is a feasible alternative should Council wish to consider it at this time. 4 .2 In the past the Town's benefit package has always been administered by a Consultant, however a proposal process for the selection of the Consultant services has never been used. The reason is that there are not many companies who will provide the complete administration and consulting services for all of the benefit plans that the Town offers. 4 . 3 Consequently, staff respectfully request Council direction for the selection of an Employee Benefit Consultant and offer the following alternatives: OPTION "A" Issue a request for all interested companies to submit proposals for the Administration and Consultation of the Employee Benefits Program with said request being advertised in the local newspapers . For information purposes, the attached, marked Schedule "A" is a draft request for proposal document. I Page - 4 - TR-55-93 PROPOSAL CALL: EMPLOYEE BENEFIT CONSULTANTS The purpose of this proposal call will be to select a Benefit Consultant. The proposals will be short listed by Staff, and the final selections for consideration will be requested to make a presentation to Council. Once Council has made it's selection, the Consultant will then be able to bring the Town's entire benefit requirements to the market for quotations . OPTION "B" Continue with Buffett Taylor and Associates as the Town's consultant for the administration of the Employee Benefit Program and provide them with the necessary authorization to go to the marketplace to try to obtain the best overall pricing and benefits in each area. The proposal would be offered to the Town as one package. The renewal and administration of the process would continue to be conducted by staff through the Treasury/Payroll function. If in the future, there was concern with the level of service provided with this company, staff would bring it to the attention of Council. Respectfully submitted, Recommended for presentation } to the Committee, MdriI6 Marano, H.B.Sc . ,AMCT. , Lawrence E. Kot4 ff, Treasurer. Chief Administra ive Officer. MM/LAB/hjl Attachments I i SCHFDU�F "A" Re: Request for Proposal RFP93- , Employee Benefit Consultant You are invited to submit a proposal to review and assess the Town of Newcastle's current employee benefit plan and insurance coverage and to develop detailed specifications for a proposal call. All proposals must be submitted in a sealed envelope, clearly marked as to the contents, no later than 4:00 p.m. (local time) , to: Lou Ann Birkett Purchasing and Supply Agent Town of Newcastle 40 Temperance Street Bowmanville, Ontario L1C 3A6 All questions relative to the proposal call are to directed to Jackelyn Forsey, Payroll Clerk II or Marie Marano, Treasurer. The lowest or any proposal submitted will not necessarily be accepted. Yours truly, Lou Ann Birkett, AMCT(A) , Purchasing and Supply Agent. LAB/hjl Attachment j I THE CORPORATION OF THE TOWN OF NEWCASTLE PURCHASING OFFICE REQUEST FOR PROPOSAL RFP93- EMPLOYEE BENEFIT CONSULTANT Terms of Reference for Employees Benefit Consultants General: Proposals are invited from bona fide insurance and employee benefit consultants and/or brokers to review and assess the Town of Newcastle current employee benefit plans covering both Union and Non-union employees. The consultants are to develop detailed specifications for a proposal call, for employee benefit plans and insurance coverage. Also, to provide administrative needs (ie. billing, certification, third party administration, etc. ) , over a five (5) year period. Qualifications of Consultants: Proposals will only be considered if they are submitted by a bona fide employee benefit consultant. Proposals submitted by insurance companies or agents will not be considered. Your written submission to the Town of Newcastle should include the following information: 1. Name of company and location of head office. 2 . Details of ownership and principal officers . 3. Location of the office that will handle the consulting assignment. 4. Name and qualifications of the person who would be assigned to the project. 5. A list of not less than three (3) clients for whom similar consulting services have been provided within the last two (2) years . 6 . Indicate the proposed methodology to carry out the assignment. 7 . Indicate the estimated time in weeks to complete the assignment. 8 . A statement in your proposal indicating that you are an independent employee benefit consultant or insurance broker. - 1 - � 25 i THE CORPORATION OF THE TOWN OF NEWCASTLE PURCHASING OFFICE Fees: In your proposal, indicate an annual schedule of fees for. services to be rendered, as outlined in the terms of reference and based on the number of persons to be assigned and the estimated time for completion of all assignments . Provide a percentage of premium commission fee for such consulting services. Provide advice and recommendations on the method fee payment by the Town of Newcastle and in indicate the amount to be paid on a yearly basis commencing expiring It is understood that the contract will commence effective , with the first payment effective Further, confirm that the only compensation or fees for the consulting services to be provided will be that compensation or . fees paid for by the Town of Newcastle and that your firm will not either directly or indirectly receive or accept any other compensation from insurance companies or others for such services . General Terms of Reference: The Town of Newcastle requires the following work to be completed: 1. A review of the current benefit plans, identifying possible shortcomings and making recommendations. 2 . A review of the current cost structures and experience factors . 3 . The analysis should include recommendations on preferred underwriting practices, funding and suggestions for cost containment. 4 . Preparation of specifications to be submitted to the market for a competitive proposal call for plans commencing 5. The full analysis of all proposals with a written report detailing recommendations concerning the carrier, benefit design and funding methods. Short list to two or three proposals and arrange a meeting to determine best selection. 6 . Assist with the transition to a new carrier, if required, and to provide information and assistance on administration procedures . 2 - 26 THE CORPORATION OF THE TOWN OF NEWCASTLE PURCHASING OFFICE General Terms of Reference: (continued) 7 . Provide on-going administration services over a five (5) year period (ie. third party, billings, certification, etc . ) . The consultant will act as a liaison between the carrier and the Town to resolve issues as they arise. 8. Bidders are requested to include comments with their submission as follows: (a) Given the nature of the organization, please explain how plan design is important and when changes should be considered or made. (b) Please advise what insurance companies would be capable of handling our business and why. The answer should relate to the Town's operational structure. (c) Please comment on the clients you currently service that are of similar nature, size and complexity as the Town. Criteria for Award: The Town reserves the right to reject any or all proposals and to accept that proposal which the Town deems in its best interest. Bidders may be requested to present their proposal at a meeting of the Town of Newcastle's Council. Submission of Proposals: To be considered, all proposals must be submitted by 4:00 p.m. (local time) , Lou Ann Birkett Purchasing and Supply Agent Town of Newcastle 40 Temperance Street Bowmanville, Ontario L1C 3A6 I 3 - I I THE CORPORATION OF THE TOWN OF NEWCASTLE BENEFIT INFORMATION AS OF JULY 1, 1992 Number of employees covered by benefits: 191 Monthly Premium Cost as of July 1, 1992 Basic Life $ 2,997 .50 Basic Accidental Death and Dismemberment 477 .35 Dental Plan 9 ,309 .06 Extended Health Care 13,733.40 Long Term Disability 4 ,375. 61 Total Monthly Cost $30,892 .92 I i i I 4 -