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Item 10BCity of Southlake, Texas MEMORANDUM August 10, 2004 TO: Billy Campbell, City Manager FROM: Kevin Hugman, Director of Human Resources SUBJECT: Approval of a contract with Canada Life /Jefferson Pilot for employee Long term Disability (LTD) benefits Action Requested: City Council approval of a contract with Canada Life /Jefferson Pilot for employee long term disability, effective October 1, 2004 with guaranteed rates through September 30, 2005. Background Information: In May 2002, the City bid out the various employee insurance and benefits programs. These programs included medical, dental, group life insurance (including accidental death and dismemberment, life, and long -term disability) and section 125 plan. Canada Life was chosen as the low bid for long term disability benefits from twelve (12) bids received. A contract was approved by City Council in August 2002 for a 24 -month rate guarantee. Canada Life has completed its renewal analysis for the City and has offered a contract renewal for twelve (12) months with no rate increase. The City's premium is based on employee annual budgeted salary. During the past year, Canada Life was acquired by Jefferson Pilot Financial Insurance Company. Jefferson Pilot has over $32 billion in assets and a financial rating of A ++ (Superior) from A.M. Best Company. There has been no disruption of service and no reduction in benefits. Financial Considerations: The rate renewal offered by Canada Life /Jefferson Pilot is the same rate as the previous two years: $0.26 / $100 which results in an approximate monthly cost to the City of $2,310, or a total approximate annual cost of $27,720. The proposed LTD insurance benefit costs are within the amounts budgeted in the proposed FY 2004 -2005 Budget. Citizen Input/ Board Review: Not Applicable. Legal Review: Not Applicable. Alternatives: Input as desired by Council. Supporting Documents: None Billy Campbell, City Manager August 10, 2004 Page 2 Staff Recommendation: City Council approve renewal of a contract with Canada Life /Jefferson Pilot for employee long term disability benefits, effective October 1, 2004 with guaranteed rates through September 30, 2005.